Thursday, March 21, 2013

Giving up on the California Department of Insurance


December 11, 2009

K. McMullin
Associate Insurance Compliance Officer
California Department of Insurance

Dear Ms./Mr. McMullin,

                I received your letter dated December 8, 2009 and I certainly understand your position that your regulatory review is separate from the determination of an amount payable on a claim.     This letter is not about the money.  It is about the fact that the actions (and inactions) of Fidelity National Title Company are just not right. 

Fidelity National Title using PGP Valuation as the appraiser has determined the following:
1.       When I purchased the 80 acres in Napa County that is surrounded by multi-miilion dollar properties, it had two deeded legal easements from Mt. Veeder Road in Napa County.  One through residential properties going through a wooded area and then vineyards.  The other through a commercial and manufacturing winery.
2.       After a neighbor questioned the entrance through her residential property, it was determined by Craig Donner, title officer with Fidelity National Title that the easements through the residential properties were incorrectly conveyed to me and he opened the claim for me with his company.  (Please note that at no time did Fidelity attempt to re-acquire the lost easements.)
3.       Dragging this out over 1 ½ years, using an appraisal that I have demonstrated over and over again to be inaccurate to the point of ludicrous prepared by commercial appraisers from Boise Idaho (I would also like to note that one article I read described PGP Valuation Inc. “at the core” of the Marcus and Millichap fraud case which also did not give me great confidence in their honesty and integrity), the value of this lost easement has not been given a value of zero ($0).

                I am beginning to think that I am nuts.
                 Imagine you were in a car accident and another driver ran a red light and careened into your car causing you the loss of one of your legs and the other driver’s insurance company said, “Yes, our driver was at fault and we are filing a claim on your behalf.”  Then after you hobbled around on one leg for more than a year not being able to walk, the insurance company determines that your claim has a value of zero ($0) as they have hired Dr. Quackenbush from Boise, Idaho who states that the one leg you have is just fine (although it wasn’t even your strongest leg) and the lost leg added no discernable value to your body.  And now a year and a half later having suffered severe financial difficulties due to having only one leg you are told to hire a very expensive specialist (even though you have provided tons of documentation – including a letter from your boss saying that you could not perform the duties of your job and were being terminated - on the difficulties having only one leg has caused you) to say that yes your lost leg did have value.  And you know that once you have this opinion from this other specialist all you are going to have is your special’s opinion vs. Dr. Quackenbush’s opinion and you will be forced to litigate as the insurance company has not reviewed any of the documentation you have already provided them.  So why would they even look at the new doctor’s opinion?
                I am not asking you to determine a value.  I know that that is not within the realm of the Department of Insurance.  And I will probably spend the weekend reading regulations.  I did find the following on a law firm in San Francisco website.  I cannot believe that Fidelity National Title has not violated just about every regulation in the book.  I do not believe that anyone would find the value of ZERO of the loss of a residential entrance to a property after 1 ½ years leaving the legal entrance to the property as solely through a commercial and manufacturing property as prompt or fair or equitable.  I do not believe that an insured should have to battle with their insurance company and be ignored the way I have been treated by Fidelity National Insurance Company.  I do not feel that I should have had to provide information and data to the insurance company to dispute the bogus lies and misrepresentations made by their “approved” appraiser.  And I do not believe that I should have to implement litigation against my own insurance company who I hired and contracted to insure my interest in the property in order to get a settlement – let alone a just and fair settlement.
                I understand from the comment made below and I can only imagine with budget cuts that your department has even more limited resources than when this comment was written but I hope that this is one claim that you will be able to take action on under the Unfair Practices Act and will see that Fidelity National Insurance has acted in Bad Faith in the handling of this claim.  I could even understand a value of zero if there was a question as to whether or not I had a claim BUT THE CLAIM WAS INSTIGATED BY THEIR OWN TITLE OFFICER ON MY BEHALF. 
                It is my hope that you can throw the book at them (and I hope it is a very big and heavy book).  No one should have to go through what I have gone through in order to get settlement for a claim especially one that was filed on my behalf by their own title officer!  It is obvious that they have a behind the door policy to not settle claims knowing that only a small percentage of claimants will litigate.

                Once again thank you for listening to what I have to say in this matter.

