Banking & Finance

Judge Delays Ruling on Huntington Bank’s Lawsuit Against Home Savings

YOUNGSTOWN, Ohio – U.S. District Judge Benita Y. Pearson has postponed until at least Nov. 8 her decision in the lawsuit Huntington National Bank filed Oct. 24 against Home Savings Bank, which seeks a temporary restraining order, so the banks can resolve their differences with the aid of a third party.

Huntington has accused three of its former commercial lending officers who joined Home Savings in late September of taking with them “Huntington’s confidential information, proprietary information or trade secrets,” says the suit, and “soliciting additional employees to leave Huntington and begin working with or for Home Savings Bank.”

The lenders are Joshua Toot, senior vice president of commercial banking; and Kevin Dougherty and David Howard, vice presidents and commercial relationship managers.

Pearson met with counsel from the banks Oct. 25 in her chambers and determined, “As a result of the conference, [she] is holding any ruling or further hearing on the TRO in abeyance to allow the [banks] to effectuate the agreement [they] reached during the conference.”

In her order, Pearson wrote that the banks agreed that Toot, Dougherty and Howard “will not solicit current employees of Huntington to leave their employment and that a writing to that effect will be agreed upon and signed by” Toot, Dougherty and Howard by Wednesday at the latest.

In addition, the banks “will hire, at their cost, a third-party vendor to review all computers and/or electronic devices” the three bankers used “from April 14 until Oct. 25 to determine what, if any, Huntington information is contained in their computers and that the review will be completed by Nov. 8.”

Should the third party determine that Toot, Dougherty or Howard has such information in their computers, “it will be provided to Huntington and destroyed by the third-party vendor.”

Huntington and Home Savings, the judge ordered, will notify her by Nov. 9 of the results of their efforts and whether Huntington’s motion for a TRO should proceed.

In a statement, a spokeswoman for Home Savings said her bank “is committed to complying with the law and any contractual obligations its employees may have to former employers and disputes that it engaged in any unfair competition against Huntington.”

In its motion seeking the TRO, the attorney for Huntington, Kerin Lyn Kaminski of Giffen & Kaminski LLC of Cleveland, stated that when Toot left Huntington he had a restrictive covenant that forbade him from soliciting the customers he served when he joined Home Savings.

All three took “proprietary and confidential customer information” from Huntington and “attempted to hide” this misappropriation, the complaint states.

“When confronted and asked to destroy what was taken, [they] refused to do so,” according to the lawsuit. “Specifically, the defendants, while still employed by Huntington, sent themselves, from Huntington’s email system to their personal email accounts, documents and spreadsheets containing customer information specific and other confidential or proprietary information. Huntington locate[d] some of these documents.”

Huntington wrote to Toot, Dougherty and Howard and Home Savings Bank, asking that the contested information be returned, that no copies be made and that Home Savings certify that the documents and information were destroyed.

The general counsel of Home Savings, Jude Nohra, informed Huntington that the bank directed the three to comply and that “he would provide Huntington with a full listing of anything taken from [that bank] and such documents would be destroyed.”

Huntington took Nohra at his word, the complaint continues, and delayed filing suit. More than two weeks later, according to the motion for a TRO, Nohra provided “a list of documents taken from Huntington, a written assurance there was no ongoing violation by the [lending officers] and that all confidential or proprietary documents were destroyed.”

That list was incomplete, Huntington contends, and “demonstrated an ongoing effort to hide [Toot, Dougherty and Howard’s] wrongdoing.

“Given that the defendants provided such blatantly false information and the active hiding of the documents [Huntington is aware of] it is impossible to know what else was taken that Huntington has been unable to locate.”

Huntington refrained from identifying such documents, according to the complaint, because should it need to do, it will seek Pearson’s permission to file them under seal.

The lawsuit seeks compensatory and punitive damages of more than $600,000.

Published by The Business Journal, Youngstown, Ohio.