Susman Team Wins $706.2M Trade Secret Verdict for Real Estate Valuation Client
Backed by Susman Godfrey, automated appraisal company HouseCanary wins a Texas tussle with Quicken Loans affiliate.
March 15, 2018 at 06:57 PM
3 minute read
They're singing “We're in the Money” at HouseCanary Inc.
The provider of real estate valuation and assessment tools won a $706.2 million verdict Wednesday in a trade secret and breach-of-contract action in Texas state court.
A Susman Godfrey team led by partners Max Tribble and Kalpana Srinivasan persuaded a San Antonio jury that a Quicken Loans affiliate used a license as subterfuge to reverse-engineer its own competing valuation model. The verdict includes $403.2 million in punitive damages.
“I don't think the irony should be lost on anyone: They sued us first,” Tribble said Thursday. “There probably never would have been a lawsuit but that they sued us first.”
HouseCanary was formed after the 2007-09 housing crisis to automate a system of precise residential real estate appraisals. Consumers may be more familiar with the Zillow estimate of home prices, but Tribble says HouseCanary's model is far more accurate and has drawn investors such as former Google chairman Eric Schmidt.
It also drew the interest of Quicken and its appraisal affiliate, Title Source Inc., now known as Amrock. In 2013, Title Source licensed HouseCanary's appraiser software for $5 million a year plus access to Title Source's appraisal data. Both sides signed Title Source's standard nondisclosure agreement, which forbade either party from reverse-engineering the other's models, algorithms or confidential information.
“They kept asking us to disclose more and more of the detail—What are the inputs? How does your model work?” Tribble said. His client was assured that Title Source “was not developing its own valuation models, and that turned out to be totally false. That was their intention. That was what they did.”
At first, Title Source sued HouseCanary for fraud. That prompted HouseCanary to counterclaim for fraud, breach of contract and for theft of its trade secrets. Title Source was represented by Greenberg Traurig.
The jury found against Title Source on all of its claims. Instead, it found Title Source committed fraud against HouseCanary, breached the license agreement and misappropriated HouseCanary's trade secrets.
Tribble said jurors recognized the value of HouseCanary's model to Quicken, the country's second-largest online loan broker. When receiving a refinance inquiry, Quicken and Title Source can use the HouseCanary model to get an immediate and highly accurate valuation. They can decide on the spot whether the lead is worth pursuing, rather than wait several weeks for a human appraiser.
Title Source witnesses insisted they weren't trying to reverse-engineer the HouseCanary model, “but the evidence at trial showed that's exactly what they were doing,” Tribble said.
“It was really the most amazing trial I've ever had,” he said. “And I've had quite a few.”
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View All5th Circuit Judge Jones Slams Proposal for Greater Amicus Brief Funding Disclosure
Norton Rose Lawyers Accused of Accessing Confidential Material in Internal IT Probe
3 minute read'Grave Matter of Serious Consequences': Why a Missouri Judge Sanctioned a Top Kirkland & Ellis Attorney
10 minute readTrending Stories
- 1Trying a Case for Abu Ghraib Detainees Two Decades After Abuse
- 2The Distribution of Dangerous Products Via Online Marketplaces
- 3The Products Liability Case Against Tianeptine: The Deadly ‘Dietary Supplement’ Found at Your Local Store
- 4The Evolving Landscape of Joint and Several Liability in Pa.: A Post-'Spencer' Analysis
- 5A Deep Dive Into the Product-Line Exception in Pennsylvania
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250