Two of the industry’s biggest lenders continue to duke it out in federal court, earning separate victories in a poaching complaint built on bad blood.
A judge last week ruled CrossCountry Mortgage can move forward with false advertising counterclaims against Loandepot, the latest turn in the competitors’ legal battles. The Ohio company accuses Loandepot of sending marketing emails in 2022 to potential customers from the email addresses of its former workers who switched firms.
“If CCM is unable to prove these allegations with evidence after discovery, loanDepot can renew its arguments at summary judgment,” wrote U.S. District Judge Arun Subramanian in a Dec. 29 order.
Case filings don’t indicate how many customers may have been deceived, nor how much loan production CrossCountry may have lost out on. Spokespersons for both companies declined to comment, while opposing attorneys didn’t respond to requests for comment.
The counterclaims arose from Loandepot’s July 2022 lawsuit accusing CCM of poaching New York-area workers and stealing confidential company and customer data.
The court has so far ruled largely in favor of Loandepot, barring CCM and individual employees from using the allegedly stolen information. A federal judge last summer suggested Loandepot was likely to succeed on its theft of trade secrets claims; an Illinois magistrate issued a similar ruling in late 2022 in a pending case there.
Judge Subramanian in November also compelled individual defendants, ex-Loandepot workers turned CrossCountry employees, to settle their counterclaims in arbitration. The New York court however has not barred CrossCountry from soliciting Loandepot’s employees.
The poaching cases are just a few of the raiding complaints lodged against the Cleveland-based CrossCountry, although Loandepot’s lawsuits are particularly vitriolic. The California firm has filed four similar lawsuits against CCM since 2018; CrossCountry suggests the more recent claims are retaliation over its spurning of Loandepot’s alleged 2021 merger proposal.
The companies had at least one unsuccessful mediation attempt last September, according to Illinois court records. A forensic review in that lawsuit has combed through over 100,000 documents, and CCM according to filings is set to return approximately 8,000 Loandepot records within its systems.
CrossCountry meanwhile has fought off racketeering accusations from another lender and survived raiding complaints from Caliber Home Loans and Guild Mortgage.
The private lending giant last week also quietly settled a trademark dispute with Impac Mortgage. CCM sued Impac in August 2022 over its CashCall Mortgage business’ use of the CCM mark. The settlement was confidential, and an attorney for Impac declined to comment Wednesday.
