Professional Documents
Culture Documents
LENOX FINANCIAL 1
MORTGAGE. LLC
d/b/a Lenox ~inancialMortgage 1
and JON SHIBLEY, 1
1
Plaintiffs,
" ,US,
vs.
Financial Mortgage ("Lenox Financial") and Mr. JON SHTBLEY ("Mr. Shibley"),
or collectively "Plaintiffs", and bring this federal civil action against Mr. ROB K.
BLAKE ("'Mr. Blake") and Ms. Terri Ewing ("'Ms. Ewing"), personally and
as follows:
INTRODUCTORY STATEMENT
headquartered in the State of Georgia. Over the past fifteen years, Lenox Financial
has grown into an industry leader licensed in over 36 states but has maintained its
CEO and resides in Fulton County, Georgia. As such, the Plaintiffs are all
known as "The Mortgage Insider" and sell the information acquired ftom these
is alleged that Defendants have made knowingly false and disparaging statements
about Lenox Financial and Mr. Shibley on this website and have engaged in a
scheme and conspiracy to disparage and discredit Plaintiffs for financial gain. It is
alleged that, in violation of the Lanham Act, the Defendants have embedded the
Plaintiffs' trademarked business name as invisible "meta tags" within their website
so that consumers, when searching for Lenox Financial, are drawn to Defendants'
website and the false and disparaging statements contained therein. Plaintiffs seek
2
preliminary and permanent injunctive relief against, and damages resulting from,
the unlawful acts and an unlawful plan by Defendants to malign, defame, and
discredit Plaintiffs. This Complaint seeks damages for unfair competition, false
damages for malicious injury to Plaintiffs' business reputation and for professional
maliciously seek to portray both Lenox Financial and Mr. Shibley as unethical and
dishonest in business dealings, which is utterly and flatly untrue, and for tortious
have violated a number of state statutes including the Georgia Deceptive Trade
Practices Act, the Georgia Fair Business Practices Act, and the Georgia False
I
Advertising Act and have maliciously sought to injure Plaintiffs by seeking to
obstruct and divert Lenox Financial's sales by use of this wrongful and unlawkl
scheme to disparage and discredit. Both Lenox Financial and Mr. Shibley have
been suffered most tangibly here in the State of Georgia where Lenox Financial is
corporation with its principal place of business located at 6 Piedmont Center, Suite
500, 3525 Piedmont Road, Atlanta, Georgia 30305. Lenox Financial maintains its
I
principal offices and houses its employees in Atlanta, Georgia and does not
Lenox Financial Mortgage, LLC commonly does business under the name
Mortgage Corp., which also did business under the name "Lenox Financial
Mortgage".
Fulton.
4.
Defendant Mr. Rob K. Blake is a resident of the State of Colorado. He may
80601.
Defendant Ms. Terri Ewing is a resident of the State of Colorado. She may
80601.
formed and organized under the laws of the State of Colorado. This is reasonably
believed to be the legal entity through which Defendants Blake and Ewing conduct
activities and business revenues derived from the web site known and referenced
as the "The Mortgage Insider", discussed below. The Mortgage Insider Media
LLC may be served by and through its registered agent Defendant Ewing.
This Court has subject matter jurisdiction principally under 28 U.S.C.
section 1332 (because all Defendants are citizens of states diverse from those of
interests and costs) but also under 28 U.S.C. section 1331 (because several of the
claims alleged herein arise under the law of the United States and present a federal
question) and under 15 U.S.C. sections 1125 (original jurisdiction over the Lanham
Act claims). This Court has jurisdiction over the state law claims noted herein
principally under 28 U.S.C. section 1332 but also under 28 U.S.C. section 1367
8.
This Court has personal jurisdiction over the Defendants because each of the
Defendants has, through its website and internet activity, activity which has been
factual allegations of this lawsuit (1) have transacted or have sought to transact
business in the State of Georgia through the selling of internet mortgage lead
involving Georgia property owners, (2) have committed tortious acts or omissions
in this state or have committed tortious injury in this state caused by acts or
omissions outside this state, and (3) have engaged in a persistent course of conduct
and has derived revenues from business transacted in the State of Georgia. This
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court has pendent personal jurisdiction over the Defendants as to the state law
contacts with the State of Georgia by and through internet marketing purposefully
wrongfully generated "leads", business, and profits for Defendants from Georgia
residents, such that the exercise of personal jurisdiction over the Defendants does
not offend due process or traditional notions of fair play and substantialjustice.
