Movement Mortgage LLC v. Summit Funding, Inc. et al

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
3:23-cv-00633-RJC
MOVEMENT MORTGAGE LLC,
Plaintiff,
v.
SUMMIT FUNDING, INC., MATT
SCHOOLFIELD, CHRIS SHELTON,
DERAN PENNINGTON, LINDA
PLYMALE, HEATHER FRYE, and
JOSH COVETT,
Defendants.
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STIPULATED PRELIMINARY
INJUNCTION
THIS MATTER is before the Court on Plaintiff’s Motion for Temporary
Restraining Order and Preliminary Injunction (the “Motion”), (Doc. No. 4), and the
parties’ related agreement.
WHEREAS Plaintiff Movement Mortgage (“Movement”) filed a Verified
Complaint against Defendants Summit Mortgage, Deran Pennington, Chris Shelton,
Matt Schoolfield, Linda Plymale, Josh Covett and Heather Frye (collectively,
“Defendants”) on or about October 5, 2023;
WHEREAS Movement claims Defendants have violated restrictive covenants,
misappropriated trade secrets, and engaged in unfair competition, among other
things, as alleged in the Complaint;
WHEREAS Defendants deny all allegations set forth in Movement’s
Complaint and deny any wrongdoing in connection with this litigation and/or their
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separation from or activities concerning Movement and/or their former employment
with Movement;
WHEREAS on October 13, 2023, Movement the Motion, (Doc. No. 4), seeking
the inspection rights of data devices, the identification and return of Movement
materials, and the cessation of solicitations of its staff;
WHEREAS Defendants deny that Movement is entitled to any relief sought
in the Motion;
WHEREAS the Parties, without any acknowledgement of wrongdoing and
without any admission of fault or responsibility, and reserving without waiver all
defenses, rights, arguments, and positions in this litigation have stipulated to the
following:
IT IS, THEREFORE, ORDERED:
1. Within five (5) days of the entry of this Order, Defendants Pennington,
Shelton, Schoolfield, and Plymale shall identify to Movement all Devices in their
possession, custody, or control as of the date of the filing of the Complaint. Defendant
Summit shall identify to Movement all Devices that Summit has given to Pennington,
Shelton, Schoolfield, and Plymale, as well as the shared storage systems under
Summit’s control to which the Individual Defendants have had access. As set forth
herein, “Devices” means any computer, phone, data storage device, personal data
device (such as an iPad), online or cloud storage, or email accounts.
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2. Within ten (10) days of the execution of this Order, the parties shall file
a Confidentiality and Protective Order to be separately agreed to and submitted to
the Court.
3. Movement will select the identified Devices to be imaged by an agreed
upon third party Forensic Consultant (the “Forensic Consultant”). Defendants may
object to any selection at which point, if unresolved, the Parties may bring the matter
to the Court for resolution. Furthermore, a shared drive or cloud storage of Summit
shall not be included in imaging, although Movement can select a shared drive or
cloud storage to be searched, with Summit retaining the right to object to such
selection, which also shall be brought to the Court’s attention if unresolved.
4. The Parties shall work toward negotiating a consent ESI protocol for the
purpose of identifying and removing/returning confidential or proprietary Movement
data and shall submit the consent ESI protocol to the Court within ten (10) days of
this Order. Although the precise parameters shall be set forth in the ESI protocol, in
general, it shall provide for:
a. Movement to identify search terms to be run against the Devices
selected by Movement;
b. An opportunity by Defendants to object to the search terms
proposed by Movement;
c. The delivery of all responsive materials to Counsel for the
particular Defendant whose Device was searched;
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d. The right of Defendants to object to and request the exclusion
from production of any responsive materials;
e. The production of all other materials to Movement along with a
privilege log reasonably identifying any withheld documents (on
the basis of privilege, work product, relevance, etc.); and
f. The ability for any Party to seek Court intervention if the Parties
cannot resolve any objections.
5. Within ten (10) days of disclosure of the search results to Movement,
Movement shall designate to counsel for Defendants all documents it demands be
destroyed. Counsel for Defendants shall have the opportunity to object to the
designation of such materials for destruction, with the Court to resolve any
disagreements. Subject thereto, counsel for Defendants will ensure that all such
documents are destroyed and deleted from any Device.
