loanDepot notches partial win in scrap with CrossCountry

loanDepot registered a partial win towards CrossCountry in a commerce secret and employment-separation dispute. 

The California-based mortgage lender sued its rival in April 2022 claiming that six former workers — Steve Schneider, Cindy Smolin, Samantha Siegel, Fernanda Baske, Bob Bowman, and John Noyes — left the corporate to affix CrossCountry after accessing, downloading and taking confidential shopper data and breaching their employments agreements and fiduciary duties. 

The court docket shortly imposed a brief restraining order to the case, which prohibited the previous workers from utilizing paperwork and mandated the return of the filings containing buyer data that loanDepot claims they improperly took to CrossCountry. The order additionally prevented the previous workers from inducing present loanDepot’s workers to terminate their employment on the firm to affix CrossCountry. 

After a number of extensions, the order expired on December 15. Nonetheless, on Tuesday, Choose Edmond Chang, from the US District Courtroom for the Northern District of Illinois, granted loanDepot a preliminary injunction, sustaining the safety of the paperwork and poaching practices. 

A consultant for CrossCountry informed HousingWire, “As a matter of apply, we don’t touch upon authorized issues.” 

loanDepot president and CEO, Frank Martell, mentioned in a press release that the corporate was “extraordinarily happy” with the ruling and famous that “loanDepot will proceed to vigorously defend its pursuits.”

loanDepot celebrated that the court docket’s ruling underscores the chance of success of the declare. 

“Given the document proof at this stage, loanDepot is probably going to reach displaying that the Defendants misappropriated commerce secrets and techniques,” decide Chang wrote. “Lastly, CrossCountry is prone to be discovered chargeable for aiding and abetting the Particular person Defendants’ contractual and fiduciary violations, in addition to being accountable for tortious interference with contract.” 

Nonetheless, the decide denied a loanDepot’s request to incorporate within the restraining order a nationwide ban prohibiting CrossCountry from engaging, encouraging or rewarding any present or former worker of loanDepot to violate their contractual or fiduciary obligations.

“Briefly, loanDepot’s proposed nationwide no-solicitation bar is improper as obscure, overboard, and indifferent from the localized claims made on this case,” the decide wrote.

CrossCountry and loanDepot have engaged in a number of skirmishes over recruiting throughout the nation. 

After an origination group departed loanDepot in April 2021, the lender slammed the seven ex-employees and their new employer, CrossCountry, with a lawsuit alleging they “hatched and applied a scheme to loot loanDepot’s enterprise.” In July 2022, loanDepot sued the rival once more for allegedly poaching high-performing mortgage officers from its New York branches. 

Guild Mortgage and Caliber Dwelling Loans have each sued CrossCountry on comparable grounds. Caliber, now part of New Rez, mentioned CrossCountry had snagged 80 top-producing LOs who collectively originated $2.3 billion in enterprise. In October 2021, Guild Mortgage sued CrossCountry for allegedly partaking in comparable practices.

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