, FACTUAL BACKGROUND
11.
Lenox Financial is a successful mortgage brokering company headquartered
in Georgia that does business in 36 states. Lenox Financial has been in the
mortgage business since 1994. The Lenox Financial name was marked in May of
2005.
To provide some idea of the scope of its success, skill and expertise, since
only 2004, in only the last five (5) years, Lenox Financial has brokered
gross loan value. Lenox Financial has been in business for over ten (10) years.
Over the past ten years, Lenox Financial has spent millions of dollars
advertising its good name not only throughout the State of Georgia but also in
national lenders, including the leading national lenders Bank of America and Wells
Fargo. Before the collapse of the mortgage lending market, Lenox Financial was
approved with nearly every significant national lender and enjoyed a close working
8
relationship with such respected national lenders as Chase Manhattan Mortgage
and CitiMortgage.
15.
Mr. Jon Shibley is the President and CEO of Lenox Financial. Mr. Shibley
16.
for those who wished to refmance loans or purchase property but who did not wish
financed in a higher loan amount or as financed in a higher purchase price for the
'"Traditional" or "par price" mortgages are those whose rate is established by the daily fluctuation of the
mortgage and bond markets and which rate is the lowest possible on that day the loan is locked without
the customer having to "pay down" the rate with what is known in the industry as a "discount point" or
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and conspicuously disclosed this pricing differential to their customers as a choice
as compared with the traditional "full cost" mortgage product with a marginally
lower rate.
To ensure this option and choice is property presented on each and every
has implements procedures to ensure both options are presented clearly to each and
every cu~tomer.~
Financial is involved, this choice between the "traditional mortgage" with full
closings costs but amarginally lower rate and the "no closing cost" mortgage with
a marginally higher rate but with significant transactional costs savings is clearly
"discount fee". Although the rate is attractive, these products require the customer to pay "points" or
"origination fees", closing costs to the mortgage broker for his or her compensation, offen 1% ofthe loan
amount or more, as well as appraisal, lender, title or attorney fees, title insurance premiums, recording
fees and recording taxes, which all can amount to thousands of dollars in expense.
'In most cases, customers balance time in home, equity levels, project rate increases or decreases, and
closing costs previously invested before making a decision.
and repeatedly made to the cons~mer.~
The customer is given the informed option
of which product to chose, the traditional mortgage or the "no closing cost".
Because of its size, and its corresponding negotiating power with its lenders,
Lenox Financial has a decided competitive advantage on the pricing of "no cost"
products over smaller, competing mortgage brokers and can offer its customers "no
closing cost" mortgage products at rates that compare favorably with "traditional"
Financial accepts a fiduciary duty to its customers to operate with the highest
Lenox Financial enjoys a quality and valuable reputation with its customers
and has many customers who have used their services on numerous repeated
On the "no closing cost" product, LenoxFinancial is paid a yield spread premium by the lender, with
which Lenox is able to pay all the closing costs on behalf of the customer and sill make a reasonable
profit for its services. This is disclosed both on the Good Faith Estimate and on the HUD-I Closing
Statement on each and every transaction.
occasions. Lenox Financial also enjoys a quality and valuable reputation in the
greater community of Atlanta, Georgia and in the greater communities of the out of
To promote and grow its business, Lenox financial has been heavily
To protect its business name, on or about March 30,2004, Mr. Shibley filed
for trademark protection for the name Lenox Financial. A mark was issued for
"Lenox Financial Mortgage Corp." on or about may 3 la,2005 and for the "Lenox"
on or about February 19,2008. These marks serve to protect against the improper
use any part of the mark and serve to fully protect the name "Lenox Financial" in
Plaintiffs have not authorized any other individual or entity to make use of
26.
Defendants Mr. Blake and Ms. Ewing, own and operate a web site called
The Mortgage Insider. The URl, for this site is http://themortgapeinsider.net. This
website is referenced herein and below as "this or the Website", "the Defendants'
insider" who purports to have the "truth" and intimates he has inside information
28.
Financial and have never inquired of or spoken to Mr. Shibley about his company
Although it is unclear whether Mr. Blake or Ms. Ewing have any direct
interest in any competing mortgage company, which they may, it is clear that they
13
directly compete against Lenox Financial for mortgage customers and that they
seek to generate mortgage customer prospects or "leads" from those who visit this
Website.
