The Bexar County Courthouse.
The 4th Court of Appeals is located at the Bexar County Courthouse. Credit: Bonnie Arbittier / San Antonio Report

The 4th Court of Appeals in San Antonio has overturned a $706 million verdict, reversing a jury’s 2018 decision on local tech firm HouseCanary Inc.’s  claims of misappropriation of trade secrets and fraud against Amrock Inc.  

The San Antonio trial court had ruled that HouseCanary, a real estate valuations company whose analytics arm is based in San Antonio, should be paid $706.2 million after Amrock, a Quicken Loans affiliate, misappropriated its trade secrets and breached a contract with the firm. Amrock was previously known as Title Source Inc. but rebranded in 2018.

In a ruling Wednesday, the state appellate court sent the matter back to state district court for a new trial.

Amrock sued HouseCanary in a Bexar County court in 2016, claiming the startup defrauded Amrock by misrepresenting its product, according to court records. HouseCanary then countersued, claiming Amrock sued as a way to get out of paying contract fees for using HouseCanary’s real-estate data, analytics, and valuation technology.

In its original lawsuit, Amrock claimed that HouseCanary was desperate for venture capital funding and entered into a contract with Amrock based on products that did not exist after persuading the company it would provide a “one-stop-shop for property appraisal software, data, and analytic tools,” according to the petition.

Amrock never received working software from HouseCanary, said Amrock CEO Jeff Eisenshtadt in the company’s petition.

In its countersuit, HouseCanary’s attorneys said Amrock misappropriated the startup’s trade secrets, a violation of multiple nondisclosure agreements. Amrock and its family of companies aimed to use HouseCanary’s technology and data to develop its own competing product, the countersuit claimed.

Amrock asked for a new trial in 2019 but was denied by state District Judge David A. Canales, who upheld the trial court jury’s decision of $245 million in actual damages and $470.8 million in punitive damages to HouseCanary, and added $29 million in prejudgment interest and $4.5 million in attorney’s fees, according to court documents. 

The appeals court affirmed the trial court’s “take-nothing judgment on [Amrock]’s breach of contract claim” and reversed the trial court’s “judgment on HouseCanary’s the Texas Uniform Trade Secrets Act and fraud claims,” remanding those claims for a new trial.

Details for the new trial have not yet been set. 

Lindsey Carnett covers the environment, science and utilities for the San Antonio Report. A native San Antonian, she graduated from Texas A&M University in 2016 with a degree in telecommunication media...