Wednesday, October 31, 2012

Fidelity National Title Insurance Company's Verified Answer to Third Amended Complaint

Th:e Response says in large part that the Defendant lacks sufficient information or belief to permit it to admit or deny the allegations but a few specific items are puzzling.  Beginning below are some of the examples:

item 1 "Defendant denies that it acted in as an escrow holder in this case".

The Preliminary Title Report created in Napa, California lists the names of both the Escrow Officer and Title Officer and the Order Number.


On the Fidelity National Title Napa County home page clearly identifies on it's About Us page that there is an association between Fidelity National Title Insurance Company, Fidelity National Title Company and Fidelity National Title Group.


And the Response continues along this vein:

Item 10 "Defendant also denies that the title office which researched the subject property was an employee of the Defendant."
Item 12 "Defendant denies that it issued the first preliminary title report.  Defendant denies that it employs escrow officers and title officers."
Item 13 "Defendant denies that it employs escrow officers."
Item 15 "Defendant denies it was the escrow agent and title agent for Plaintiff on or about October 8, 2004."
Item 16 "Defendant denies that it employs escrow officers."


Per the Home Page of Fidelity National Title Insurance Company Website it states "Fidelity National Title Insurance Company - Through its nationwide network of direct operations and agents, FNTIC provides title insurance, underwriting, escrow and closing services to residential, commercial and industrial clients, lenders, developers, attorneys, real estate professionals and consumers.."


In pulling up these pages I believe I just figured this out.  The corporate relationship between Fidelity National Financial, Fidelity National Title Company and Fidelity National Title Insurance Company must be such that the title officers who research the title for the title insurance company are only employees of the the title company.  Yet the HTML code for their website states:


The HTML code for the website for Fidelity National Title Insurance Company states, "fntic.com includes the history of Fidelity National Title Insurance Company, description of services and consumer information.  This title company offers escrow and settlement services, appraisals, and title insurance."

Very interesting.

The Amended Complaint against Fidelity National Title Insurance Company

The Third Amended Complaint May consisted of a summary of what happened and then the Causes of Action which were as follows:

  • Bad Faith Breach of Contact
  • Breach of Good Faith and Fair Dealing
  • Unfair Business Practices, California Business & Professions Code 17200
At about the same time I was served with a Request for Documents of which I produced what seems like volumes - about 6" - and for a deposition.  After approximately three hours at the deposition I managed to get through about a third of the story.  I felt that for the first time since the claim had been filed on my behalf that someone from Fidelity National Title Insurance Company was actually listening.

Unfortunately at the first of June I received Fidelity National Title Insurance Company's Verified Answer to Third Amended Complaint and my confidence in this getting handled easily ended.

Writing the Complaint against Fidelity National Title Insurance Company


It took a surprisingly long time to write up the sequence of events and get the demurrers back from Fidelity National Title Insurance Company's attorney.  I felt like I held myself under a microscope to be as factual and accurate as possible in everything that written.  At the same time though I noticed that some of the things the attorney was writing did not make sense to me.  For example, in response to our making a statement that I had met with the Title Department at the Fidelity National Title Insurance Company Office in Napa.  Twice in the demurrer the Fidelity attorney wrote:


As I did not understand this I first went to www.fntic.com:


And then to Google Earth (I was going to drive to Napa and take a photo):





Communicating with Fidelity National Title Insurance Company

In an effort to handle the claim with Fidelity National Title Insurance Company I wrote dozens of pages of emails, responses to the two appraisals and provided comparable properties and other quantitative data supporting the fact that the value of the lost easement had caused a diminution in value to the property.

Indeed the property had been placed on the market prior to the discovery of the lost ingress/egress easement  and in response to the loss of the residential easement leaving just a deeded easement through a commercial and manufacturing property, we dropped the property approximately $750,000 over the course of about 8 months.  Even with these large reductions in price the objection to the commercial/manufacturing entrance could not be overcome.

With all of the communication that I sent to the different claims counsels, I could not get an answer to the question, have you read what I wrote?  Finally in frustration I turned to an acquaintance to begin taking legal action.

