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Judge Dismisses Guild Lawsuit Accusing CrossCountry Of Poaching

May 23, 2023
Lawsuit gavel

Case was dismissed without prejudice in Seattle but could be refiled in California.

A federal district court judge in Seattle dismissed a lawsuit filed by Guild Mortgage Co. LLC that accused CrossCountry Mortgage LLC of poaching an entire branch office in Kirkland, Wash.

Judge John C. Coughenour dismissed the lawsuit without prejudice, which means Guild could refile an amended complaint if it chooses. His order was signed on Feb. 9.

The dismissal follows a report and recommendations submitted to the court in December by U.S. Magistrate Judge Michelle L. Peterson, who recommended the court grant CrossCountry Mortgage’s motion to dismiss the case, deny Guild’s motion for sanctions, and order CrossCountry to disclose “the states in which it has citizenship or else by sanctioned $25,000.” 

While neither Guild nor CrossCountry objected to the dismissal, both objected in part to the recommendations, with Guild arguing that the court improperly denied its motion for sanctions, while CrossCountry argued that it is improperly being required to disclose the states in which it has citizenship. The court overruled both objections.

The lawsuit was originally filed in October 2021, with Guild alleging 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 the employees conspired to divert loans in process at Guild to be closed at CrossCountry instead.

CrossCountry was able to get the lawsuit dismissed on the grounds that both it and Guild share California citizenship, and thus the Seattle court lacks jurisdiction. Guild did not oppose dismissal, but sought to recover its attorney’s fees based on CrossCountry’s failure to reveal its California citizenship until 10 months into the litigation.

Following the ruling, CrossCountry had 30 days to submit its citizenship information. According to court documents, CrossCountry submitted a corporate disclosure statement on Feb. 23.

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

About the author
David Krechevsky was an editor at NMP.
May 23, 2023
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