"leads" generated from this Website, including leads generated from the State of
customers and "leads" through this Website for mortgage customers and
prospective mortgage customers living in and for loans to be originated in the State
of Georgia.
In addition, and more broadly, it is alleged that the Defendants compete with
both radio and internet mediums, a marketplace where credibility is of the utmost
importance.
On numerous occasions, Defendants, acting with malice and with the
malicious intent to discredit Lenox Financial and drive customers away from their
organization, have announced, written and published utterly false and disparaging
statements about Plaintiffs on this Website. These include the following (the
Lenox Management is&&b" to its loan officers and using the loan
.
Mortgage Advertisers Lie . . Especially about Closing Costs". Mr.
15
Blake, presumptive with the approval of Ms. Ewing, expressly says
closing costs" ... are simplv lying." This article expressly identifies
Lenox Financial web site and states "the lie continues." Later in the
this helps you separate the honest form the dishonest" -again clearly
published.
article published in the Atlanta Journal and Constitution and state "the
17
Advertisers Prey On Unsophisticated Borrowers"; "Home Mortgage
announce and publish these false, disparaging statements regarding both Plaintiffs
Georgia and in other states have read or otherwise been exposed to these false and.
reference to or otherwise create the wrongful and false impression that Plaintiff
Shibley in reference to his trade and profession and falsely accuse Mr. Shibley of
being or otherwise create the wrongful and false impression that Mr. Shibley is an
All these statements were made either knowing that they were false or were
trade and profession and with the malicious intent to profit off this denigration.
Website and its web based "mortgage shopping system" operated within the
and prospective customers away from Lenox Financial and into Defendants'
marked and trademarked business and trade name as "meta tags" within the
computer code in their Website. The meta tags are not visible to a typical
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computer user but cause search engines looking for "Lenox Financial" to list
as the main Lenox Financial web site referenced above. This "review" contains
wrongful efforts at residents and property owners in the State of Georgia and have
in fact derived profits from business dealings with residents and property owners in
It is expressly alleged that these false and disparaging statements have been
Georgia who are former customers or clients of Lenox Financial, current customers
21
or clients of Lenox Financial, or who are prospective customers or clients of Lenox
Financial, as well as by residents of Georgia who may simply desire to have more
information about Lenox Financial. It is further alleged that these false and
dealings. He has never knowingly made any false statement to a customer, has
never deceived any customer into selecting a "no closing cost" mortgage product,
has never authorized any loan officer to do so, nor has he ever tolerated any such
impression that Mr. Shibley is unethical in his business dealings are utterly and
unequivocally untrue.
each and every consumer. As a matter of corporate policy, the details of every
transaction are klly disclosed by each loan officer verbally, on every Good Faith
proprietary, state of the art technology to ensure that each loan officer has the most
It is alleged that every Georgia resident and every person who has read or
otherwise been exposed to these false, disparaging statements has been confused,
negatively impacted, and lead astray as to the true nature, characteristics and
qualities of the business practices and commercial activity of Lenox Financial and
these false, disparaging statements have chosen not to do business with Lenox
Financial, thereby depriving Lenox Financial of sales and revenues, and some have
Plaintiffs' good name and reputation has been tarnished and Plaintiffs' have been
profits from residents of and property owners in the State of Georgia as well as in
through 5 1 above.
The name Lenox Financial Mortgage is the subject of a valid and subsisting
trademark registration, U.S. Registration No. 2,957,239. This mark was registered
on May 3 1,2005. Although the full reading of the trademark is "Lenox Financial
and selves to protect variations of the entities operating with this name, including
February 19,2008. Likewise, this mark serves to protect the entities operating
Without permission, Defendants' have used, and continue to use, this mark
was intentional and was for the purpose of misleading and confusing consumers
and for the purpose of discrediting Lenox Financial and wrongfully diverting
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customers seeking information on Lenox Financial into Defendant's "mortgage
mortgage leads which are reasonably believed to have been sold to competing
mortgage companies.
it's owner, and it's operations, and in particular confused and mistaken with the
promoted by Defendants.
Defendant's use of Lenox Financial's registered marks and trademark as meta tags
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was undertaken by Defendants intentionally, maliciously and in bad faith.
fees.
61.
through 60 above.
