Homesite Mortgage, LLC, v Guaranteed Rate, Inc, and Kevin Sadik, C06, 2020-183741-CB

STATE OF MICHIGAN

IN THE CIRCUIT COURT FOR THE COUNTY OF OAKLAND

BUSINESS COURT

HOMESITE MORTGAGE, LLC,

Plaintiff/Counter-Defendant,

Case No. 20-183741-CB

v Hon. Michael Warren

GUARANTEED RATE, INC.

Defendant,

and

KEVIN SADIK,

Defendant/Counter-Plaintiff.

______________________________________________________________________________

OPINION AND ORDER DENYING

DEFENDANT GUARANTEED RATE, INC.’S

MOTION FOR SUMMARY DISPOSITION PURSUANT TO MCR 2.119(C)(10)

At a session of said Court, held in the

County of Oakland, State of Michigan

May 19, 2022

PRESENT: HON. MICHAEL WARREN

______________________________________________________________________________

OPINION

This cause of action arises out of an Employment Agreement (the “Agreement”)

Kevin Sadik executed on January 30, 2017 as a condition of his employment as a mortgage

originator with Homesite Mortgage, LLC (“Homesite”). Homesite alleges Sadik breached

the Agreement by soliciting Homesite customers during his subsequent employment

with Guaranteed Rate, Inc. (“GRI”). In particular, Homesite alleges Breach of

Employment Contract (Count I), Tortious Interference with Business Relationships and

Expectancies (Count II), Unjust Enrichment (Count III), Civil Conspiracy (Count IV),

Conversion (Count V), Vicarious Liability/Respondeat Superior (Count VI), and Request

for Preliminary and Permanent Injunction (Count VII) against Sadik and GRI.

Before the Court is Defendant Guaranteed Rate, Inc.’s Motion for Summary

Disposition Pursuant to MCR 2.119(C)(10). Oral argument is dispensed as it would not

assist the Court in its decision-making process.

At stake is whether summary disposition pursuant to MCR 2.116(C)(10) is

warranted when GRI fails to cite and brief the standard of review and related authority

to support the relief sought? Because GRI has a duty to fully present legal arguments for

resolution to meet its burden, the answer is “no” and GRI’s Motion is denied.

MCR 2.119(E)(3) provides courts with discretion to dispense with or limit oral argument and to require

briefing. MCR 2.116(G)(1) specifically recognizes application of MCR 2.119(E)(3) to summary disposition

motions. Subrule (G)(1) additionally authorizes courts to issue orders establishing times for raising and

asserting arguments. This Court’s Scheduling Order clearly and unambiguously set the time for asserting

and raising arguments, and legal authorities to be in the briefing – not to be raised and argued for the first

time at oral argument. Therefore, both parties have been afforded due process as they each had notice of

the arguments and an opportunity to be heard by responding and replying in writing, and this Court has

considered the submissions to be fully apprised of the parties’ positions before ruling. Because due process

simply requires parties to have a meaningful opportunity to know and respond to the arguments and

submissions which has occurred here, the parties’ have received the process due.

Background

The parties agree that Sadik signed the Agreement as a condition of his

employment with Homesite and the Agreement contains a non-disclosure and non-

solicitation provision. The Agreement states as follows:

8) During the course of employment the Originator will acquire or have

access to company trade secrets and proprietary Information consisting of

but not limited to: marketing systems, processing techniques, loan officer

compensation plans, borrower names and their corresponding personal

Information, computer programs, training manuals, Internal documents,

sales data, and quality control records which are of a highly confidential

and private nature. It is agreed that:

a) Originator will not disclose any of the Information identified

above, either directly or indirectly, to any other person or company

without prior written approval from HMC.

b) Originator further understands that federal law prohibits the

unauthorized use of our borrower’s personal information and the

Originator will hold HMC harmless for any and all damages that

may occur as a result of the Originator’s violation of this agreement

or any law.

c) Originator agrees that ALL information contained in each

borrower’s loan file is the exclusive property of HMC and is to

remain Intact and within the office of HMC in accordance with state

lending laws and the Federal Privacy Act.

d) Non-Solicitation: Upon termination of this employment

agreement the Originator agrees and covenants to refrain from

directly or indirectly soliciting for any business reason and

specifically for any mortgage related services, any prospective

mortgage applicant, current applicant, closed mortgage loan

customers, marketing leads, referred leads from any third party, and

anyone else with whom Originator came in contact with while

employed with HMC that could in any way have the potential to

conduct business with HMC as a mortgage loan borrower.

Additionally, upon termination of this employment agreement

Originator shall not take any action to Induce or influence, or

attempt to induce or influence, any other employee of HMC to leave

the employment of HMC, or to employ or attempt to employ any

current or past employee of the HMC.

e) The covenants detailed in sections 8(a), 8(b), 8(c), 8(d) and this

section shall survive the termination of this agreement and remain

in effect into perpetuity. In the event of a violation or attempted

violation of this covenants in this section, in addition to any and all

legal and equitable remedies which may be available, this covenant

Page 3 of 7 may be enforced by a temporary and/or permanent

injunction issued by a Court of competent jurisdiction. Originator

acknowledges that the remedy at law for a breach or threatened

breach of this covenant may be inadequate.

