CrossCountry CEO may testify under oath in poaching suit

CrossCountry leader Ronald Leonhardt could testify under oath in his firm's long-running poaching battle with Loandepot. 

A federal judge Tuesday granted Loandepot's request to depose the competitor's founder and CEO in an attempt to determine his role in a recruiting trip for employees. The 2022 lawsuit stems from CrossCountry's alleged raiding of over two dozen Loandepot employees responsible for much of the California firm's New York-area production.

Already at least a dozen witnesses have been deposed, and defendants have produced nearly 9,000 documents of text messages and emails. Given Leonhardt's alleged role in the poaching, a federal court "Apex Doctrine" giving senior corporate executives an extra layer of protection from depositions didn't apply, U.S. Magistrate Judge Sarah L. Cave wrote. 

"Questions remain regarding the extent of his role, he is in the best position to answer those questions, and CC has not identified an alternative source from which LD can obtain the information," wrote Cave, referring to the lenders by their acronyms. 

The judge limited any deposition of Leonhardt to two hours, and limited the scope to questions about the recruitment of individuals and the purported trip. A deposition date was not specified. Both lenders and an attorney for Loandepot declined to comment Thursday. 

Employees who jumped from Loandepot to CrossCountry testified that they flew to Ohio, CCM's home base, on Leonhardt's plane for a recruiting trip on an unspecified date, according to court records. Witnesses offered conflicting testimony on the CEO's involvement in the recruiting pitch, whether he only attended a dinner or spoke with the group. 

Tuesday's filing also references sealed documents in which witnesses dispute whether Leonhardt approved signing bonuses, or simply "rubber-stamped" them. 

Cave meanwhile granted Loandepot's request for CrossCountry to search the personal email accounts and text messages of other employees in its bid to uncover the details of the poaching scheme.

CrossCountry is also countersuing Loandepot, alleging the rival sent marketing emails to customers from the email addresses of employees who had since moved to CrossCountry. 

The sides must meet and file a joint letter to discuss any remaining depositions in the case, Cave wrote. The lawsuit is one of two poaching battles between the competitors: employees in an Illinois case are scheduled for an arbitration hearing with Loandepot in June. 

While raiding accusations between mortgage lenders have subsided in recent months, a few stinging lawsuits persist. A federal judge in North Carolina in January ruled Summit Funding violated the terms of an injunction by continuing to recruit Movement Mortgage workers in a case that remains ongoing.