$450K awarded in title dispute
A Nevada judge awarded $450,000 in damages to two title insurance companies after ruling their trade secrets were stolen by a company with ties to Inter-County Title of Nevada County.
Judge James Hardesty in Reno held that Inter-County Title Company of Nevada and its majority owner, Grass Valley-based Lawrence E. Ormsby, “encouraged, cooperated and assisted” the taking of proprietary information from First American Title Company of Nevada.
Hardesty awarded $150,000 in compensatory damages and $300,000 in punitive damages to First American and Founders Title Company of Nevada.
Founders is owned by California Land Title Company of Grass Valley. Ormsby said he owned a majority of Inter-County of Nevada, and owns 50 percent of Inter-County of Nevada County in Grass Valley.
“I am extremely pleased that the court saw fit to recognize the substantial loss caused by Mr. Ormsby and his company’s actions, and to require Inter-County to return the money they received,” Gordon H. Hellwig, Jr., president of Founders and owner of California Land, said in a written statement.
“The fact that the court also awarded punitive damages to punish and deter future conduct is also certainly warranted.”
Ormsby said Tuesday the decision “absolutely” will be appealed, and he is confident that the disputed records will prove not to be trade secrets.
Reno attorney Mike Walsh, who defended Ormsby in the case, said Tuesday he will file a motion for reconsideration of the decision by today.
“The end of this isn’t anywhere close to being near,” Ormsby said. “Mr. Hellwig is being a little premature (in declaring victory).”
The suit involved “title plants” owned by First American and Founders. Plants are records organized by property location that include deeds, liens and other recorded documents that affect the title to a property.
Because counties typically index titles by the property owner’s name, a title search can be time consuming and cumbersome. Title plants speed up the process.
Title plants for Washoe County from 1901 to 1964 were owned by Founders, and plants from 1964 to the present were owned by First American, Founders and other title companies when Inter-County of Nevada opened for business in Reno around June 1, 2000, according to the judge’s ruling.
Joseph T. McCaffrey was the head of First American’s commercial title business when he went to work for Ormsby in the spring of 2000, receiving a $7,000 signing bonus.
McCaffrey had access to all of First American’s records and title plant microfiche. Before leaving First American, he began downloading and e-mailing the records, according to the decision.
“The court finds McCaffrey, with the encouragement, cooperation and assistance of Ormsby, appropriated all three title plants from (First American),” Hardesty wrote. “Ormsby had knowledge of and acquiesced to the theft and conversion of these documents by McCaffrey.”
Ormsby said Tuesday he was the victim of a “rogue employee who did something wrong … (McCaffrey) was consistently instructed not to bring anything with him.”
The court concluded that Inter-County of Nevada had the plants from May 2000 to August 2002, when a writ of attachment was served on Inter-County and its records were seized.
Hardesty concluded from evidence presented at trial that Inter-County of Nevada completed 3,000 title searches using the plants, and that each search was worth $50.
Because 170 of the searches used the 1901-1964 plant owned by Founders, the company received compensatory damages of $8,500, and First American received $141,500.
The judge then awarded First American $283,000 in punitive damages and Founders $17,000.
Founders joined the suit filed by First American after company officials discovered Founders’ 1901-1964 plant in the records seized from Inter-County of Nevada.
Ormsby said Tuesday he offered to settle the case for more money than the judge awarded, and he is still willing to discuss a settlement.
“I would welcome the opportunity to sit down and resolve this issue,” he said. “I’m not interested in continuing the fight, but I have to get the record corrected.”
What is a ‘title plant?’
Counties typically index property titles by the owner’s name. For people conducting a title search, this can mean a time-consuming process locating the title and associated documents.
Several companies have reorganized title records based on the geographic location of the property. These records are known in the industry as “title plants.”
Title plants are typically sold or licensed to title insurance companies to speed-up title searches when properties are sold or mortgaged.
In a suit filed in Reno, Inter-County Title Company of Nevada was accused of stealing title plants owned by Founders Title Company of Nevada, First American Title Company of Nevada, and other title companies.
– George Boardman
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