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Tort/Negligence – Trade Secrets – Contract Interference – Labor & Employment – Mortgage Broker

360 Mortgage Group, LLC v. Stonegate Mortgage Corp. (Lawyers Weekly No. 002-020-16, 20 pp.) (James Fox, S.J.) 5:14-cv-00310; E.D.N.C.

Holding: Although plaintiff has shown that there is value in its list of vetted mortgage brokers, it has not shown that its competitors – like defendant – don’t also engage in similar vetting processes or that they would forego their own vetting processes and rely on a list taken surreptitiously from plaintiff. Plaintiff’s list of mortgage brokers does not qualify as a trade secret.

The court grants summary judgment for defendant.

The court declines to consider a declaration filed by plaintiff’s chief operating officer (COO) in response to defendant’s summary judgment motion. The declaration appears to attempt to create factual disputes out of whole cloth. Although this situation does not precisely fall under the sham affidavit doctrine, it implicates the same concern. That is, if on a motion for summary judgment the non-movant is allowed to submit affidavits contradicting the facts set forth therein with no reliance on otherwise admissible evidence already in the record, the non-movant could defeat summary judgment every time. Accordingly, based on its timing and content, the court disregards the COO’s declaration.

Where (1) the parties are competitors in the mortgage industry, (2) Lisa Glenn had only a terminable-at-will employment agreement with plaintiff, and (3) plaintiff points to no evidence that defendant’s alleged interference with Glenn’s employment agreement was for any reason other than a legitimate desire to compete, plaintiff cannot show that the interference was without justification. Accordingly, defendant is entitled to summary judgment on plaintiff’s claim of tortious interference with contract.

Although plaintiff contends Glenn was its “valued and trusted agent,” the record shows that Glenn had no authority to vary from plaintiff’s guidelines and instructions. Because plaintiff offers no evidence that Glenn exercised domination or control over plaintiff or that her relationship with plaintiff was somehow different from the typical employer-employee relationship, it cannot prove a fiduciary duty. Defendant is entitled to summary judgment on plaintiff’s breach of fiduciary duty claim.

Where plaintiff alleges the conversion of only information – not the tangible object embodying it – plaintiff’s conversion claim is preempted by the Copyright Act.

Motion granted.

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