Sunday, October 8, 2017

Another problem with Fidelity National Title Insurance and Claim Issues

Here is the email I received and unfortunately not being an attorney I can only lend support and no advise.

Following is a brief summary of my situation. I welcome any suggestions you may have!

I purchase a condo in August of 2016. The financing was through Scott J of xxxxxx Bank, which, according to the Purchase Agreement I filled out per the lender's instructions and last Loan Estimate he provided me, was to be a fixed rate conventional loan with a Fannie Mae Homestyle Renovation Loan rider for $20,000 attached to renovate it. The contract had a close by July 15 date but due to a ton of additional requests for documentation, including tracking down people who purchased household goods from my garage sale to have them sign receipts, the closing was delayed for over a month.

I finally received the 2nd and final Closing Disclosure via email on the evening of August 17. We closed at 9:00am on the 18th. The time since then has been nothing but a nightmare.

A couple of weeks post close, I received an email from Scott J stating that xxxxxx Bank had been purchased by Chemical Bank and that he had switched to another bank. Although that didn't feel right, little did I know what all that would entail. Not only am I able to only communicate exclusively with a Mike R from Chemical Bank on the other side of the state about the issues with my loan, but this man has no idea about mortgages, is rude and has repeatedly and out rightly lied to me. 

I finally received my closing package after repeated requests on January 17 of this year. I understood why refused to provide it until called on the carpet. Not only was I given a "Construction Loan" for the entire amount of my home rather than the FMHRL for $20,000, but they failed to follow the Instructions to the Closer (these instructions were included in the closing package Lawrence D, ESQ, said he personally put together and sent to me) which REQUIRED the Licensed Residential General Contractor who was present at the closing to sign the FMHRL Contract, the Construction Indemnity Agreement, present Sworn Statements, etc. 

Their failure to hold the Contractor accountable allowed him to file a lawsuit against me for almost $55,000 and put a Notice of Lis Pendens on my property, making it impossible to obtain a Home Equity Loan or any other financing to pay for the repairs needed. He had contracted himself to do the work for $20,000 which I later found out was manipulative and deceptive. 

The contractor, however, provided a perfect smokescreen for the bank and title company. They have refused to correct their countless violations until after the lawsuit filed by the contractor is settled. As well, the refuse to discuss the situation with me, stating they will only talk with an attorney, which they know I don't have the funds for. 

I filed a claim with Fidelity National in April, asking for the legal representation my policy not only clearly covers, but states to be their obligation to provide. 

Additionally, the ALTA and Closing Disclosure show very different numbers. The Closing Disclosure states the Purchase Price to be $142,000 and doesn't show the $23,000 "construction" holdback. 

The ALTA states the purchase price to be $119,000 and does show the $23,000 holdback. That resulted in incorrect numbers being publicly recorded, which is just one of the many Covered Risks in my Owner's Policy and which they refuse to acknowledge or help me with. 

All I've received is two letters stating they are "still investigating" and "hope to have a determination soon". The last one came last week. The person assigned to my case is a man who has demanded I provide personal information, claiming it's needed to make a determination. I refused to provide personal/private information.

Both the bank and title company have refused to provide an accounting of the $23,000. This fraud/theft is supposed to be another Covered Risk that they refuse to acknowledge or do anything about. 

There's much more, but I'm hoping this gives you an idea of what I'm dealing with. Please feel free to ask me to change, add or discard anything you feel should be.

Thanks in advance for any help you can get in the works for me!

Saturday, January 7, 2017

Bad Faith Action Affirmed by Pennsylvania Superior Court against Fidelity National Title

The Superior Court of Pennsylvania recently affirmed the trial court’s opinion involving a bad faith action in Davis v. Fidelity National Title Insurance Company (674 MDA 2014). In the bad faith action law suit brought against Fidelity National Title in the lower court, the plaintiffs were awarded over $2 million in damages.
The plaintiffs, Richard and Maria Davis, purchased a 15 acre-plot in Lackawanna County, Pennsylvania to develop a residential housing project. Three years later in 2007, a neighboring property owner, Louis Norella claimed that a part of that property, a 1.86 acre-plot, belonged to him. Fidelity, the title insurance company that had insured the Davises’ property, recognized later that year that there was a problem with the title and assured the Davises that the matter would be resolved. It wasn’t until 2012 that Fidelity finally purchased Norella’s property for $50,000. The plaintiffs claimed that this five-year delay on Fidelity’s part prevented the project from coming to fruition at the time, thus causing a lost profit damage.
In affirming the lower court’s opinion, the Superior Court of Pennsylvania stated that the “excessive delay” experienced by the Davises implicated Fidelity National Title in bad faith action. The court also stated this excessive delay caused direct damage to the plaintiffs.
In an appeal of the trial court’s decision, Fidelity National Title argued that the plaintiffs’ housing project was merely speculative, and therefore Fidelity’s delay could not have had any effect on said development. In concurrence with the trial court, the Superior Court emphasized that there was plenty of evidence indicating that the Davises had already begun the project.
The court also noted that Fidelity’s appeal specifically challenged the amount of punitive damages granted by the trial court, rather than the issue of bad faith itself. Fidelity National Title argued that $224,760.00 for compensatory damages and $1,572,909.24 in punitive damages, in addition the simple interest accrued and the plaintiffs’ attorney’s fees and costs, were excessive and not supported by the Pennsylvania law. In response, the Superior Court cited the U.S. Supreme Court cases (see Haslip and Gore) that provide precedent for the 4-to-1 ratio of punitive to compensatory damages.
Legal precedence (see Gore and Campbell) establishes that the “most important indicium” is the degree of reprehensibility in evaluating an estimation of punitive damages. The Superior Court noted the factual reprehensibility of Fidelity’s actions in this matter, and also noted how the trial court had been “appalled” by how the defendant handled the plaintiffs’ case. After citing a long list of failings by part of the defendant, the court stated, “Indeed, it is difficult to find an area in which Fidelity National Title acted in conformance with accepted statutory, regulatory or internal standards”.
Fidelity National Title also argued that degree of reprehensibility must be determined by plurality of factors including, in particular, physical harm. While the court agreed that Fidelity National Title had not induced any physical harm to the plaintiffs, the other factors that had caused harm to the plaintiffs were sufficient to establish the high degree of reprehensibility in Fidelity’s conduct.
The court further stated that attorney fees can reasonably be accounted as compensatory damages finding no evidence in past trials that establish the contrary.
With this case, the Superior Court has established three important parts that will be key to future bad faith actions. First, in concurrence with legal precedent, this case affirms that damages are estimated on a 4-to-1 or 5-to-1 punitive to compensatory damage ratio. Second, that bad faith actions are largely based on asserting the degree of reprehensibility which may not necessarily include all factors, such as physical harm. Thirdly, Davis establishes that attorney fees may be considered as part of compensatory damages in such matters. In effect, the Superior Court of Pennsylvania asserted the legitimacy of the plaintiffs’ claims and upheld the long legal precedent against bad faith actions