About Fidelity National Title Insurance Company

On November 21, 2009 I also copied the following from www.fntic.com - again the portions in red and bold are my emphasis:


"ABOUT US
With origins that can be traced back 150 years, Fidelity National Title Insurance Company, through its underwriting subsidiaries, is one of the nation's premier real estate service companies, providing title insurance and other real estate-related products and services.
Fidelity employees are committed to providing our customers with a level of satisfaction that is unparalleled in the title insurance industry. Based on our experience and expertise, we are confident that you'll appreciate the Fidelity Difference.

THE FIDELITY COMMITMENT
At Fidelity, commitment is not just a word--it's a conviction. We take pride in our desire to serve our customers to the best of our ability. The quality of Fidelity's customer service and the level of employee loyalty and commitment are enhanced by our employee stock ownership. Stock ownership serves as a motivational force for Fidelity employees who recognize the Company's success is dependent upon their efforts and contributions.

Fidelity employees uphold the six corporate precepts upon which the Company was founded:
·  Bias For Action
·  Autonomy and Entrepreneurship
·  Employee Ownership
·  Minimal Bureaucracy
·  Close Customer Relationships
·  Highest Standard of Conduct"


The part of this statement I do not understand is that the company has employee stock ownership and this "stock ownership serves as a motivational force for Fidelity employees who recognize the Company's success is dependent upon their efforts and contributions."  I do not understand their definition of success.  Would the company's success be measured in the profit and the payment of stock dividends to the stock holders (employees)?  Or would success be measured by customer (the insured) satisfaction by the payment of insurance claims?  This is confusing as it seems that the success of the company if measured by profits is in conflict with the payment of insurance claims to the insured which would reduce the profitability of the company.

My Claim with Fidelity National Title Insurance Company is Worth Nothing

I admit that I was not in agreement that the loss of a mile long easement to an 80 acre parcel in the Napa Valley was worth nothing so I turned to the Fidelity National Title Insurance Company website.  The following was copied from www.fntic.com on November 21, 2009 (note: the lines that are bold and in red I emphasized before I sent this to my claims counsel in Omaha):


"WHAT IS TITLE INSURANCE?

