CrossCountry Mortgage fires back in Guild, loanDepot suits

CrossCountry Mortgage continues to defend itself in numerous poaching lawsuits, filing responses to complaints from Guild Mortgage and loanDepot over the past two weeks.

The Brecksville, Ohio-based lender is fighting a six-figure penalty requested by Guild to cover part of over $2 million in legal fees incurred in a now yearlong suit. Guild accuses CrossCountry of raiding its Seattle-area branch with over two dozen employees last year and is asking a federal judge in Washington to sanction CrossCountry for its alleged stalling tactics in the case.

Since the suit was filed last October, CrossCountry argued questions of jurisdiction, which counsel for Guild said was a form of "forum shopping," or an attempt to find a more favorable venue for the defendant. Attorneys for Guild Wednesday filed a request for CrossCountry to pay a $633,000 penalty.

In a trio of filings last week, CrossCountry argued against the sanctions, suggesting its lengthy jurisdiction arguments were innocent efforts to defend itself.

"The overwhelming evidence is that CrossCountry proceeded to litigate this case with the good-faith belief that diversity existed," wrote counsel on behalf of CrossCountry.

The sides are set to appear in a virtual oral argument Oct. 27, and a jury trial in the case is scheduled for next February. CrossCountry earlier this year also sued Guild for allegedly hiring away a Nevada branch manager who diverted loans, but the sides agreed to dismiss the case in July.

A spokesperson for Guild declined to comment, and a representative for CrossCountry and attorneys in the case didn't respond to requests for comment Wednesday.

The developments are the latest chapter in the saga of poaching complaints against CrossCountry in recent years. The firm last week also laid stinging criticisms on megalender loanDepot in a countersuit to a poaching suit it filed in July in the U.S. District Court for the Southern District of New York. 

LoanDepot accuses 32 of its former employees of bolting to CrossCountry since February with thousands of confidential documents, and is suing for counts including unfair competition. Counsel for CrossCountry last week alleged loanDepot's lawsuit was filed to chill competition in the labor market, and to seek retribution for CrossCountry's spurning loanDepot's merger proposal in March 2021. 

"Its goal is … to distract from the fact that, after years of misconduct, fostering a toxic work environment, and misrepresenting itself to its investors, loanDepot's chickens are coming home to roost," wrote attorneys for CrossCountry. 

The countersuit is similar to a filing CrossCountry made against loanDepot this summer, in response to loanDepot's other poaching complaint in an Illinois federal court. CrossCountry in that case was hit with a temporary restraining order by a federal judge in April, preventing it from contacting customers whose information was included in loanDepot files allegedly brought over by employees changing firms. 

LoanDepot, through a representative Wednesday, said it wouldn't comment beyond the lawsuits.

CrossCountry is seeking to amend the restraining order and is also seeking discovery of loanDepot information around its handling of its own customer contact information. A federal judge approved an agreement between the lenders to extend the discovery and temporary restraining order in that case to Dec. 15.