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.
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).