A Word About Real Estate
Real estate has traditionally been a family's most valuable asset. It is a form of wealth that is protected by many laws. These laws have been enacted to protect one's ownership of real estate and the improvements located on the land. The owner, the owner's family, and the owner's heirs have rights or claims in and to the property that you are buying. Those who may have an interest in or lien upon the property could be governmental bodies, contractors, lenders, judgment creditors, the Internal Revenue Service, or various other individuals or corporations. The real estate may be sold to you without the knowledge of the party having a right or claim in and to the property. In addition, you may purchase the real estate without having any knowledge of these rights or claims. In either event, these rights or claims remain attached to the title to the property that you are buying until they are extinguished.
The Past Can Determine Your Future
Generally, a person thinks of insurance in terms of the payment of future loss due to the occurrence of some future event. For instance, a party obtains automobile insurance in order to pay for future loss occasioned by a future "fender bender" or for the future theft of the car.
Title insurance is a unique form of insurance. It provides coverage for future claims or future losses due to title defects which are created by some past event (i.e., event prior to the acquisition of the property.) These risks are far less obvious than those protected against by automobile insurance, but can be just as devastating. The following information will answer some commonly asked questions about title insurance.
Will You Get Clear Title?
It is of utmost importance that you receive clear title to the property when you purchase real estate. In order to do so, you must first be informed of any existing rights or claims that may, in the future, threaten your title and possession to the property. Title insurance provides you with this twofold protection.
How Do You Find Out What Claims Exist?
In order to determine the status of title, Fidelity National Title conducts a diligent search of the public records for those documents associated with the property. Fidelity National Title then examines those recorded documents in order to determine if there are any rights or claims that may have an impact upon the title to the property.
The title search may reveal the existence of recorded defects, liens or encumbrances upon the title such as unpaid taxes, unsatisfied mortgages, judgments and tax liens against the current or past owners, easements, restrictions and court actions. These recorded defects, liens and encumbrances are reported to you prior to your purchase of the property. Once reported, these matters can be accepted, resolved or extinguished prior to the closing of the transaction. In addition, you are protected against any recorded defects, liens or encumbrances upon the title that are unreported to you and which are within the coverage of the particular policy issued in the transaction. This is the first benefit you receive from title insurance.
What About Undiscovered Claims?
The title to the property that you have purchased could be seriously threatened or lost completely by hazards which are considered "hidden risks." "Hidden Risks" are those matters, rights or claims that are not shown by the public records and, therefore, are not discoverable by a search and examination of those public records. Matters such as forgery, incompetency or incapacity of the parties, fraudulent impersonation, and unknown errors in the records are examples of "hidden risks" which could provide a basis for a claim after you have purchased the property. In order to protect you against this possibility, Fidelity National Title provides insurance coverage for such claims. This is the second benefit you receive from title insurance.
How Does a Title Insurance Policy Protect Against All These Claims?
If a claim is made against your insured title, Fidelity National Title Insurance Company protects you by: (1) Defending your title, in court if necessary, at no cost to you, and (2) Bearing the cost of settling the case, if it proves valid, in order to protect your title and maintain your possession of your property.
Title Insurance Protects Your Asset
Title insurance gives you the assurance that possible clouds on title to the property you are purchasing - which can be discovered from the public records - have been called to your attention that such defects can be corrected before you buy.
Additionally, it is insurance that if any undiscovered claims covered by your policy arises out of the past to threaten your ownership of real estate, it will be disposed of, or you will be reimbursed exactly as your title insurance policy provides.
Only One Premium
Unlike other forms of insurance, the original premium is your only cost as long as you or your heirs own the property. There are no annual payments to keep your Owner's Title Insurance Policy in force.

We Hope You Never Have A Title Claim
Americans have the future in mind when they buy a house, and they purchase homeowner’s insurance to help protect that future. But with home ownership comes the need to protect the property against the past, as well as the future.
Title insurance protects a policyholder against challenges to rightful ownership of real property, challenges that arise from circumstances of past ownerships. Each successive owner brings the possibility of title challenges to the property.
When you purchase real property, rely on Fidelity National Title to protect your interests. You’ll be insured by a company backed by more than 150 years of successful title operations.

Rely On Fidelity National Title To Protect Your Investment
Every owner, purchaser and beneficiary, whether by a deed or contract, should have an insured title. The entire investment depends upon the quality of title. If you are buying real estate mortgages, you are paying for a good title and you should see that you have one. If either fire insurance or title insurance is omitted, your security is not complete.
Our title policy protects you against unforeseen defects in title that an abstract or the public records do not show and cannot show…nor any attorney’s opinion includes.
Whether this is your first or fiftieth real estate investment, ask your real estate agent or broker to specify Fidelity National Title during your transaction."

Saturday, October 27, 2012

Fourth and Fifth and Sixth Claims Counsel

In August 2009 I received a letter from my fourth claims counsel from Fidelity National Title Insurance Company responding to my Request for Assistance to the State of California Department of Insurance.  After a long conversation the new claims counsel agreed that the appraiser should have done a diminution-in-value rather than a cost-to-cure valuation and a new appraisal was ordered.

In mid-November 2009 the fourth claims counsel sent me an almost identical copy of what I felt to be the original misleading and erroneous appraisal.  The appraiser from Boise, Idaho re-evaluated the lost easement, without citing one property in the area with an entrance through a commercial property, and declared that the diminution-in-value was zero dollars ($0) for the loss of an almost mile long easement through private residential property.

In response to a Reconsideration Request, the fifth claims counsel wrote that the matter was concluded and closed but a few days later Fidelity National Title Insurance Company's Manager West Region wrote, "If you would like to provide us with an appraisal from a certified appraiser we would be more than willing to review it."