6. Defendants and their counsel will certify the destruction of materials
and identify any persons or entities that have been provided access to or provided a
copy in any form – electronic or physical – of any information that is identified by
Movement as confidential or proprietary. Notwithstanding the foregoing, Defendants
have the right to petition the Court for a protective order if Defendants object to the
destruction or return of any information designated by Movement hereunder.
7. Defendants and Plaintiff agree that each party may serve ten (10)
interrogatories, ten (10) document requests, and ten (10) requests for admission per
party and that such discovery shall be expedited with a response within 21 days of
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service. This Expedited Discovery shall be in addition to and shall not serve as a
limitation of any other discovery in the litigation, except with respect to the total
number of interrogatories.
8. In addition to the relief set forth herein, Defendants shall not directly or
indirectly solicit any Movement employee to leave Movement and/or join Summit:
a. If Defendants have already solicited that individual since June 1,
2023; and/or
b. If Defendants are directly or indirectly using use any confidential
or proprietary information obtained from Movement to aid or
facilitate such solicitation.
For purposes of this Order, “indirect” solicitation shall not include generally or
publicly viewable social media posts that relate generally to Summit or a job position
at Summit, provided they are not targeted at, sent to, or specifically described or
identified via any form of communication to any Movement employee (or a Movement
employee). Notwithstanding the foregoing and without waiving Movement’s claims
for damages, it shall not be a violation of this Order if a Movement Employee that
has already received a written offer of employment accepts such offer without further
solicitation.
9. Defendants Shelton, Schoolfield, Plymale, Covett and Frye agree they
will not directly or indirectly solicit any current Movement employee to leave
Movement and/or join Summit. Notwithstanding the foregoing, Defendants have the
right to petition the Court for reversal of this restriction.
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10. Defendant Pennington agrees that from the date this stipulation is
entered and for a period of ninety (90) days thereafter, he will not directly or
indirectly solicit any current Movement employee to leave Movement and/or join
Summit. Movement shall have the right to petition for continuance of this restriction
without prejudice.
11. Defendants further agree they will not directly or indirectly make any
statement or suggest that Movement intended to or intends to lower compensation
for any Movement employee(s), except that a statement by any employee of Summit
holding the position of Branch Manager or below such position on the organizational
chart, acting independently and without knowledge of this litigation and/or this
Order, shall not be a violation of this Order, provided that they were not acting at the
instruction, suggestion, or encouragement of any other Defendant herein.
Notwithstanding the foregoing, Defendants have the right to petition the Court for
reversal of this restriction.
12. Summit further agrees to identify to Movement on a strictly Attorneys’
Eyes Only Basis (to include in-house counsel) the identity of all Movement employees
to whom it has provided written offers of employment or otherwise solicited since July
1, 2023, to the date this stipulation is filed.
13. For clarity, “solicit,” “solicited,” and “solicitation” herein mean any
Defendant’s initial contact (by any means), whether directly or indirectly (such as
behind-the-scenes collaboration with another person), of an off-limits Movement
employee for the purpose of recruiting such Movement employee to Summit.
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Accordingly, it shall not be a violation of this Order for any Defendant to recruit or
attempt to recruit any Movement employee who independently and without any
encouragement or solicitation by any Defendant, directly or indirectly (such as
behind-the-scenes collaboration with another person), affirmatively elects to initiate
contact with any Defendant with intention to leave Movement and/or to join, or to
consider joining, Summit, so long as that employee’s actions are not the result of any
direct or indirect solicitation by any Defendant in violation of the terms of this Order.
14. All parties agree that, notwithstanding anything to the contrary, they
are under a continuing obligation to preserve all information and materials relevant
to this dispute. Defendants will not delete any information on any Device to which
the Individual Defendants have had access, except as set forth and in accordance with
the terms of this Order and may not take any actions to disseminate, copy or share
any information that:
a. Concerns Movement,
b. Was obtained from Movement, and
c. Is contained on their Devices.
15. All parties agree that the deadlines set forth herein may be extended by
mutual agreement of the parties.
16. Defendants are not precluded from filing a motion to dissolve this
Stipulation and Order, or any portion thereof, nor is Plaintiff precluded from seeking
further additional relief.
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17. The Parties acknowledge that this Stipulation is entered into by consent
and with the agreement of all Parties and its execution may not be considered as an
indicia of the final outcome of the merits of this litigation.
Signed: November 3, 2023
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