Michigan lender sues competitor for raiding Florida offices

A Michigan lender is suing a competing mortgage firm for allegedly poaching over 30 employees over the past two years, causing it to close at least three of its Florida branches.

Success Mortgage Partners accuses Stockton Mortgage Corp. of unlawful solicitation and theft of trade secrets from its operations in Georgia, Michigan and Florida, according to the complaint filed last week. A summons was issued Monday to the Frankfort, Kentucky-based Stockton for the case in the U.S. District Court for the Eastern District of Michigan.

“Most recently, Success Mortgage lost three of its top-producing Florida employees, along with their support teams, who resigned en masse within days of each other in what was clearly a coordinated plan,” wrote attorney Robert Kinggo III of Farmington Hills, Michigan-based Trott Law, on behalf of Success.

Kinggo and Success didn’t respond to requests to comment this week. Stockton, in a statement shared by General Counsel Erin Brady this week, said it was aware of the filing. 

“Stockton has been growing and expanding its footprint in many states, and we were disappointed to see that legitimate business competition has been mischaracterized as an unlawful attack on Success Mortgage Partners’ business,” the statement said. “Stockton recruits talent from all over the country and has never targeted a particular employer, nor would it ever have a desire to do so.”

The poaching suit is the latest such case between competitors during a year of upheaval for mortgage professionals, and many of the complaints remain pending in federal courts. 

Stockton’s poaching scheme began around late 2020 to early 2021, according to the suit, when the firm induced a Georgia-based Success branch manager to divert his team and business to the company. Success said it pursued a settlement with the branch manager to resolve what it then considered a “routine employment dispute” in March 2021, although its resolution was undisclosed.

The Kentucky-based competitor began targeting Success workers in January 2021, the complaint claims, including hiring former Plymouth, Michigan staffer Eugene Antonelli as a recruiter. Antonelli attempted to recruit three Success workers in Michigan and Florida but was unsuccessful, the suit said.

Beginning in February 2022, David Stockton allegedly attempted to recruit four Success employees, including offering a $600,000 bonus to a Florida-based loan officer who declined the offer. Success’ lawsuit identifies David Stockton as an employee, although he’s listed by Stockton as the company president, owner and founder of the company in 2001.

The lawsuit alleges David Stockton later contacted separate teams of Success loan producers in Bradenton, Florida and Lakeland, Florida offices, and that a combined 11 Success Mortgage employees subsequently left the firm in August. The departed Florida workers sent trade secrets including loan information and customer leads from their Success work email to both their future employer and their own personal email addresses, the complaint said.

“By August 10, 2022, Team Roshel members were permitting Stockton to ship Stockton equipment across state lines for storage in Success Mortgage offices at the Lakeland Branch in anticipation of converting those offices to Stockton offices,” wrote Kinggo, referring to a since-departed Florida loan officer.

The lawsuit didn’t identify the specific number of employees Stockton allegedly raided. Success is seeking unspecified damages and said it would seek in discovery a forensic audit of the Florida employees’ use of personal email accounts to transfer trade secrets. 

Michigan-based Success was founded in 2002, is licensed in 36 states, and counts 367 employees on LinkedIn. It offers conventional, government-insured, jumbo and reverse mortgages. 

Stockton, licensed in 25 states, has 267 employees by a count on LinkedIn. It specializes in rural home lending in addition to offering conventional, government-insured and jumbo loans. About 4% of its 2021 mortgage loan applications, or 582, were in Michigan, according to the lawsuit, which doesn’t cite the source of loan information.