Failure to sell the Property


Over the course of this same year my real estate agent and I continued to attempt to sell the property but now the entrance to the property that went solely down a wooded lane and past vineyards to the property was no longer available.  The remaining entrance was through a commercial winery with a tasting room and a manufacturing facility.  The winery had recently been sold and the new owners were in the process of determining how the new facility would be developed.

This commercial entrance with the traffic and noise generated became a major deterrent in the sale of the property in spite of our dropping the price by hundreds of thousands of dollars.  While other comparable properties with similar residential entrances to the lost easement sold at values per acre more than our original list price of $1,295,000, this property still did not sell when the list price was dropped by $750,000 and in late July 2009 I allowed it to be foreclosed on for $499,000 making its value per acre a mere fraction of neighboring and comparable properties that did not have an entrance through a commercial property.

From Chicago, Illinois to Omaha, Nebraska offices of Fidelity National Title Insurance Company

Apparently the Chicago office closed.  At the end of January I reached the original claims counsel in Walnut Creek, California who told me I was assigned to my third claims counsel in Omaha, Nebraska.  When I reached the new claims counsel, he said that he was inundated with work from the closing of the Chicago office but he asked for the names of local appraisers which I provided to him.

At the beginning of March 2009, Fidelity National Title Insurance Company hired an appraiser not located in   Napa County in California but in Boise, Idaho.  The appraiser determined that perfecting a prescriptive easement to the property with an entrance miles from the original easement to Cavedale Road in Sonoma County was the factor for determining a "cost to cure" the original lost easement to Mount Veeder Road in Napa County.

I disagreed in a lengthy response to this substitution and also cited what I believed to be many inconsistencies and errors in the appraisal and comparable properties and provided substantial data, information on comparable properties and other information for consideration.

Towards the end of June 2009 the appraiser responded with a letter containing again what I thought was more false and misleading statements about the property and a statement about the tonnage of red varietal grapes in 2006.

I again disagreed in writing with the appraisers statements.

In July 2009, Fidelity National Title Insurance Company sent a check for the purchase of the prescriptive easement amounting to $3000 for the purchase and $10,500 for the legal fees associated with its purchase.  Six years earlier the owner of that property had declined to sell the easement for 20 times that amount.  I disagreed with this payment but was told by claims counsel, "You may cash this check without impacting your future claims."

The claims counsel also wrote, "Even though the rights to Parcels 2 - 5 are as set forth in Schedule A of the Policy are excepted from insurance against loss or coverage under Schedule B, the Company in good faith has treated this matter as if it is a covered loss."  But per Part One of Schedule B, number 3 "[e]asements which are not shown by the public records" are excepted from coverage.  Prior to purchasing the property I met with the title officer in Napa, California and was provided copies of the public records.

From Walnut Creek, California to Chicago, Illinois offices of Fidelity National Title Insurance Company




Skip forward to early 2008 and four years of mortgage payments, my life had changed and I needed to sell the property.  The property was listed for sale in June 2008 and the neighbors whose property the easement crossed were contacted.  One neighbor who had purchased their property less than a year before questioned my right to cross their property.  Months later it was verified by a title officer with Fidelity National Title Insurance Company that the easement shown as Parcels Two, Three, Four and Five in my Grant Deed did not extend across the parcel and he opened a claim with Fidelity National Title Insurance Company on my behalf.

At the end of October 2008 the claim was assigned to the Walnut Creek, California office and I discussed with the claim officer the two options of either obtaining the lost easement through purchase or compensating me for the loss of the easement.

In mid-November 2008, the claim was re-assigned to the Midwest Claims Center in Chicago, Illinois.  The second Claims Counsel wrote at the end of December, "I have completed my investigation of your claim of loss resulting from a secondary easement insured by the Policy of Insurance as Parcels 2 through 5 of Schedule A but which was, in fact, not owned by the seller and was therefore not properly conveyed to you at the time of your purchase of the property in question.  Consequently,coverage is appropriate as defined by the terms and conditions of CTLA Standard Coverage Policy of Title Insurance".

