Texas justices overturn $700 million verdict against Amrock

By David Yates

SAN ANTONIO – One of the largest verdicts in Texas History has been axed. On June 3, the Texas Fourth Court of Appeals overturned a $706 judgment in the Title Source v. HouseCanary case.

Amrock, formerly Title Source, is applauding the ruling, which reversed the trial court’s decision and ordered a new trial in its case against HouseCanary.

Under Texas law, the jury’s decision could not stand if it could have been based on invalid theories. Known as a Casteel error, it requires the appellate court to order a new trial on both liability and damages.

In rendering its decision, the Fourth Court found that it is impossible to determine from the jury charge whether the jury made its ruling based on invalid legal theories.

Specifically, the court determined invalid theories may have been considered in the jury’s finding of Amrock’s misappropriation of trade secrets under the Texas Uniform Trade Secrets Act and in HouseCanary’s allegations of fraud.

At oral argument, HouseCanary conceded that there was no evidence to support each theory included in the “improper means” definition that was submitted to the jury for its misappropriation claims.

“[W]e are reasonably certain that the jury was significantly influenced by the erroneous inclusion of [certain portions of the jury] instruction” wrote Justice Beth Watkins.

Pending any request for rehearing or an appeal to the Texas Supreme Court, the case will be sent back to the trial court to be retried.

“We’re pleased the justices agreed that there must be a new trial,” said Catherine Stone, of Langley & Banack and chief appellate litigator for Amrock. “We are confident that given all of the evidence – including the whistleblower testimony that came out in a post-trial hearing – Amrock will be vindicated and a new jury will conclude that Amrock was never given, and never used, any of HouseCanary’s purported trade secrets.”

Amrock had contracted HouseCanary, a real estate analytics firm, to develop an automated valuation model mobile application for appraisers to use on iPads in the field.

However, after HouseCanary failed to produce the application they were contracted to build, Amrock sued for breach of contract and developed its own mobile AVM application.

HouseCanary countersued in response, alleging Amrock misappropriated their purported trade secrets and committed fraud, among other claims.