Movement Mortgage is suing Summit Funding founder and CEO Todd Scrima for corporate espionage, sharing alleged evidence of the leader encouraging the scheme.
The suit filed Tuesday seeks as much as $40 million in damages, and includes screenshots of text messages and emails that purport to show Scrima's attempts to facilitate and obfuscate the theft of Movement's proprietary information. It follows a
"This is about as serious as I've ever seen," said Ari Karen, partner at Mitchell Sandler, on behalf of Movement regarding the scheme. "(Scrima) was not only directly involved in it, he was encouraging, facilitating, it was his idea."
The new complaint was filed in a California federal court, where Summit is headquartered in Sacramento. It was filed separately from Movement's earlier North Carolina poaching lawsuit because of Scrima's location, Karen said.
Scrima did not respond to a request to comment Wednesday.
In one June text message to Summit's former chief growth officer Brian Mitchell, Scrima asks if he received data on Movement's
"Not on our servers," wrote Scrima, according to the screenshot. "Can u maybe set up misc whatsapp account and have them texted there?"
The CEO followed up by suggesting WhatsApp is admissible in court.
The former recruiting executive, Deran Pennington, signed an agreement with Scrima in March that included a signing bonus upwards of $2 million, the suit claims. Despite the agreement, Pennington continued to work with Movement for four months. During that time, Pennington solicited others to leave the company and take confidential information with them.
The new lawsuit names nine total ex-Movement employees-turned Summit workers who allegedly participated in the plot. Linda Plymale, an assistant to one of the departing managers, resigned in July and at the same time downloaded numerous documents about Movement's business from its servers.
The information gathered includes internal workflows, protocols for underwriting and a plethora of loan officer statistics, the lawsuit claims.
"This did not merely provide Scrima with a recipe in a cookbook, he got a copy of the entire cookbook, the details of every food supplier, the details of every piece of equipment in the kitchen as well as the resume, reviews and experience information for every single cook and every dish the cooks ever prepared," the lawsuit said.
Other attached exhibits claim to show Scrima in messages discussing with colleagues how to model Summit's business off of Movement's information. Loan officers on their way out of Movement also diverted loans to the competitor, coordinating with a specifically hired employee to transfer information, the plaintiffs said.
The Summit CEO was admonished by his own in-house counsel for not avoiding illegal activities, according to Mitchell who relayed his concerns to both supervisors and Movement staff. Summit also denied wrongdoing when confronted with Movement attorneys' reports of Pennington's alleged wrongdoing.
Mitchell, who did not participate in the initial scheme, was fired in November 10 days after sharing more concern with supervisors, the lawsuit alleges. Karen, the attorney for Movement, said it's probable although uncertain if Summit is still using the competitor's business and customer information.
"Because it's now in people's minds, they understand the models, they've done certain things with it," he said. "Once it's done, it's hard to reverse."
Movement employs over 4,500 workers across 775 locations in the U.S. and has originated over $13 billion in mortgage volume through the third quarter, according to data from S&P Global. Summit, which employs over 200 loan officers, originated $1.4 billion over the same period.
The South Carolina-based Movement is itself also
