Another two hour conversation yesterday. I have now had numerous conversations with people who were involved in the claims process with Fidelity National Title. The specifics of the claims are all slightly different but the similarities are remarkably the same.
1) Every individual I have talked to has felt frustrated, very angry and that they were not being treated fairly or as valued customers. Class action, fraud, bad faith and/or other choice words have been used singularly or in combinations. (And the emphasis here is on choice words!!)
2) Every individual has in some way - frequently by Fidelity National Title like I was - had it acknowledged that they had a valid claim. Some like myself actually had the claim opened for them by Fidelity and/or had the claim acknowledged as valid in a letter.
3) Every individual was attempting to settle or was involved with the Claims Department for years. I would guess the average time to be four years.
4) Every individual thought at the beginning of the claims process that the Claims Counsel was there to help them and/or to represent their (the insured's) interest but slowly over time learned that the Claims Counsel appeared to represent the financial interest of Fidelity National Title above the interest in protecting their property rights. (And here I should clarify - not one person I spoke to felt that they received a fair and equitable settlement - not even close. Compounding this for most was the tens and hundreds of hours the claimants had to work to procure any kind of a settlement - and this time was universally not acknowledged financially.) (In my particular case by the time court, attorney and appraisal fees were paid - I received nothing for my loss and about 10 cents an hour for the time I spent pursuing the claim opened on my behalf by Fidelity.)
5) Every individual had multiple Claims Counsels assigned to their claim. So far the fewest I have heard is three (and that person has still not settled their claim) but six seems to be a common number.
6) Individuals have spent between $50,000 and $300,000 or more to settle their claims with Fidelity National Title.
The other common thread which is the purpose of this blog is "How do we keep this horrible situation from happening to others?" I do not have the answer to that question. One difficulty is that I have spoken to/or heard from clients of Fidelity National Title from more than a dozen states. But I believe that using our First Amendment rights and communicating the facts of what occurred during our claims to inform and educate others is at least a step in the right direction.
Additionally, I have been trying to learn more of how title insurance claims work by talking to others and researching the process on the internet.
Some important questions that arose from my experience include:
Why is your escrow handled by Fidelity National Title Company and your property is insured by Fidelity National Title Insurance Company?
Is this why the files and documents of the escrow and title search done by Fidelity National Title Company for that process not available to Fidelity National Title Insurance Company during the claims process? (At least they were not available in my case.)
Why are the people who handle the claims attorneys? And do these attorneys represent you as the claimant or the financial interests of Fidelity National Financial and its subsidiaries?
Are the claims counsels attorneys and really representing the financial success of Fidelity? And then in the case of a lawsuit their phone logs, notes, emails, etc. are not available due to attorney/client privilege?? (At least they were not provided in my case.)
If they are indeed all separate companies why do all of their email addresses (from escrow officers to claims counsels) end in @fnf.com?
Are the insured actually the clients/customers of the company??
Does the fact that Fidelity has an employee stock program create a conflict of interest in the paying of claims? In other words if claims are not paid then the value of the stock increases, correct?
Oh, I could go on and on with question after question. I obviously have a lot more research to do on how title insurance companies handle the claims of the insured.
It is a very difficult task to file a successful insurance claims this is because when the consumer pay premiums insurance company collect this money and invest them into stock market and if loss occurs how they are going to pay the amount so they delays the claim process.
ReplyDeleteThanks
William Martin
PPI Claims Made Simple
I also learned from first hand experience that another reason for delaying settling the claim is that once you no longer own the property - even if the claim was opened prior to that date - the title insurance company is no longer legally liable to pay on the claim. So it appears there are many benefits to companies like Fidelity to promptly pay claims.
ReplyDeleteBut I understand what you are saying but you think they would anticipate having to pay some claims and keep some funds liquid.
