Appraisals and ValuationsFintechInvestmentsMortgage

Amrock ordered to pay $740 million to HouseCanary for trade secret theft

Texas judge hands down largest judgment in U.S. this year

A Texas judge last week ordered Amrock, the title insurance, settlement services, and valuations provider formerly known as Title Source, to pay just shy of $740 million to HouseCanary after denying Amrock’s request to vacate a jury’s earlier decision in a trade secret theft battle that rocked the housing industry.

Back in March, Amrock was ordered to pay $706.2 million to HouseCanary after a Texas jury found that Amrock fraudulently misappropriated HouseCanary’s real estate valuation technology and appraisal analytics and breached confidentiality and other agreements between the parties.

Amrock questioned the jury’s decision, but last week, a Texas judge denied Amrock’s request to vacate the jury’s decision and handed down a final judgment in the case.

Judge David Canales of the 73rd District Court in Bexar County ordered Amrock to pay nearly $740 million, including the $706,200,000 in actual and punitive damages awarded by the jury, plus prejudgment interest of $28,989,154, and attorney’s fees of $4,528,711.

According to Amrock, the judgment is the largest handed down in a U.S. court this year and one of the largest in the history of the state of Texas.

Amrock claims that HouseCanary’s case is built on fraudulent assertions, laid bare by three whistleblowers who testified that HouseCanary did not develop any technology for Title Source as it was contractually obligated to, and that HouseCanary’s case was the product of “fraud and collusion.”

Amrock’s legal representation said that the company has no plans to give up the fight and will request a new trial and, if necessary, appeal.

“We are disappointed that the Court did not throw out the jury’s verdict in light of HouseCanary’s expert witnesses testifying there was no wrongdoing, and further evidence contradicting the claims of ‘trade secret’ misappropriation,” said Amrock attorney David Prichard, of Prichard Young. “We look forward to putting the whistleblowers’ evidence of fraud and collusion before the judge and are confident that once this evidence is aired, justice will prevail – a verdict procured by fraud and false testimony cannot be allowed to stand.”

Prichard also laid out the company’s legal arguments.

According to Prichard, HouseCanary promised to develop an app for Amrock that would allow Amrock’s appraisers to complete appraisals in the field, and agreed to provide certain other data and analytic products, including an automated valuation model.  But, Prichard claims that Amrock never received what it was owed.

The fight began back in 2015 when HouseCanary and Title Source (as it was known then) signed a contract that stipulated that HouseCanary would provide appraisal and real estate valuations data and information to Title Source, which is owned by Quicken Loans’ parent company Rock Holdings.

But HouseCanary claimed that Title Source lied about its intended purpose in the agreement and instead used HouseCanary’s systems to gain access to its intellectual property, formulas, algorithms, models, analytics, products, and proprietary data.

HouseCanary also claimed that Title Source used HouseCanary’s products and offerings, like its AVMs, without paying for them; collected a “critical mass” of HouseCanary’s proprietary data; and ultimately used all of that information to “secretly replicate” HouseCanary’s protected technology and intellectual property.

According to HouseCanary, after the data and analytics provider finished 18 months of work for Title Source, Title Source refused to pay for the work HouseCanary did. Instead, Title Source sued HouseCanary in Texas court, claiming that HouseCanary’s products were “completely unusable.”

HouseCanary countersued, and in the course of that lawsuit, claimed that it discovered that Title Source had misappropriated its data and technology to allow Title Source and its related companies, including Quicken Loans, to develop its own competing property analytics and software.

During the jury trial, Amrock claims that the jury was led “astray” by HouseCanary’s legal representation, which used “heated anti-corporate diatribes and personal attacks on Amrock’s counsel” to convince the jury to hand down the massive judgment.

“HouseCanary’s own expert witness testified during trial that Amrock’s AVM – which the company created independently of any HouseCanary technology – contained none of HouseCanary’s supposed trade secrets,” Prichard’s office claimed. “In fact, HouseCanary never shared any ‘trade secrets’ with Amrock.”

And now, Amrock plans to fight the case for as long as it takes.

“In the end the truth will prevail. Whether it’s in this court or the next, the truth will come forward,” Prichard said. “There is no legal avenue Amrock will not explore, no matter how much it will cost or how long it will take.”

HouseCanary, as one might imagine, was very happy with the judge’s decision to uphold the jury’s decision and enlarge its award from Amrock.

“HouseCanary is pleased that the Court has entered final judgment in this case,” said Jeremy Sicklick, CEO and co-founder of HouseCanary.

“We were confident that the Court would follow the law and enter a judgment thoroughly consistent with the jury’s verdict. The jury and the Court, during two months of trial, heard extensive evidence of Title Source’s misappropriation of HouseCanary’s highly valuable trade secrets related to its real estate valuation analytics along with Title Source’s fraudulent conduct and contractual breaches,” Sicklick added. “The judgment reflects the jury’s findings in favor of HouseCanary on every single issue.”

[Update: The headline of this article has been updated to reflect that the judge’s decision was not on an appeal.]

Most Popular Articles

Latest Articles

2024 is not the year to cut corners on staging — here’s why 

With home prices reaching unprecedented heights and interest rates soaring, the discerning nature of today’s buyers requires all agents to employ every possible advantage. Simply put, cutting corners on staging is a risky move that risks prolonged market presence.

3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please