Prospect Mortgage, LLC Dismisses Lawsuit Against American Financial Network, Inc. & Former Employees

No Liability found in case against AFN and its former employees for alleged solicitation. Former employees are allowed to solicit under CA state law.

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American Financial Network, Inc.

Oct 22, 2014, 08:00 ET

SANTA CLARA COUNTY, Calif., Oct. 22, 2014 /PRNewswire/ -- American Financial Network, Inc. ("AFN") obtained a victory in its opinion against Prospect Mortgage, LLC ("Prospect"), who sued its former employees David Shumard, John Telesco, Jerry Shumard, and Michelle Belmonte, alleging violations of non-solicitation clauses of their employment agreement as well as unfair competition and economic interference (Prospect v. Shumard, Santa Clara County, Case No. 112CV231227). Prospect claimed damages in excess of $20 million, but was ultimately forced to dismiss its lawsuit. Prospect simply had no credible evidence to support its claims, according to AFN's General Counsel, Jonathan Gwin, Esq.

The dismissal comes shortly after Prospect suffered a loss in its case against Jeremy DeRosa and Stearns Lending (Prospect v. DeRosa, Orange County, Case No. 30-2012-00559233) where it sued Stearns Lending and several former employees claiming identical violations. The jury found that Prospect's former employees did nothing wrong and cited the following jury instruction:

"Under California law, a person can always legally receive and consider job applications and inquiries from his former coworkers, regardless of any contract or circumstance restricting him or her from recruiting or soliciting his former coworkers."

AFN employees David Shumard, John Telesco, Jerry Shumard, and Michelle Belmonte feel vindicated to depart the previous work environment. All of them thank the AFN legal team and expressed excitement in clearing their names and reputations. "We're just glad to finally clear our names of all wrong-doing," stated David Shumard. John Telesco adds, "No one should feel trapped in a toxic work environment and the law supports an employee's right to make a move without legal repercussions."

"I am satisfied with the outcome of this case and welcome the opportunity to bring great employees to AFN in the future," AFN President, John Sherman, added. "It's disappointing when any company initiates needless litigation, especially when the company is within our LendersOne community. Responsible leaders should always attempt to reach an amicable resolution outside of court."

AFN CEO, Jack Sherman, added, "The business is hard enough in modern times without having to fight amongst ourselves."

AFN employees David Shumard, John Telesco, and Jerry Shumard also dismissed their cross-complaint against Prospect. It was alleged that Prospect engaged in illegal business practices such as consumer discrimination, illegal compensation, and violations of consumer privacy rights. David Shumard explained, "We just wanted to move forward and focus on what we do best, originating mortgages."

Lead Counsel for AFN, Brett La Cues, Esq. stated, "I was excited to take this case to trial because the facts were on our side, but the best outcome for my clients was to agree to the mutual dismissal so that they could focus on their business."

For more information on the case, contact Brett La Cues, Esq. or Jonathan Gwin, Esq. at (909) 627-3535.

About The La Cues Law Group

The La Cues Law Group has successfully represented individual and corporate clients in the California area for over 30 years. They are dedicated to providing quality representation and understand the importance of keeping clients informed. As experienced trial attorneys well versed in both plaintiff and defense strategies, they are prepared to aggressively seek the best resolution. They pride themselves on the quality of their strategic thinking and their ability to creatively resolve cases in the most cost effective manner for clients.

About American Financial Network, Inc.

As one of the fastest growing mortgage bankers in the United States, AFN opened its doors in 2001 under the leadership of John Sherman and Jack Sherman, and has since expanded into many community-based branches across the nation. Headquartered in Chino Hills, California, American Financial Network, Inc. built its reputation as an outstanding mortgage banking firm by serving the lending needs of real estate professionals, builders, and individual homebuyers throughout the United States.

AFN is a Direct Lender with delegated authority to underwrite, fund and service Fannie Mae, FHA, USDA, VA, and Jumbo loans products in-house. Our success and expansion is built on core values including streamlined and efficient operations that optimize organizational output as well as an approach to customer service founded on exceeding expectations. If interested in joining our team, please contact [email protected] and ask for Jonathan Gwin. For media contacts, please contact marketing manager, Kim Skulavik at (909) 606-3905.

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SOURCE American Financial Network, Inc.