Best Regards,



Ann Zollinger


                The California Insurance Code contains Insurance Code 790.03(h), which is called the Unfair Practices Act. It sets forth a variety of actions by an insurer that are considered unfair practices and therefore are improper. There is no right to sue directly under this statute. Enforcement is the responsibility of the Department of Insurance. However, that department has very limited resources to enforce this Act and rarely takes actions to enforce it.
                Still, a policyholder can use the statute when suing under the common law of Insurance Bad Faith to establish certain minimum standards with which an insurance company must comply. The list of prohibited acts is set forth below. It is by no means an exhaustive list of all of the conduct that would be improper or would constitute Insurance Bad Faith. The specific prohibited acts listed in Insurance Code 790.03(h) are as follows:
·         Misrepresenting to claimants pertinent facts or insurance policy provisions relating to any coverages at issue
Fidelity National Title received and is using without review an appraisal that it has been demonstrated to them has misrepresentations, omissions and down right out and out lies.
·         Failing to acknowledge and act reasonably promptly upon communications with respect to claims arising under insurance policies
I have been shuffled around to four claim counsels over the course of 1 ½ years waiting months for responses to letters for a claim that was filed on my behalf by Fidelity National Title itself.
·         Failing to adopt and implement reasonable standards for the prompt investigation and processing of claims arising under insurance policies
Fidelity National Title failed to implement reasonable standards for the prompt investigation by hiring a commercial appraisal firm from Boise Idaho which demonstrated no knowledge of residential real estate in Napa California.
·         Failing to affirm or deny coverage of claims within a reasonable time after proof of loss requirements have been completed and submitted by the insured
This has been going on for 1 ½ years.
·         Not attempting in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear
Liability was determined by Craig Donner, a title officer with Fidelity National Title for the four lost easements.  A value of zero after 1 ½ years is not a prompt, fair, or equitable settlement.
·         Compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by the insureds when the insureds have made claims for amounts reasonably similar to the amounts ultimately recovered
As they are not offering a fair and just settlement I feel that I am being compelled to either pay for a very expensive appraisal ($6000) and with the way this has gone (the claims counsel has not read, reviewed or responded to the myriad of factual data that has been provided to him which presents an opposing view of the “approved” appraiser) I believe I will be compelled to institute litigation.
·         Attempting to settle a claim by an insured for less than the amount to which a reasonable person would have believed he or she was entitled by reference to written or printed advertising material accompanying or made part of an application
Per Stanley v. Atlantic Title Ins. The purpose of title insurance in to place the insured at the same position that he felt he had at the time he purchased the policy.  At that time I believed I had two (2) legal entrances from Mt. Veeder Road in Napa County.  I now have one (1).
·         Attempting to settle claims on the basis of an application that was altered without notice to, or knowledge or consent of, the insured, his or her representative, agent, or broker
·         Failing, after payment of a claim, to inform insureds or beneficiaries, upon request by them, of the coverage under which payment has been made
·         Making known to insureds or claimants a practice by the insurer of appealing arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration
·         Delaying the investigation or payment of claims by requiring an insured, claimant, or the physician of either, to submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss forms, both of which contain substantially the same information
They are now requiring me to obtain at my great expense an opposing appraisal when well documented information has already been provided to them.
·         Failing to settle claims promptly when liability has become apparent under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage
·         Failing to promptly provide a reasonable explanation of the basis relied on in the insurance policy in relation to the facts or applicable law for the denial of a claim or for the offer of a compromise settlement
·         Directly advising a claimant not to obtain the services of an attorney
·         Misleading a claimant as to the applicable statute of limitations
·         Delaying the payment or provision of hospital, medical, or surgical benefits for services provided with respect to acquired immune deficiency syndrome or AIDS-related complex for more than 60 days after the insurer has received a claim for those benefits, where the delay in claim payment is for the purpose of investigating whether the condition preexisted the coverage. However, this 60-day period shall not include any time during which the insurer is awaiting a response for relevant medical information from a health care provider.
(For more information on the California Insurance Code, please go to the Official California Legislative Information Web site, where you will find information on California Law and Insurance Codes.)
Department of Insurance Regulations
The Department of Insurance has issued regulations that apply to all insurance claims in California.
These regulations are lengthy and contain many requirements of insurance companies. The most common important provisions are the following:
Every insurance company is required to maintain a file that documents all important events. 10 CCR 2695.3
Every insurance company is required to advise the policyholder of all benefits, coverage, time limits, or other provisions which may apply to the claim, to advise the policyholder of when other or additional benefits may be payable, and to cooperate and assist the policyholder in obtaining these benefits. 10 CCR 2695.4(a)
 “cooperate and assist the policyholder in obtaining these benefits.”
Every insurance company shall immediately and properly respond to communications from policyholders. 10 CCR 2695.5(b)
“shall immediately and properly respond to communications from policyholders.”
Every insurance company shall maintain appropriate claims manuals. 10 CCR 2695.6
In most instances, claims shall be resolved within 40 days unless the insurance company notifies the claimant of the specific reasons (except for suspected fraud) why more time is required. Such notification must be made every 30 days. 10 CCR 2695.7(b)
“shall be resolved within 40 days” – I bet we hit 40 months.

A denial of a claim must set forth the specific factual and legal reasons and cite all applicable policy provisions. 10 CCR 2695.7(b)(1)
“must set forth the specific factual and legal reasons and cite all applicable policy provisions.”
No insurer shall attempt to settle a claim by making a settlement offer that is unreasonably low. 10 CCR 2695.7(g)
In most instances every insurance company shall tender payment of any portion of a claim that is not in dispute within 30 days of acceptance. 10 CCR 2695.7(h).
For more information on the California Insurance Code, please go to the Official California Legislative Information Web site, where you will find information on California Law and Insurance Codes.