Waterstone poached over 60 Mutual of Omaha staff, suit claims
Mutual of Omaha Mortgage claims Waterstone Mortgage poached over 60 of its employees, causing the lender to shutter three of its East Coach branches, according to a new suit.
The lawsuit accuses the Pewaukee, Wisconsin-based Waterstone of misappropriation of trade secrets and unjust enrichment, among other counts in the complaint filed Friday in the U.S. District Court Middle District of Florida. It’s the latest legal battle between lenders over talent, and the information they take with them, at a time when originations are forecasted to shrink and the industry is laying off thousands.
Departed staff diverted prospective borrowers and shared with Waterstone a plethora of confidential branch financial information, the San Diego-based lending arm of the Nebraska insurer said.
“Unless Mutual Mortgage is made whole through damages attributable to business and good will lost, Waterstone’s conduct has and will continue to cause Mutual Mortgage harm,” wrote attorney John Schifino of Washington, D.C.-based Mitchell Sandler LLC, on behalf of Waterstone.
The lawsuit didn’t specify the exact number of staff members involved, or when Mutual of Omaha’s Daytona, Florida, Tampa and Paramus, New Jersey branches shuttered. The complaint also only specified damages exceeding $75K.
A representative for Mutual of Omaha declined to comment on pending litigation, while Schifino and Waterstone didn’t respond to requests for comment.
Mutual of Omaha employees sent information regarding prospective borrowers to their personal email accounts, the lender claims, and also conferred with Waterstone executives about their impending departures. Former worker Michael Irish in April emailed Waterstone Vice President of Mortgage Lending Chris Wolf about preserving his pipeline, according to the suit.
“I would hate to have my pipeline pop off within the next 30 days and then be out of my commissions if that in fact would be the case,” said Irish in an alleged email to Wolf.
In February, then-Mutual of Omaha Daytona Branch Manager Dwayne Hutto allegedly sent confidential information to Waterstone’s Dustin Owen, a regional vice president of the Southwest, including profit and loss statements, worker compensation and other data. Owen allegedly replied he’d sent the information to Waterstone Senior Vice President of Sales Kevin Allen.
Mutual of Omaha said it will pursue expedited discovery of departed employees’ personal email accounts to uncover evidence of destroying evidence. A summons has not yet been sent to Waterstone.
Waterstone, a subsidiary of Waterstone Financial, is facing common industry woes with declining origination volume but recorded a slight increase in mortgage banking net income in the second quarter.
Lenders have taken numerous poaching allegations to federal court this year, accusing competitors of incentivizing their staff members to switch over and take with them both trade secrets and prospective borrowers.
Brecksville, Ohio-based lender CrossCountry Mortgage has been accused of poaching in nine lawsuits from eight different firms, most recently by loanDepot. CrossCountry has fired back at one of its accusers, alleging San Diego-based lender Guild Mortgage itself enticed its workers to divert loans before departing.