Motto Mortgage, a national mortgage brokerage franchisor, is accusing UMortgage of “unlawfully soliciting” and “inducing” a top-performing Cincinnati, Ohio-based Motto franchise to jump ship, resulting in a breach of contract. The litigation also accuses UMortgage of soliciting other Motto franchises to do the same.
According to the lawsuit, Motto Mortgage Apex, a Motto franchise operated by Breon Price, Leo Grote, Leah Grote and Keyan Change, unexpectedly announced they would be terminating their contract in December. The brokerage’s contract, which stipulates that members cannot “operate, manage, own, or have any ownership interest in any mortgage company,” was in effect from Dec. 1, 2018 to Dec. 1, 2025.
The Denver, Colorado-based company claims that Anthony Casa, CEO of UMortgage, was fully aware that bringing this team over to his shop would result in a violation of said contract.
After Price’s group made the decision to transition to UMortgage, they had to pay a $172,800 fine, which was ultimately covered by Casa. Motto highlights this as proof that Casa was aware of the brokerage agreement.
“Motto is pursuing legal action against UMortgage for tortious interference after the company intentionally sought to impede on Motto Mortgage franchisee contracts,” a spokeswoman from Motto wrote in an email. “Motto Mortgage will not allow a competitor to misrepresent the nature of their business acquisitions and induce Motto Mortgage franchisees to violate/terminate their franchise contracts.”
In mid-December, Casa voiced excitement that Price’s team joined UMortgage on his LinkedIn page.
“Breon is one of the top producing loan originators in the state of Ohio and his brokerage is the number one mortgage brokerage in the state. We are looking forward to bringing the best platform for loan originators to this great market and continue to grow into a shrinking market,” Casa’s post said.
This announcement has resulted in “reputational damages … by implying that Motto as a whole was acquired or that franchisees are, without inducement, choosing to leave Motto and work for UMortgage,” the lawsuit claims.
Additionally, Motto claims that UMortgage “has attempted to solicit and induce other franchisees.” Specifically, the lawsuit alleges that Casa tried to convince a franchise in Atlanta, Georgia to join his shop.
Due to UMortgage’s interference, the national brokerage franchise alleges to have suffered from a loss of capital, valuable business, profits and goodwill. For this reason, the company will be seeking “an amount to be determined at trial,” the lawsuit filed last Wednesday said.
In response, Casa said the lawsuit came from “the same playbook commonly used by companies after losing one of their highest performing loan originators.”
“They file a lawsuit as an intimidation tactic to send a message to their other current loan originators that if you leave, they’ll take legal action; they do this with the intention that this will prevent other top performing loan originators from leaving their company,” Casa said in a written statement.
Source: nationalmortgagenews.com