"the trial court was appalled by Fidelity's conduct"


This is a portion of the document referred to in previous post.  (I bolded some interesting parts)

The degree of reprehensibility is the most important of the factors in assessing the appropriateness of punitive damages. Here, it can fairly be said, the trial court was appalled by Fidelity’s conduct.

The trial court found Fidelity was aware of both the delay it caused Davis and likely consequences thereof. Final Memorandum and Order, 3/28/2014, at 11.

In December 2007, shortly after Davis filed the claim, Fidelity notified Davis it was evaluating the claim and hoped to get back to him shortly. Memorandum and Order, 8/15/2013, Finding of Fact 14, at 4.7 Approximately one year later, Fidelity notified Davis that Norella may have a valid claim to the 1.86 acres. FF. 15, at 4. Six months later, 20 months after the claim had been filed, Fidelity accepted Davis’ claim and again stated it would contact Davis shortly regarding resolution of the claim. FF. 17, at 4. Fidelity waited another three months to hire counsel. FF. 18, at 4. Fidelity investigated the possibility of filing a quiet title action against Norella, but admitted there was scant chance of success. FF. 23, at 5. Nonetheless, Fidelity threatened Norella with filing the suit. CL. 22, at 14. By August 2010, counsel for Fidelity was warning Fidelity of the possibility of bad faith. FF. 24, at 5. Davis repeatedly made inquiry about the status of his claim. CL. 24, at 14. Fidelity breached its own contract by failing to act diligently, failing to pay the loss within 30 days of fixing the ____________________________________________ 7

 All citations to findings of facts (FF) or conclusions of law (CL) are taken from the August 15, 2013 Memorandum and Order. Additionally, the trial court did not issue omnibus findings of fact and conclusions of law, rather, they were broken down into sub-categories, not always specifically labeled as findings or conclusions. For ease we refer to all citations as either FF or CL. Rather than clutter this memo with sub-category titles, we will cite to the FF or CL number and the page on which it is found. J-A31019-14 - 12 - amount and failing to act in good faith and fair dealing. FF. 8, at 17. It failed to follow its own internal claims handling procedures. FF. 13, at 18. Fidelity violated 31 Pa. Code 146.6 and 146.5(c) regarding prompt investigations of claims and communications with clients, as well as Pennsylvania Statutes 40 P.S. 1171.5(a)(10)(ii),(v) regarding communications with clients and failure to affirm or deny claims promptly. FF. 15, 16, 17, at 18-19. Fidelity made no offer to either Norella or Davis until after Davis filed the instant bad faith claim. FF. 36, at 7. Indeed, it is difficult to find an area in which Fidelity acted in conformance with accepted statutory, regulatory or internal standards.

Fidelity National Title Breach of Contract and Bad Faith - Davis awarded $2,062,746.89

Appellant No. 672 MDA 2014 Appeal from the Judgment Entered May 28, 2014 In the Court of Common Pleas of Lackawanna County Civil Division at No(s): 10-00-8868 BEFORE: BOWES, J., OTT, J., and STABILE, J. MEMORANDUM BY OTT, J.:
 FILED MARCH 18, 2015

Fidelity National Title Insurance Company d/b/a Fidelity National Title Insurance Company of New York (Fidelity) appeals from the judgment entered on May 28, 2014, in the Court of Common Pleas of Lackawanna County. Plaintiffs, Richard and Maria Davis (collectively Davis), filed a complaint against Fidelity alleging breach of contract and bad faith regarding a dispute over ownership of a 1.86 acre parcel of land. The parties proceeded to a bench trial before the Honorable Carmen D. Minora who found in favor of Davis on both counts and awarded an aggregate verdict of $2,062,746.89. Fidelity raises five issues in this timely appeal. After a thorough review of the submissions by the parties, relevant law, and the certified record, we affirm.

Read the entire document at: