Appraisals and ValuationsMortgage

Amrock levies blockbuster claims against HouseCanary, wants $740 million verdict overturned

Claims HouseCanary engaged in collusion, fraud, and deception

HouseCanary and its top executives engaged in collusion, fraud, and deception as part of an effort to convince a jury to order Amrock to pay out one of the largest judgments in the country this year, Amrock claims in a blockbuster legal filing.

When Amrock, the title insurance, settlement services, and valuations provider formerly known as Title Source, said that last month that it had no intention of simply paying out a $740 million judgment for allegedly stealing trade secrets from HouseCanary, the company apparently meant it.

Amrock now claims that it has sworn affidavits from three whistleblowers who state that HouseCanary’s entire case was based on fraud and that HouseCanary CEO Jeremy Sicklick conspired with the Amrock executive in charge of the initial negotiations between the two companies to willfully misrepresent the capabilities of HouseCanary’s products.

And based on these new revelations, Amrock wants a new trial and the $740 million judgment against it tossed out.

“This is one of the most egregious frauds that I have ever seen in my 35-year career as a litigator and former federal prosecutor,” Randy Mastro, a Gibson Dunn attorney who is now representing Amrock, said in a statement.

“This shocking verdict is now wholly undermined for many reasons by several former HouseCanary executives who have come forward for the first time, as a matter of conscience, to blow the whistle on this fraud,” Mastro continued.

“As these witnesses now confirm in their sworn accounts, the jury in this case was simply duped and misled,” Mastro added. “Had it known the truth, no reasonable jury would have rendered this unprecedented verdict. The deception, collusion and cover-up that occurred here require a new trial so the truth can be told and justice served.”

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.

Last month, 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.

The fight began back in 2015 when HouseCanary and Title Source (as it was known then) signed a contract that specified 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.

Those allegations led to a lawsuit from Title Source, which initially claimed that HouseCanary’s products were “completely unusable,” and a countersuit from HouseCanary, which claimed that Title Source stole its data and technology to allow Title Source and its related companies, including Quicken Loans, to develop its own property analytics and software.

Eventually, a Texas jury awarded HouseCanary more than $700 million, but now, Amrock claims that HouseCanary’s case is based on rampant fraud and wants a new trial.

To that end, Amrock filed a new motion in Texas, requesting a new trial and laying out its reasons for believing a new trial is warranted.

Chief among those is HouseCanary’s alleged malfeasance throughout the entirety of the companies’ business relationship and the trial.

According to Amrock’s lengthy new filing, the company’s CEO, Jeff Eisenshtadt received an email from an anonymous source one day after the jury reached its original verdict.

The email claimed that HouseCanary’s entire case was built on a mountain of lies and that HouseCanary was never able to develop its own AVM. Rather, the tipster claimed that HouseCanary’s AVM was actually an overlay on top of a functioning AVM from Black Knight, presented to look like a newly developed product from HouseCanary.

Eventually, the whistleblower decided to come forward and revealed himself to be Anthony Roveda, who worked as HouseCanary’s director of appraiser experience from 2015 through 2016.

Now unmasked, Roveda and two other former HouseCanary executives claim in sworn affidavits that “HouseCanary had no proprietary technology and lied to Title Source repeatedly—holding out promises of a revolutionary app while exploiting its relationship with Title Source to keep its business afloat.”

The whistleblowers also claim that HouseCanary executives colluded with Title Source’s main witness, former Title Source Vice President & Chief Appraiser Jordan Petkovski.

According to the whistleblowers, Sicklick conspired with Petkovski, who was in charge of the negotiations between the two companies from the Title Source side.

The whistleblowers claim that Sicklick promised Petkovski a job and shares in the company in exchange for helping to hide that HouseCanary provided Amrock with non-functioning software and that HouseCanary lacked any proprietary products.

The whistleblowers also claim that HouseCanary went so far as to offer ambiguous “consultant” agreements to certain interested parties in order to secure their silence.

“When a verdict is so tainted by fraud and collusion, the interests of justice do not allow it to stand. The new evidence here, discovered after the verdict, could not have reasonably been uncovered by Title Source before trial,” Amrock claims in its legal filing.

“Indeed, Title Source could not have been expected to suspect such a scheme between HouseCanary and one of its trusted senior executives, especially one so carefully hidden by the co-conspirators. Nor could it have uncovered—without the benefit of those with first-hand knowledge—the extent to which HouseCanary has gone to cover its tracks,” the filing continues.

“As now discovered, the evidence not only reveals new facts directly contradicting the core evidence HouseCanary put on at trial, but it also casts much of what was presented at trial in an entirely different light,” the filing states. “Thus, it is more than probable that the jury’s verdict would have been different had it known of HouseCanary’s scheming and Petkovski’s double-dealing. A new trial is required.”

Put simply, the whistleblowers claim that HouseCanary never had any trade secrets to steal.

As for HouseCanary, the company claims that Amrock’s new allegations are “brazen and unsupported,” and said that this filing is nothing but an attempt to delay the inevitable.

“HouseCanary remains confident in the Court’s final judgment in this case. This filing is nothing more than a delay tactic by the Title Source Inc. attorneys to try to discredit a fair and unanimous judgment by making brazen and unsupported allegations,” HouseCanary said in a statement provided to HousingWire. 

“During trial, the jury heard seven weeks of evidence, and then rightfully and unanimously found that Title Source fraudulently misappropriated HouseCanary’s trade secrets,” the company continued. “Title Source should be held accountable for its actions and nothing in today’s filing – which is trying to distract from the recently issued judgment — changes that.”

Most Popular Articles

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

Log In

Forgot Password?

Don't have an account? Please