The consumer has apparently been mislead to believe that the money they pay for insurance coverage is there in the event of need or loss. In most states, it is the LAW that a consumer have insurance for auto, home, title, etc. In the near future, it will be the LAW that the consumer have health insurance coverage. Is the government enforcing laws upon the consumer to buy mandatory insurance, and yet, the insurance companies have no mandatory laws that require them to pay claims? This issue is not only a question in real estate (which this blog mainly speaks to) but this is also a critical issue that has far reaching implications on the entire insurance industry. When mandatory health insurance does go into effect. Will the consumer be forced by law to pay premiums on insurance that a claim adjuster can simply deny? Why in the world would anybody stand for that? The laws are forcing the consumer to pay for a insurance in the event of loss, yet the insurance industry does not have to pay in the event of loss. If this is true, it doesn't get more against the law than that.
ReplyDeleteAs you well know, bad faith practices are abundant and rampant. I just heard from someone who had a lawyer hired by the title company to represent him during the claims process. This individual received nearly the exact same treatment as I did with the insurance industry.
ReplyDeleteThe title company accepted the responsibility of the claim but mandated that the insured accept an outside hired attorney of the title company's choice to represent the insured.
However, what had become apparent in the process was that the title company was not acting in good faith for the responsibility of their error. But instead proceeded with action to legally eliminate their responsibility of the error by hiring an attorney to manipulate an outcome so that the title company would have little to no responsibility. After this was accomplished the title company then discontinued coverage and representation of the insured.
Even though this was "successfully" accomplished by the title company and their hired outside council. The title company remains accountable for the original error no matter what course of action the company took to minimize the damage of the original error made by the title company.
The insured continued to pursue the original issue with the title company and he received another letter. Only this time, from an "outside attorney" hired on "behalf" of the title company. This attorney actually had the audacity to issue a cease and desist notice on behalf of the title company. The nerve...the nerve.
These comments are all very well said - and I believe deserving of a new post on how Fidelity National Title Insurance Company defends your real estate in the event of a dispute. I believe the better this is explained - the better all of us will be protected.
ReplyDeleteKreis Enderle, Attoneys at Law, have offices in Battle Creek, Kalamazoo, Grand Rapids, St. Joseph and Lansing Michigan.
ReplyDeleteThis firm is hired by Fidelity National Financial to represent Fidelity's customers. Kreis Enderle receives approximately 150 cases a year from Fidelity.
Who is Kreis Enderle representing when they represent a client on behalf of Fidelity National Financial?
Conflicting responsibilities are most certainly encountered if the answer is both. But the answer can not be both when a is accepted by Fidelity. Therefore the firm either represents the client or Fidelity in the claim process.
This would suggest that there is little doubt that the Rules of Professional Conduct are being flagrantly ignored by Fidelity and the law firms they employ.
Well I personally find this very interesting information being provided by one of my readers. If one law firm is providing legal services for 150 clients a year - I would think that is a major client (meaning Fidelity) and their loyalty would be to that client - as Fidelity National is paying their bills.
ReplyDeleteThis is similar to the appraiser from Boise Idaho who was hired to appraise my property in the Napa Valley in California. He even stated in some of the documentation that I received that he had done other DIV appraisals for Fidelity (not surprising) and was advising the claims counsel on the methodology to get the lowest value for Fidelity.
So I would agree with your suggestion. And thank you for your contribution.
A recent decision by the U.S. Bankruptcy Court for the District of Delaware highlights the need for all corporate officers, including general counsel, to remain vigilant as to the conduct of their fellow officers.
ReplyDeleteMembers of senior management owe fiduciary duties to the corporation and, when those duties are breached, those individuals face the possibility of personal liability for their actions.
Can you please clarify your statement above. So if members of senior management owe a fiduciary duty to the corporation (stockholders) does that then over ride their duty to us as the insured (consumers)?? And if so, isn't that a conflict of interest?
ReplyDeleteThe Bankruptcy Court determined that under Delaware case law,
ReplyDeleteprofessional negligence for "breach of the applicable standard of care" and failure to "implement an adequate monitoring system and/or the failure to utilize such system to safeguard against corporate wrongdoing".