Title Insurance purchased from Fidelity National Title Insurance Company



In January 2002 along with partners I entered into escrow on an 80 acre parcel of land in Napa County overlooking the Napa Valley.  This 80 acre parcel was a ridge top parcel with three means of access making it unusual.  The property had two deeded ingress/egress accesses from Mt. Veeder Road in Napa County and a prescriptive easement from Cavedale Road in Sonoma County.  At the time I was both licensed as an architect and a real estate broker in the State of California and had used Fidelity National Title Insurance Company dozens of times for both personal and client transactions and had earned their Gold Client status.  Although none of my clients nor I had ever had need to make a title insurance claim I was confident that Fidelity National Title Insurance Company would protect my interest in my investment from my long term relationship and, for example, what is written on their website:

“We Hope You Never Have A Title Claim
Americans have the future in mind when they buy a house, and they purchase homeowners insurance to help protect that future. But with homeownership comes the need to protect the property against the past, as well as the future.

Title insurance protects a policyholder against challenges to rightful ownership of real property, challenges that arise from circumstances of past ownerships. Each successive owner brings the possibility of title challenges to the property.

When you purchase real property, rely on Fidelity National Title to protect your interests. You’ll be insured by a company backed by a long history of successful title operations.

Rely On Fidelity National Title To Protect Your Investment
Every owner, purchaser and beneficiary, whether by a deed or contract, should have an insured title. The entire investment depends upon the quality of title. If you are buying real estate mortgages, you are paying for a good title and you should see that you have one. If either fire insurance or title insurance is omitted, your security is not complete.

Our title policy protects you against unforeseen defects in title that an abstract or the public records do not show and cannot show…nor any attorney’s opinion includes.

Whether this is your first or fiftieth real estate investment, ask your real estate agent or broker to specify Fidelity National Title during your transaction.

*The statements made on this web page and any page that follows within the Fidelity National Title website are not intended, and shall not be construed to expressly or impliedly issue or deliver any form of written guaranty, affirmation, indemnification, or certification of any fact, insurance coverage or conclusion of law.”

            (From www.fntic.com October 26, 2012)

In 2004 I refinanced the property and bought out the equity partners and the escrow was with Fidelity National Title Insurance Company and a new Title Insurance policy was issued.  In the recorded Grant Deed was Parcel Two, Three, Four and Five.  Prior to the original purchase I met with the Title Officer in Napa California who provided me with a parcel map that showed where this easement was and the recorded descriptions from the Napa County Public Records of the easements.

Four Years and Counting


In a few days it will be four years ago that I spoke to my first Claims Counsel with Fidelity National Title Insurance Company in Walnut Creek, California. In early October 2008 a Title Officer with Fidelity wrote, “[u]pon the title personnel’s review of the easement you inquired about that was shown as Parcels Two, Three, Four and Five of the Grant Deed recorded 4/25/2003, Instrument no. XXXXXXXXX does not appear to extend across assessor’s parcel no XX-XXX-XX for that reason it has been determined that a claim should be opened and the matter has been turned over to claims department counsel.”  And this Title Officer opened the claim on my behalf.

Four years, five Claims Counsels in Walnut Creek, Chicago and Omaha and countless written pages, the claim is now a lawsuit back with the Walnut Creek Office of Fidelity National Title Insurance Company as it was determined that a claim for the loss of an almost mile long easement to an 80 acre parcel with views of the Napa Valley had a value of $0 – nada – nothing by an appraiser from Boise Idaho.

Friday was supposed to be the deposition of the Fidelity National Title Insurance Company Officer and Vice President who verified under penalty of perjury that Fidelity National Title Insurance Company’s Verified Answer to Third Amended Complaint was true and correct.  Leaving home at 6:30 am for a 9:00 am deposition, I arrived to the videographer packing up to leave.  The Counsel for Fidelity National Title Insurance Company had been on vacation.  He had not communicated with my attorney that the deposition could not occur today.  And this Vice President was reported to be an underwriter and not familiar with the claim.  And that the deposition that was to occur on Monday would also be cancelled due to the person who was supposed to be deposed not being available.

Over the next couple of days I will digress to the beginning of the story……………………