On August 2, 2017, Sadik signed an Employee Acceptance and Receipt

acknowledging that he received a copy of the Employee Handbook. Sadik further

accepted and agreed that “I am aware that during the course of my employment,

confidential Company or customer information may be made available to me. I

understand that this information must not be given our or used other than for the benefit

of the Company. In the event of termination of my employment, I agree not to disclose

or use this information with any other individual or Company, or to the detriment of the

Company.”

During the course of his employment, Sadik manually entered and stored

customer names and contact information in his personal cell phone. [Deposition of Sadik,

p 36.]

Sadik’s employment was terminated on February 27, 2020. On February 28, 2020,

Sadik emailed everyone on his client or customer list in his phone, [Deposition of Sadik,

pp 57-63, 102], from his GRI email address, notifying them of his new role at GRI:

Hello Everyone,

I just wanted to let you know I have taken a new position with Guaranteed

Rate, which is the seventh largest lender in the country and growing. I am

now the Southfield, MI new Branch Manager of Guaranteed Rate. Because

of this position and bigger roll (sic) I can offer better packages tailored

exactly to your needs. Please let me know if you have an (sic) questions or

mortgage wants or needs. It is an excellent time to refinance!

Sadik did not have discussions with GRI about the Agreement or the non-

solicitation provision. [Sadik Deposition, pp 35-36, 49, 53.]

Sadik signed a Retail Sales Compensation Plan and Agreement with GRI on

February 27, 2020. Sadik also signed

a Permitted Marketing Data Affidavit and Policy

(the “GRI Agreement”) in which he acknowledged and agreed as follows:

Guaranteed Rate, Inc. (the “Company”) expects that all employees honor

and comply with obligations they may have to their prior employers,

including, without limitation, obligations of confidentiality and

nonsolicitation of customers and employees. Consistent with this

expectation, the Company will only accept marketing lists and data from

employees if those lists and data meet the definition of “Permitted

Marketing Data” or “PMD” as described in the attached Permitted

Marketing Data Policy (the “PMD Policy”) and otherwise satisfy the

requirements of the PMD Policy. Under no circumstances does the

Company accept any customer documentation such as loan applications,

loan files, 1003’s, W-2’s, 1099’s, tax returns, transcripts, credit scores, social

Sadik’s signature is dated February 2, 2020, more than three weeks before his employment at Homesite

was terminated.

security numbers, and underwriting transmissions from on boarding

employees. All employees must agree to this Affidavit prior to submitting

any PMD, and all loan officers and operations employees must agree to this

Affidavit when onboarding or as otherwise directed by the Company. By

submitting any PMD to the Company:

1. You represent and warrant that neither you nor anyone acting on

your behalf has: (a) taken, accepted, copied, exported or misappropriated

from any prior employer or other party any Information that is: (i) the

confidential, proprietary or trade secret information of such party or (ii)

otherwise subject to a legal, contractual or regulatory restriction that would

prohibit or limit its disclosure to or use by the Company (collectively, “Prior

Confidential Information”)or (b) transmitted, communicated or divulged

any Prior Confidential Information to the Company or its employees.

2. You agree that, during the course of your employment with the

Company, neither you nor anyone working on your behalf will violate any

continuing and legally enforceable post-employment restrictive covenants

or other obligations to your former employer(s) or any other party, whether

imposed by contract, statute or common law (“Previous Obligations”),

including, but not limited to, by engaging in any of activities described in

Paragraph 1 above or using or disclosing any Prior Confidential

Information in any unauthorized manner in connection with loan

origination activity or any other business for the Company.

3. With respect to any PMD you submit to the Company for marketing

purposes, you represent and warrant that you have all legal rights, consents

and authorizations necessary to disclose and use such PMD in that manner

and that such disclosure and use does not and will not violate any Previous

Obligations.

4. You acknowledge and agree that: (a) you have received and read the

PMD Policy and (b) you are subject to and bound by the PMD Policy, as

may be amended by the Company from time to time.

The Permitted Marketing Data Policy (the “Policy”) states, in part, “PMD cannot

include any information or data that: (1) is the confidential or proprietary information of

any employee’s former employer(s) or was exported from the files, databases or systems

of any employee’s former employer(s), unless such employee has the express written

permission of such former employer(s) to use and disclose such information, or (2) is

otherwise subject to a legal, contractual or regulatory restriction that would prohibit or

limit its disclosure to or use by the Company” and “Prior to submitting PMD to the

company, each LO and any other employee submitting PMD must sign an Affidavit

confirming that: (1) the employee has all legal rights, consents and authorizations

necessary to disclose and use the PMD for marketing purposes at the Company, (2) that

the employee’s disclosure and use of such PMD at the Company does not and will not

violate any continuing and legally enforceable obligation to the employee’s former

employer(s) or another party, and (3) the employee acknowledges and agrees that the he

or she has received, read, and is bound by this Policy, as may be amended from time to

time.”