Moreover, the court determined that a member of senior management, knew or should have known of the corporate wrongdoing taking place yet failed to do anything to prevent it.
Thank you again. Can you please cite the specific case? My other question also, as you seem to be knowledgeable is will this case law be applicable to all states? I know from my own case that only cases in California were applicable. But on the other hand many corporations are Delaware corporations.
ReplyDeleteAs a result of Miller v. McDonald, the law has evolved to impose greater duties on in-house counsel, including fiduciary duties to implement and utilize monitoring systems, provide oversight and advice regarding possible wrongdoing, and take action to prevent, remedy or ameliorate others’ wrongdoing.
ReplyDeleteCorporations which act in more than one state are subject only to the laws of their state.
However, when a state law affords a person more rights than federal law, the state law is legally presumed to prevail.
This means state law will always supersede federal law when the person in question stands to gain more from the state law.
Conversely, when state law imposes more responsibility on a citizen than federal law, the person could be subject to a higher penalty for violating the state law.
Again, thank you and I will definitely research this case. It appears that it could have a huge impact on companies like Fidelity National Title who use in house counsel as the people who handle claims and I imagine that we (as the consumers) will have to push to have this implemented in all states that companies that operate nationally like Fidelity are in. It, of course, raises so many questions - as many of us have been dealt with by the Claims Center in Omaha - so in that case what law applies??
ReplyDeleteI believe though as consumers (customers/clients/the insured) all we want is to be treated fairly and to have our valid claims paid in a timely and just fashion and/or to have representation that is there to protect our interest in our real property and not the bottom line profits of the title insurance company.
In the case of Fidelity National Title Insurance Company v. Troy W. McCasland and Susan A. McCasland Civil No. 12-1-0476-02 KKS
ReplyDeleteIt appears that Fidelity’s thinking went something like this:
We can spend $1,000,000 to pay this claim or we can take our chances in court, and hope the insured doesn’t have the money to defend a lawsuit.
It costs $50,000 to go to court and if we lose it only costs us $1,000,000 plus our attorney fee and their attorney fees = $1,100,000. If this strategy works 9 times out of ten we’re still ahead of the game.
Risk management may have indicated that their maximum exposure is the policy limits so why not gamble.
Usually in these types of case Judges hear oral arguments, review the pleadings and make a ruling weeks or months later after careful deliberation.
Only this time, justice prevailed. The Judge ruled from the bench right then and there.
On Monday April 8th, 2013, Honolulu Judge Karl Sakamoto ruled in favor of the insured ordering Fidelity to provide coverage.
Okay - so in my opinion this describes my case exactly. It would have cost Fidelity National Title at least $1,000,000 to make me whole - that is the $800,000 actual loss, four years and hundreds of hours of my time trying to get them to honor my policy, attorney's fees, court fees, etc. As it is I spent $50,000 to get about 10 cents an hour for trying to get a fair shake from them. And they were correct - I could not afford to continue the battle.
ReplyDeleteSo what do you suggest we (all) do??
The only thing that I felt that I got out of my lawsuit with Fidelity National Title was the fact that I refused to settle if there was any kind of a gag order in my settlement agreement that would jeopardize my First Amendment Rights to free speech. Thus this blog. I may have lost - but if possible - I will do anything to aid others who are involved in a claim with Fidelity.
In the United States, Certiorari is most often seen as the writ that the Supreme Court of the United States issues to a lower court to review the lower court's judgment for legal error (reversible error) and review where no appeal is available as a matter of right.
ReplyDeleteA party who wants the Supreme Court to review a decision of a federal or state court files a "petition for writ of certiorari" in the Supreme Court.
If the Court grants the petition, the case is scheduled for the filing of briefs and for oral argument.
Obviously your education and experience is far different than mine as an architect. I am very appreciative of all of the references you are providing and I certainly will be on the homework train tonight (I have to work this afternoon.)
ReplyDeleteThank you very much.