Dueling cases involving Cornerstone Capital Bank and a former executive have been dismissed prior to trial, with both sides claiming victory.

Each party has a different interpretation of what happened in the legal matter involving former Cornerstone Home Lending executive Manuel Valdes.

A former independent mortgage banker, Cornerstone acquired a Texas state chartered bank in late 2022.

Why Cornerstone sued Valdes

It filed its suit against Valdes in January 2023 after firing him for alleged breaches of fiduciary duty.

The purpose of the initial lawsuit by Cornerstone was in regards to enforcing Valdes’ employment agreement, specifically that the terms were still in effect, said Adam Laird, vice chairman of the company, in an interview.

A countersuit by Valdes, which alleged his termination was not for cause and also made claims of discrimination, was filed that May. Besides the bank, Adam Laird was a named defendant in the matter, along with his father, Cornerstone Chairman Marc Laird.

“In the end, what the resolution of the case was, is that Manuel walked away from all of his claims that his termination was not proper, that we discriminated against him, that he was retaliated against, he walked away from all of that and took nothing,” Laird said. “That includes the fact that he would have been entitled to roughly $10 million in severance payments plus attorneys’ fees had his termination not been proper.”

What claims did Manuel Valdes make

Earlier this year, Valdes’ wife, Andrina, another former Cornerstone executive, purchased a 75% interest in Republic State Mortgage.

A press release from the Valdes side said Manuel was fired nine days after Andrina’s 60-day resignation notice expired, for her it triggered an 18-month non-compete clause. During the interview, Adam Laird said the non-compete, along with a non-solicit clause, was part of the contract negotiations with both Valdes’ and their legal counsel as executives of the company. Under its terms, it only restricted them from taking a job in areas where Cornerstone operates.

Laird also clarified that Cornerstone does not have non-competes for its loan officers.

Under the terms of the agreement, all claims will be dismissed by both sides, the Valdes release said. Neither side admitted wrongdoing or liability, no money was exchanged, and each will bear its own legal costs. This release said the bank elected to dismiss the suit after a ruling against it regarding a disposition by another former employee.

Their release said the pair are currently running Republic State Mortgage, which also does business as Alta Home Lending, along with the other owner, Paulina McGrath, who is president.

“When faced with false claims, discrimination, and retaliation, I made the decision to fight — not because it was easy, but because it was right,” said Manuel Valdes in the release. “It was deeply important to me to defend my integrity and stand up for others who may not have the same resources or platform. While this chapter has been painful, I am grateful we can finally move forward.”

What’s next now that the lawsuits are over

Adam Laird struck a conciliatory tone about the relationship with the Valdes’ going forward.

“In the end, we’re all operating in the same industry. My hope is that going forward, we all continue to make a positive difference in people’s lives and how we do our work and how we operate,” Laird said.

He added it was upsetting seeing some of the spins on the case being made on blogs and in social media. Both Valdes were important parts of the Cornerstone team for over 20 years and Laird was disappointed with how the situation was playing out in those forums.