On March 9, 2020, Homesite’s counsel sent correspondence to Sadik to cease and

desist contacting any clients of Homesite. Steve Konja of GRI advised Sadik not to contact

anyone except new leads purchased through third-party services. [Deposition of Sadik,

p 81.] Sadik continued to be contacted by Homesite’s customers. [Deposition of Sadik, pp

55-57, 83-84.]

III

The Arguments

GRI moves for summary disposition under MCR 2.119(C)(10). GRI argues that

Homesite’s claim for Breach of Contract fails because GRI is not a party to the Agreement.

GRI argues that Homesite cannot sustain its claim for Tortious Interference with Business

Relationships and Expectancies because Homesite has failed to establish a valid business

relationship or expectancy or GRI’s intentional interference with the same. GRI further

argues Homesite cannot sustain its claim for Unjust Enrichment because there is no

evidence GRI received a benefit from Homesite. GRI argues that names and contact

information is insufficient to sustain a claim for Conversion and there is no evidence GRI

knew the names and contact information were converted. Finally, GRI argues that

Homesite’s claim for Civil Conspiracy fails in the absence of an actionable tort and

Vicarious Liability/Respondeat Superior and Request for Preliminary and Permanent

Injunction are not independent causes of action.

Homesite argues that GRI’s Motion is procedurally defective because it fails to

state with particularity the grounds and authority on which it is based. Homesite further

argues that GRI had knowledge of Homesite’s business relations and expectancies and

tortiously interfered with those relationships, causing damage. Homesite argues that GRI

was unjustly enriched by receiving benefits from Homesite’s confidential customer

information which it received with knowledge that the information was converted.

Homesite finally argues that it has established that Sadik and GRO conspired together to

take customer lists and confidential information from Homesite.

GRI’s Motion for Summary Disposition is defective because

it fails to cite the appropriate standard of review

GRI’s Motion fails to set forth the standard of review for a motion filed under MCR

2.116(C)(10). Indeed, no reference is made to MCR 2.116(C)(10) and instead MCR

2.119(C)(10) is cited four times in the submission.

However, Michigan jurisprudence is clear that an argument must be supported by

citation to appropriate authority and analysis otherwise the argument is abandoned. See,

e.g., MCR 2.119(A)(1)(b) (“a motion must . . . state with particularity the grounds and

authority on which it is based”); Houghton v Keller, 256 Mich App 336, 339-340 (2003) (a

party “may not merely announce his position and leave it to this Court to discover and

rationalize the basis for his claims . . . nor may he give issues cursory treatment with little

or no citation of supporting authority” (citations omitted)). Conclusion without authority

is insufficient to warrant dispositive relief or even to bring an issue before the Court for

review. Mitcham v City of Detroit, 355 Mich 182, 203 (1959) (“It is not enough . . . to simply

announce a position or assert an error and then leave it up to this Court to discover and

rationalize the basis for his claims, or unravel and rationalize the basis for his arguments,

and then search for authority either to sustain or reject his position”); Wilson v Taylor, 457

On Reply, GRI attempts to cure the defectiveness by claiming it the erroneous citation was a typographical

error and “GRI did not believe this Court needed a lengthy recitation of the standard of review for summary

judgment, with which this Court is already familiar.” This argument is unavailing. First, the time to join

the argument and address the standard of review was in the Motion, not the Reply. See Quinto v Cross &

Peters Co, 451 Mich 358, 362 (1996).

Second, even in the Reply, GRI only cursorily addresses the standard.

Third, the Reply refers to “summary judgment” - a term of art unknown in the Michigan Rules of Court.

Mich 232, 243 (1998) (“A mere statement without authority is insufficient to bring an issue

before this Court”). “Trial Courts are not the research assistants of the litigants; the parties

have a duty to fully present legal arguments for its resolution of their dispute.” Walters v

Nadell, 481 Mich 377, 388 (2008). In connection with a motion under MCR 2.116(C)(10),

the moving party “must specifically identify the issues” as to which it “believes there is

no genuine issue” of material fact and support its position as provided in MCR 2.116.

MCR 2.116(G)(4). The party moving for summary disposition has the burden to

conclusively prove its claim. See Shelton v Auto-Owners Ins Co, 318 Mich App 648, 657

(2017). Thus, to obtain summary disposition, the moving party must show that there is

no question of material fact as to any of the elements of his or her claim. Id. If the moving

party properly supports its motion, the burden “then shifts to the opposing party to

establish that a genuine issue of disputed fact exists.” Quinto, 451 Mich at 362. If the

moving party fails to properly support its motion for summary disposition, the

nonmoving party has no duty to respond and the trial court should deny the motion.

MCR 2.116(G)(4); see also Meyer v City of Center Line, 242 Mich App 560, 575 (2000)

(concluding that the trial court erred when it granted an improperly supported motion

for summary disposition under MCR 2.116[C][10]).

Simply put, GRI’s argument fails to meet its burden and the Plaintiff had no duty

to respond.

ORDER

Based on the foregoing Opinion, Defendant Guaranteed Rate, Inc.’s Motion for

Summary Disposition Pursuant to MCR 2.119(C)(10) is DENIED.