In furtherance of their plan to promote and advertise their own services and
discredit Plaintiffs and drive internet traffic into their lead generator.
making these false and disparaging statements about Plaintiffs and, furfher, by
used to persuade customers and potential customers of Lenox Financial not to trust
or associate with LenoxFinancial and wrongfully entice them, instead, to trust and
associate with Defendants and utilize the "mortgage shopping system" promoted
on their Website.
Defendants' false and misleading descriptions and misrepresentations
enter into interstate commerce in the State of Georgia and this District, as well as
in other states, which has had a material effect on the purchasing decisions of
mortgage consumers in the State of Georgia and this District, as well as in other
and elsewhere upon Defendants' false, misleading and disparaging statements and
It is understood and believed that Plaintiffs have also been damaged because
they have lost sales, suffered a loss of goodwill, and have been required to spend
29
resources to address and counter these misstatements and false advertisements.
from false advertising and continuing its campaign to seek to profit from
70.
through 69 above.
Given the success and reach of Lenox Financial, in particular in the State of
Georgia and the Northern District, the trade name and mark "Lenox Financial"
may properly be considered a "famous mark" under the Lanham Act, 15 U.S.C.
section 1125(c)(2)(a).
30
The disparaging and defamatory statements noted herein serves to dilute by
tamishment the "famous mark" under the Lanham Act 15 U.S.C. section
1125(c)(2)(c) and serve to erode and lessen the power of the famous mark to
provide assurances to customers of the quality and integrity they should expect in
Due to the unlawful acts of Defendants, there has been actual injury to the
Plaintiffs are entitled to such injunctive relief and, due to the fact that
75.
Plaintiffs incorporate and re-allege as if fully set forth herein paragraphs 1
through 74 above.
common law interests and intellectual property rights in their business and trade
business name and trade names in commerce as meta tags in Defendants' Website,
and in bad faith. Therefore, Plaintiffs are entitled to recover, in addition to actual
through 78 above.
Defendants' business and with the intent to secure a commercial advantage and
published false statements and charges concerning Mr. Shibley in reference to his
trade, office and profession, statements and charges calculated to injure him
therein.
These false statements noted herein and potentially others have been made
and published and, up to the date and time of the fining of this Complaint, continue
calculated to injure.
These false statements concerning Plaintiffs made and published by
Defendants were and are defamatory as to Mr. Shibley, were and are directly
business, and further cast Plaintiffs in a negative and false light to their customers
and others.
office or profession, under O.C.G.A. section 51-5-4, damage is inferred and proof
professional reputation and has suffered damages relative to his interest in Lenox
Financial.
85.
86.
through 85 above.
transactions, with these customers and clients with whom Plaintiffs have done
business.
Plaintiffs fudher have contact with thousands of prospective customers and
clients who are reached by Plaintiffs' advertising in Georgia and various other
states, who search for Lenox Financial on Google or various other search engines,
who visit Plaintiffs' web site, and who contact and consider contacting Lenox
Financial here in Georgia for information and assistance with potential business
transactions.
Acting improperly and without privilege, and purposely and with malice
with the intent to injure, the Defendants have wrongfully interfered with these
customers, both in the State of Georgia and other states, not to enter into or
disregard of Plaintiffs' rights, as well as in disregard of the harm that they have
caused and are foreseeably likely to cause Plaintiffs, so that punitive damages
should be imposed.
94.
through 93 above.
Defendants, acting in concert with each other and other persons and/or
entities, agreed to take collective action to interfere with Plaintiffs' ongoing and
with each other and other persons and/or entities, and acting improperly and
without privilege, and purposely and with malice with intent to injure, have taken
overt and wrongful acts to interfere with, and have in fact interfere with, Plaintiffs'
97.
marketplace.
98.
Plaintiffs.
99.
been carried out in a willful, wanton, malicious and reckless disregard of Plaintiffs'
100.
through 99 above.
101.
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Defendants made either knowing and intentional, or recklessly false
business practices, and Defendants' wrongful conduct described above has been
made and undertaken with the knowledge of Plaintiffs' rights and interests and
with the malicious intent to discredit Plaintiffs and with the calculated intent to
drive customers who search for Lenox Financial online through Google or other
search engines away from Lenox Financial and into Defendants' "mortgage
shopping system".
102.
were made with a reckless disregard for their truth, were intended to be relied
upon, and were made without reasonable justification, and have been relied upon
103.
goodwill, loss of revenue from customers and prospective customers, and the costs
104.
