Facts

In April 2014, a mortgage loan officer named Benjamin Anderson, while working at Irvine-based mortgage bank Mount Olympus Mortgage Co., signed an employment agreement with Guaranteed Rate Inc., a competing mortgage bank based in Chicago. Subsequently, while still ostensibly working for Mount Olympus, Anderson and several other Mount Olympus employees worked with Guaranteed Rate to transfer large volumes of Mount Olympus' data, including mortgage loan application files, and personal financial information, to Guaranteed Rate, which Guaranteed Rate then used to close loans.

PLAINTIFF'S CONTENTIONS:
Defendants did not have Mount Olympus' or the consumers' consent to transfer data from Mount Olympus' computer systems to Guaranteed Rate. Upon discovery of the data theft, Mount Olympus immediately sent cease-and-desist letters to the defendants, which were ignored, prompting Mount Olympus to report the illegal conduct to the California Attorney General and Orange County law enforcement investigators, and to initiate civil litigation. Mount Olympus filed claims for breach of contract, breach of fiduciary duty and fraud, and violations of California Penal Code Section 502(c), which covers the unlawful theft of computer data, as well as conversion and misappropriation of the confidential loan files.

DEFENDANTS' CONTENTIONS:
Defendants denied the allegations.

Result

The jury found Guaranteed Rate and Anderson jointly and severally liable for $5,607,000 in lost profits and for $4,612,000 in lost business value. The jury also found that Guaranteed Rate acquired $657,000 in ill-gotten gains and that Anderson acquired $1,960,000 in ill-gotten gains. In addition, the jury found that Guaranteed Rate and Anderson engaged in the conduct with malice, oppression, or fraud, so as to warrant punitive damages. After a one-day punitive damages trial, the jury awarded $12,500,000 in punitive damages against Guaranteed Rate and $500,000 in punitive damages against Anderson.

Other Information

Currently awaiting decision are Mount Olympus Mortgage Co.'s motion for $3.3 million in prevailing party attorney fees pursuant to Penal Code Section 502, and a motion pursuant to California Unfair Competition law seeking additional equitable remedies including disgorgement of ill-gotten gains and an injunction barring further use of stolen data. FILING DATE: June 19, 2014.

Length

eight weeks