Monday,
January 17, 2005
Former East-West employee files lawsuit
By Kathleen McLaughlin The Eagle-Tribune
Staff Writer
A former employee of East-West Mortgage founder John F.
Gallagher is looking for a piece of the fired executive's
claim against Commerce Bank of Worcester, which owns the
$2.4 billion mortgage company headquartered on the North
Shore.
Edward Williams of Beverly filed suit Wednesday
in Essex County Superior Court against Gallagher and the
bank, saying that Williams is the founder of an associated
real estate listings Web site, ISoldMyHouse.com. The for-sale-by-owner
site generates leads for the mortgage company.
Williams is seeking compensation for a 25
percent stake in the site, which Gallagher sold along with
East-West to Commerce Bank & Trust in 2000 for $40 million,
according to the suit.
The lawsuit claims ISoldMyHouse.com is worth $8 million,
so Williams would be entitled to $2 million. Williams also
claims Gallagher promised him $100 for every purchase loan
written by East-West that originated from ISoldMyHouse.com.
Once the Web site began to charge for listings, Williams
said he was promised 12 percent of those fees.
Neither East-West Mortgage, nor Commerce
Bank & Trust officials could be reached for comment
late Friday.
Williams says Gallagher promised him in July
2002 that he would receive a cut of ISoldMyHouse.com if
he ever sold the company. The Web site had already been
sold, but Williams said he didn't know that.
"In front of many witnesses, he said,
'Yes, I sold East-West, but ISoldMyHouse is mine,"
Williams said in an interview last night.
"He used to brag about it all the time:
'That's mine and Ed's baby,'" Williams said.
Reached at his home in Manchester-by-the-Sea Friday, Gallagher
said the Web site was never a profit center. He also denied
all of Williams' claims, including that Williams was the
founder and controller of the Web site.
"It's a waste of paper. It's totally
without merit. It's an abuse of the judicial system,"
Gallagher said of the lawsuit.
According to the lawsuit, Williams was hired
by East-West in April 2000, and in addition to his regular
duties began to create the Web site, writing its source
code. The suit says Williams is an "experienced"
programmer and Web publisher.
Williams, 50, explained last night that he's
self-taught. He owned a shop, New Source Computers, on Central
Street in Peabody until about 1994 and also worked for a
Swampscott mortgage company called Home Financing.
Williams went to work for East-West as a
loan officer, but he said Gallagher learned of his background
and asked him to jump-start an ineffective Web site.
"I didn't utilize anything but the domain
name," Williams said. He claims that he turned the
site from one that received 10 hits a day to one getting
3 million to 5 million hits a day and raised the ire of
the Realtor community.
Williams said he made a mistake in not getting
Gallagher's promise in writing. "He kept putting me
off, throwing me money and new cars. I didn't see any reason
he wouldn't take care of me."
Williams was fired from ISoldMyHouse.com
on Jan. 3, but he said he hired his lawyer, Ian Crawford
of Todd & Weld in Boston, before that date. Williams
said the bank cited market conditions in his firing, which
coincided with other layoffs at East-West.
"I was bringing in millions and millions
of dollars," Williams said.
Gallagher, who is suing Commerce Bank over
his own contract, called Williams a "straw boss"
who was aided by other programmers. Gallagher said he had
Bridge Media, a North Shore Web developer, create the Web
site "at least two years" before Williams was
hired at East-West.
Gallagher did not remember the exact year
that ISoldMyHouse.com was created, but records at Network
Solutions show that the site was created March 23, 1999.
http://www.eagletribune.com/news/stories/20050117/BU_001.htm
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