39
Defendants' conduct has been motivated by spite, has been willful, wanton
and malicious has been conducted in reckless disregard of Plaintiffs' rights and
interests, as well as for the harm they have caused and were foreseeably likely to
cause Plaintiffs and, therefore, punitive damages should be imposed to deter such
Defendants, acting in concert with each other and potentially other persons
andlor entities, agreed to take collective actions to malign, disparage and discredit
Plaintiffs and to drive internet traffic and current and prospective customers of
Lenox Financial away from Lenox Financial and into Defendants' "mortgage
shopping system", a lead and profit generator for Defendants, contained in their
Website.
In furtherance of their conspiracy and sLheme, Defendants, acting in concert
with each other and other persons andlor entities, have taken overt and wrongful
acts intended to malign, disparage and discredit Plaintiffs and to drive internet
traffic and current and prospective customers of Lenox Financial away from Lenox
Financial and into Defendants' "mortgage shopping system", a lead and profit
108.
mortgage prospects who conduct internet research internet from Lenox Financial
109.
injury to Plaintiffs.
110.
wrongfully therefrom has been carried out in a willful, wanton, malicious and
reckless disregard of Plaintiffs' rights and interests, such that punitive damages
should be imposed.
COUNT X: VIOLATION OF THE GEORGIA UNIFORM DECEPTIVE TRADE
PRACTICES ACT
111.
112.
through the wrongful and false statements noted above, Defendants have created a
113.
372(a)(8), among other provisions of the Uniform Deceptive Trade Practices Act.
114.
11s.
Plaintiffs are also entitled to recover their attorney's fees and costs incurred
in connection with this action and to any and all damages authorized by this
statute.
117,
through the wrongful and false statements noted above, Defendants have created a
118.
393(b)(8), among other provisions of the Georgia Fair Business Practices Act of
1975.
Defendants have further violated the provisions of O.C.G.A. section 10-1-
393.5 by engaging in internet activities that operate as a fraud and deceit upon
Plaintiffs and upon those customers, clients, and members of the general public
representations.
120.
limitation, injunctive relief, actual damages, treble damages, and attorney's fees.
121.
122.
reckless disregard as to their accuracy and integrity, that directly relate to the
123.
Defendants' actions constitute false advertising in violation of O.C.G.A.
section 10-1-421.
124.
125.
Plaintiffs are also entitled to recover their attorney's fees and costs incurred
126.
profits, this Honorable Court should award temporary, preliminary and permanent
injunctive relief against Defendants and, in addition, should order the Defendants
127.
129.
misleading statements were false or have made these with a reckless disregard for
their accuracy and integrity, intended for the above described statement and actions
to result in harm to the business and property interest of Plaintiffs, or should have
recognized that should reckless statements and actions would have this result.
130.
have suffered and continue to suffer damages and Defendants have evidently
cause harm to Plaintiffs unless enjoined. Hence, in addition to damages and profits
amounts to willful misconduct, malice, wantonness, and that entire want of care
punish Defendants.
134.
That Defendants have engaged in tortious conduct, have acted in bad faith,
have forced this action, and have forced Plaintiffs to incur attorney's fees and costs
section 9-15-14.
136.
alleges and re-asserts the factual assertions and averments made therein expressly
omitting, however, any reference to any knowing misstatement, bad faith motive,
malicious intent or reckless disregard on behalf of the Defendants, which has been
In the second alternative, Plaintiffs plead that, if said false statements and
alternative, then they were made with a negligent disregard as to their accuracy.
Defendants have breached this duty by making the false statements noted
herein in a careless and negligent manner without first properly investigating the
caused Plaintiffs significant damages, and the Defendants are still liable to
Plaintiffs for all damages derived from for these false statements, which damages
Defendants did not act knowingly, in bad faith, or in reckless disregard of the
RELIEF REOUESTED
WHEREFORE, Plaintiffs humbly and respectfidly request the following
relief:
(a) pursuant to Rule 38, a trial by jury on all issues and matters upon which a
from:
publications;
each and every court of the Complaint, as applicable, and awarding all actual,
consequential and/or compensatory damages as proved by Plaintiffs at trial in an
exceed $75,000.00;
(f) awarding all costs of this action including reasonable attorney's fees;
(g) ordering an accounting of any and all profits derived from any wronghl
diversion of internet traffic away from Plaintiffs' website and into Defendants'
(h) grant such other and further relief as this Honorable Court deems
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. d
Respectfu y Submitted,
k L d 4
Russell H. Hivve,- 111
A -