Corinthian Mortgage files lawsuit against Summit Financial Group
By PATRICK CROWLEY
2/3/2004

A West Virginia mortgage and financial services company is defending itself against charges of stealing trade secrets from a competitor.

Summit Financial Group is denying two of its subsidiaries -- Summit Financial LLC and Shenandoah Valley National Bank -- did anything wrong by hiring former employees of Corinthian Mortgage Corp.

But in a lawsuit filed in the Circuit Court of Fairfax County, Va., Corinthian Mortgage has alleged Summit received trade secrets from former employees now working for Summit.

"The filings allege various claims ... arising out of the hiring of former employees of Corinthian Mortgage Corp. and the alleged use of trade secrets," Summit said in disclosing the suit through a written statement.

"The ... defendants have also been sued based on allegations arising out of their former employment relationship with Corinthian Mortgage and their current employment with Summit Financial LLC," according to the statement.

Summit spokesman Robert Tissue said in an E-mail that no additional comments would be made.

Officials at Kansas City-based Corinthian could not be reached to comment after several attempts to contact them.

Summit has denied all allegations in the suit and said in the statement it believes "that plaintiff's claims are without foundation and that meritorious defenses exist as to all the claims."

"Summit ... believes that the lawsuit is without merit and will have no material adverse affect on the company," it said. "Management ... is unable to estimate the impact, if any, an adverse decision may have on the company's results of operations or financial condition."

Corinthian is seeking punitive damages of $350,000 on each claim, Summit said.

Summit scored a recent victory when a judge refused to issue a temporary injunction Corinthian sought in court.

Corinthian wanted "permanent and temporary injunctive relief prohibiting the alleged use of trade secrets by Summit Financial and the alleged solicitation of Corinthian's employees," Summit said.

Summit Financial says it is a financial holding company with total assets of $790 million that three wholly owned subsidiary banks as well as Summit Financial LLC, a residential mortgage loan originator in Herndon, Va., that opened during the third quarter of 2003.

Corinthian also operates mortgage offices in Herndon.

On its Web site Corinthian, which also does business as SouthBanc Mortgage, says it is the mortgage lending division of SOUTHBank, a federal savings bank with total assets of approximately $450 million.

The company says it originates "approximately $1 billion in single-family residential mortgage loans annually" and operates in 47 states and the District of Columbia.

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