A massive judgment has been awarded by a jury in a lawsuit accusing a title insurance company affiliated with Quicken Loans Inc. of misappropriating valuation technology.
Detroit-based Amrock Inc., which recently re-branded from Title Source Inc., says it
is the exclusive title company within the Quicken family of companies.
Amrock claims to be
“the largest independent provider of title insurance, property valuations and settlement services nationwide,” according to its website.
Late Wednesday, an announcement from HouseCanary Inc. indicated that a jury in a lawsuit file by Title Source in 2016 against HouseCanary has awarded it $706 million.
In a counter claim, HouseCanary alleges Amrock
misappropriated trade secret and breached its contract. At issue are HouseCanary’s technology for valuation, appraisal and real estate analytics.
Amrock is accused of plotting to replicate intellectual property, formulas, algorithms, models, analytics, products and proprietary data. It gained access to the technology by allegedly pretending to strike a licensing and business partnership started in January 2015.
Amrock was given a no-cost 120-day period to evaluate the proprietary appraisal software after which it would pay $20 to $30 from each appraisal generated through the software, according to court documents.
In April 2015, Amrock allegedly proposed an expanded arrangement. HouseCanary says it responded with a proposed $10 million annual contract price.
Amrock reportedly responded with a proposal for a $5 million annual cost that would give it access to a limited set of products and data for its internal use — but not for Quicken to use. With this agreement, HouseCanary would allegedly have access to Amrock’s historical appraisal data.
HouseCanary agreed to the $5 million proposal.
Between 3,500 and 5,000 reports were allegedly downloaded by Amrock until the lawsuit was filed.
But the lawsuit alleges that even though the services agreed to were reduced under the lesser $5 million deal, Amrock went well beyond the services outlined in the contract.
HouseCanary said that Amrock began asking for additional data that were unrelated to the services agreed to in the contract as it developed its own competing software.
Amrock “was attempting to reverse engineer, recreate, and mimic HouseCanary’s software, models (including HouseCanary’s AVM, similarity score model and complexity score model), analytics, value reports, and algorithms — using HouseCanary’s software, data, modeling techniques, data formats, reports and forms in violation of the plain language of the software license and nondisclosure agreements between the parties,” the counter claim states.
In addition, Amrock allegedly failed to provide the historical appraisal data to HouseCanary.
The conflict came to a head in April 2016 when Amrock sent HouseCanary a letter disputing two monthly invoices. By the end of that month, the agreement was terminated and Amrock filed its lawsuit.
HouseCanary claims that Amrock and Quicken face other lawsuits with other third parties over similar allegations.
On Wednesday, the jury reached a verdict.
“At the conclusion of the six-week trial, a 12-person jury found unanimously in favor of HouseCanary, awarding HouseCanary $706.2 million against Title Source, an affiliate of Quicken Loans, now known as Amrock, Inc, on counterclaims in this high-stakes legal battle,”
the statement said.
In a written statement to Mortgage Daily, Amrock Chief Executive Officer Jeff Eisenshtadt called the verdict “a travesty of justice.”
“The facts in this case are clear — HouseCanary made several unkept promises to Amrock leading to a contract dispute,” Eisenshtadt said. “However, when we asked the court to intervene, a local attorney and professional predatory plaintiff law firm spun a distorted and twisted narrative leading a San Antonio jury to an unconscionable result.”
Eisenshtadt said his company will appeal the decision “and explore all avenues to ensure justice and sanity are applied to the facts of this case.”