Movement to settle dramatic legal battle with Summit

Movement Mortgage, a top-25 U.S. mortgage lender, is close to resolving a two-year legal battle with rival Summit Funding, its founder and president Todd Scrima, and several former employees who transitioned to the competitor.

The case, which involved allegations of employee poaching, misappropriation of trade secrets and corporate espionage, has now reached a settlement but details are still pending, according to court filings.

The dispute began in early October 2023, when Movement filed a lawsuit in a U.S. District Court in North Carolina against Summit and three veteran sales executives—Deran Pennington, Matt Schoolfield and Chris Shelton—who had joined Summit in July of that year.

The South Carolina-based retail lender accused the trio and their new employer of misappropriating trade secrets, stealing data and improperly soliciting Movement employees, among other claims.

In the lawsuit, Movement alleged that Pennington began engaging with Summit in March 2023 while continuing to receive compensation and access to confidential company information. He was also accused of “surreptitiously soliciting” Shelton and Schoolfield and encouraging them to help recruit other Movement employees.

In response, Pennington filed a counterclaim seeking approximately $9.8 million in what he said was unpaid compensation.

Escalating the legal battle, Movement filed a separate lawsuit in December 2023 against Todd Scrima, founder and president of Summit Funding, alleging corporate espionage.

In this action, Movement was supported by Summit’s former chief growth officer, Brian Mitchell, who provided details about the alleged poaching scheme. Mitchell currently has a separate lawsuit pending against Summit in California for wrongful termination.

The settlement, filed in court on April 29, covers Movement’s lawsuits against Summit, Pennington, Schoolfield, Shelton, Shelton’s secretary Linda Plymale, and Summit market leaders Heather Frye and Josh Covett, who also moved from Movement. It also includes the case filed against Scrima.

The defendants “respectfully give the court notice that the parties to these cases have reached a settlement in principle, and the parties are currently working on finalizing the settlement terms and papers,” the court filing states. 

Movement and Summit did not respond to HousingWire’s requests for comment. Mitchell declined to comment.