Texas LOs Lose Appeal Against Former Employer

Jesse Rodriguez Benavides, Barry Brooks, Stefen Douglas Brooks, Heston C. Kings and Johanna Barton were all loan originators at Excellence Mortgage Ltd, according to court documents.

In September 2010, the owners of the Texas company advised its employees that a restructuring of Excellence was in the works and merger discussions were being held with Georgetown Mortgage LLC.

But during a training session with Georgetown, the originators allegedly learned that potential employment with Georgetown would be at terms less favorable than they had with Excellence.

So King, Benavides and both Brooks all gave their notices of resignation. A few days before they departed on Oct. 1, 2010, Barton was terminated.

All five originators landed at Premier Nationwide Lending on Oct. 4, 2010, and they contacted each of their customers to ask them to transfer their loan files to Premier.

Each prospective borrower sent a letter to Excellence requesting file transfers.

So Excellence filed a lawsuit against the originators and Premier that same month and obtained a temporary restraining order preventing the originators and Premier from contacting customers.

Premier quickly settled the claims with Excellence, returned the loan files and agreed not to accept anymore file transfers.

The originators claim that the action by Excellence resulted in a lost ability to earn commissions — causing them to suffer severe financial losses. So they filed a counter-claim against Excellence asserting various claims including breach of contract, unlawful restraint of trade and interference with prospective business relations.

Excellence then filed a motion for summary judgment , which was granted following a July 2012 hearing.

The originators then filed an appeal with the Fourth District Court of Appeals of Texas.

Last week, the appellate court affirmed the trial court’s judgment.