In a legal battle that's intensifying in North Carolina, Deran Pennington, a former top sales executive at Movement Mortgage, filed a counterclaim seeking approximately $13 million from the lender. He alleges that Movement breached his contract by failing to pay his due compensation.
The allegations come after Movement Mortgage sued Summit Funding, where Pennington now works, for allegedly poaching its employees and taking confidential data with them while still employed by Movement Mortgage.
In July 2023, Pennington and two other top sales executives, Matt Schoolfield and Chris Shelton, left Movement Mortgage to join Summit Funding, leading to a legal dispute.
Movement Mortgage initiated a lawsuit against its former executives and Summit Funding in October, alleging misappropriation of trade secrets, data theft, and improper solicitation, among other claims. Later, the company filed another lawsuit against Todd Scrima, Summit's founder, alleging corporate espionage.
Pennington, who had been with Movement from 2008 to 2023, responded to the lawsuit in North Carolina by denying most of Movement's allegations. He was the company's eighth employee.
According to Pennington's counterclaim, Movement named him co-national sales director in 2020, offering a $250,000 salary and uncapped commissions equal to 2% of net profits for all sales, paid two months in arrears.
However, Casey Crawford, Movement's CEO, reportedly informed Pennington late in 2020 that his compensation would be capped because he was "on track to make over $7 million, and that is way too much money."
Pennington claims he fulfilled his duties for the entirety of 2020, generating over $390 million in net profit for Movement. He alleges that Movement underpaid him by at least $3,267,544.86, with the first missed payment occurring around Nov. 1, 2020.
Pennington's counterclaim seeks to recover unpaid wages of $3.27 million, liquidated damages for breach of contract, and $9.8 million for South Carolina Payment of Wages Act violations. He also demands a jury trial.
Ari Karen, Movement's attorney, said Thursday that the claims are "without merit."
He found it odd that "someone with their hand in the cookie jar" would even make those statements to a court. Karen said he was referring to the confidential documents he says Pennington took to diminish Movement's advantage in some markets.
Pennington admits in court documents that he signed a confidentiality agreement with Summit while still working for Movement. But he denied recruiting other sales executives during that time or creating dissension among his colleagues. According to the counterclaim, he also denies using any of Movement's confidential information.
Pennington denies most of Movement's allegations, including solicitation efforts and conspiracies. Around 50 employees reportedly left Movement to join Summit during this period.
“Pennington admits only that he did solicit certain Movement employees as stated in his Answers to Interrogatories,” the counterclaim states.
Movement is seeking $75,000 in damages from Pennington in its amended lawsuit against Summit, Pennington, and a handful of other loan officers.
"Summit engaged in a coordinated scheme to solicit large portions of Movement's business, first by targeting key employees and obtaining access to trade secrets and confidential and proprietary information, then by using that material to target additional high-earning employees of Movement's, who they then used to mislead and divert customers from closing loans at Movement to unwittingly do so at Summit," the complaint states.
