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Guild vs. CrossCountry Lawsuit Comes To Standstill

Katie Jensen
Dec 16, 2022
dismiss

Magistrate judge recommends CrossCountry file a motion to dismiss.

KEY TAKEAWAYS
  • Guild alleged that CrossCountry conspired with three Guild employees to poach the entire Kirkland, Wash., branch.
  • Guild also claimed these employees conspired to divert loans in process at Guild to be closed at CrossCountry instead.
  • CrossCountry may be able to dismiss this action on the grounds that it and Guild share California citizenship.
  • Guild has yet to respond whether it will refile a complaint in California. 

The lawsuit between Guild Mortgage and CrossCountry Mortgage that involved some messy pranks between employees, may soon come to a close. The magistrate judge for the Western District of Washington at Seattle recommended that CrossCountry file a motion to dismiss, but it must be signed off by a judge before the case is officially thrown out.

In October 2021, Guild alleged that CrossCountry conspired with three Guild employees to persuade other Guild employees to “misappropriate nearly all of Guild’s Kirkland, Washington branch, including dozens of employees [and] massive amounts of confidential business and client information.” In the complaint, Guild also claimed these employees conspired to divert loans in process at Guild to be closed at CrossCountry instead.

CrossCountry may be able to get the lawsuit dismissed on the grounds that both it and Guild share California citizenship, so diversity of citizenship is incomplete and thus the Seattle court lacks subject matter jurisdiction. Guild does not oppose dismissal, but seeks recovery of attorney’s fees based on CrossCountry’s failure to uncover its California citizenship until 10 months into the litigation.

The court granted in part CrossCountry's motion to seal and recommends that its motion to dismiss be granted, and denied Guild's motion for sanctions. 

The court also ordered CrossCountry to provide a complete list of its states of citizenship or pay $25,000 in sanctions within 30 days of the date the court’s report and recommendation are adopted.

Guild has yet to respond as to whether it will refile a complaint in California.

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