A federal district court judge in Seattle will allow Caliber Home Loans to continue with its poaching lawsuit against CrossCountry Mortgage (CCM), rejecting CCM’s motion seeking to dismiss all seven counts brought against it.
Judge Richard A. Jones of the U.S. District Court for the Western District of Washington in Seattle issued a ruling March 30 on CCM’s motion, denying the company’s request to dismiss five counts while agreeing to dismiss two others.
In the lawsuit, filed in May 2022, Caliber Home Loans accuses CCM of raiding 80 employees from 18 branches in six states who were responsible for more than $2.3 billion in annual loan originations.
The suit claims that CrossCountry also misappropriated trade secrets and diverted thousands of mortgage loan customers from Caliber. It cites emails in which it alleges that CCM recruited and hired Mark Everts, a branch sales manager in Seattle, and that Everts agreed to bring other team members with him.
In a Dec. 3, 2021, email exchange that included as an exhibit in the lawsuit, Everts used both his Caliber and person emails to negotiate with CCM Executive Vice President Scott Forman.
On Dec. 16, Forman forwarded an offer it claims is signed by CrossCountry President Ron Leonhardt. The offer included a sign-on bonus of $1 million and an additional $500,000 bonus if Everts produced $6 million in loans over a two-month period.
The lawsuit, which seeks more than $5 million in damages, also details employees from other branches in Oregon, Texas, Florida, Tennessee, and California who left Caliber to work for CrossCountry.
In his ruling on the motion to dismiss the case, Jones agreed to dismiss the first count, which accuses CCM of unfair competition, stating that Caliber had failed to establish all of the elements necessary for the claim.
The judge also dismissed a claim of tortious interference with advantageous business relationships, again stating that Caliber had failed to establish all of the elements necessary for that claim.
In dismissing both counts, Jones did state that Caliber could refile amended complaints for each charge..
While he dismissed those two counts, Jones denied Caliber’s request to dismiss five others, including misappropriation of trade secrets; conversion of confidential & proprietary information; tortious interference with a contract; tortious inducement to breach fiduciary duty of loyalty; and civil conspiracy.
Among the claims made by Caliber, the lawsuit alleges that employees who left to join CCM sent emails from their Caliber email accounts to their personal accounts containing customer information, loan and mortgage information, scripts, and other documents.
At the time the lawsuit was filed, a CCM spokeswoman told NMP that the company doesn't comment on legal matters. Caliber said in the lawsuit it sent a demand letter to Everts and CrossCountry accusing Everts of violating terms policies confidentiality and trade secrets, and that CrossCountry denied any wrongdoing.
CrossCountry also denied that Everts diverted customers or that he recruited any former Caliber employees.
