Press Release - Federal Class Action Filed Against Fidelity National Financial, Inc.
Lieff Cabraser Heimann & Bernstein, LLP Announces the Filing of a Federal Class Action Against Fidelity National Financial, Inc., and its Subsidiaries for Alleged Illegal Collection of Interest on Escrow Accounts and Retention of Reconveyance Fees
SAN FRANCISCO--(BUSINESS WIRE)--June 7, 1999
William B. Hirsch of the law firm of Lieff Cabraser Heimann & Bernstein, LLP, announced today the filing of a federal class action on June 3, 1999 that alleges widespread misconduct by one of the nation's and California's largest title insurance companies, Fidelity National Financial, Inc. and its principal subsidiary, Fidelity National Title Insurance Company. In addition, the suit names as defendants Fidelity Asset Management, Inc., and Rocky Mountain Support Services, Inc., both subsidiaries of Fidelity National Financial.
This class action follows upon an lawsuit filed in California state court on May 19, 1999 by California Controller Kathleen Connell against the escrow and title insurance industry for charging California property buyers fees for services not provided and illegally keeping interest earned on funds deposited in escrow.
"There are several key aspects of the federal class action that we believe will advance the interests of Fidelity's customers in ways unique from the Controller's action," Hirsch observed. "First, the federal class action alleges violations of a Federal statute, the Real Estate Settlement Procedures Act, on behalf of Fidelity customers nationwide, not just in California."
The Real Estate Settlement Procedures Act, known as RESPA, found in Title 12 of the United States Code Section 2601, is intended to promote fair and accurate dealing by the real estate industry, including title insurance companies such as Fidelity National Financial. Among the practices prohibited by the Act are the receipt of undisclosed fees, kickbacks, monies or credits representing monies pursuant to an agreement related to a real estate transaction. The Act also prohibits charging a fee for which no or nominal services are performed in connection with real estate transactions.
"The complaint alleges that Fidelity National Financial and its subsidiaries violated RESPA by both accepting secret interest on customer escrow accounts and charging sellers and refinancers of property reconveyance fees which were not performed," Hirsch noted.
"RESPA offers a powerful weapon against misconduct in the real estate industry because the statute permits treble damages. The Controller's action does not allege any claims under RESPA."
"Unlike the Controller's action, in addition to Fidelity National Title Insurance Company," Hirsch explained, "the federal class action also names as a defendant its parent, Fidelity National Financial, Inc." The federal class action asserts that the alleged misconduct committed by Fidelity National Title Insurance Company was under the direction and control of the persons at the highest levels of its parent corporation, Fidelity National Financial. The federal class action further alleges that Fidelity Asset Management and Rocky Mountain Support Services, two wholly owned subsidiaries of Fidelity National Financial, served as agents or conduits for the receipt of secret interest paid by banks or other financial institutions on escrow accounts of Fidelity's customers.
"We believe that the amount of secret interest obtained by escrow and title insurance industry may be substantially higher than revealed in the Controller's suit," said Hirsch. "For example, the federal class action alleges that in California alone, Fidelity and its subsidiaries in recent years obtained interest on escrow funds that fluctuated on a daily basis between a range of $25 million to half a billion dollars, and sometimes higher. This interest should have been disclosed and returned to Fidelity's customers."
Another significant difference between the two suits is the focus of the alleged improper charges by Fidelity. Hirsch commented, "A prime activity targeted by the Controller's action are fees charged by escrow and title companies to home buyers for services not rendered. The federal class action focuses upon fees charged to home owners who have sold or refinanced their property. Given the nationwide explosion of home sales and refinancing in past few years, it is crucial that these consumers of Fidelity's services also have their legal rights safeguarded."
If any customer of Fidelity believes that Fidelity improperly charged him or her fees in connection with a real estate transaction, they may use this form to contact Stephen H. Cassidy of Lieff Cabraser, or contact Mr. Cassidy by telephone at (415) 956-1000.
Fact Sheet
- Plaintiff: Betty P. Lopez-Jurado, suing on behalf of herself, all other persons similarly situated, and the general public. Ms. Lopez-Jurado both purchased and refinanced property using Fidelity National Title Insurance Company or one of its predecessors-in-interest.
- Defendants: Fidelity National Financial, Inc., a Delaware corporation with its headquarters in Santa Barbara, California, Fidelity National Title Insurance Company, a California corporation with its headquarters in Irvine, California, Fidelity Asset Management, Inc., an Arizona corporation with its headquarters in Irvine, California, and Rocky Mountain Support Services, Inc., an Arizona corporation with its headquarters in Irvine, California.
- Court: The lawsuit was filed June 3, 1999 in the United States District Court, Northern District of California, Case No. 99-2672. The case is currently assigned to U.S. Magistrate-Judge Bernard Zimmerman.
- Claims alleged: Violations of the Federal Real Estate Settlement Procedures Act, 12 U.S.C. § 2601 and under California State law for Unlawful, Unfair, and Fraudulent Business Practices (Cal. Business and Professions Code § 17200), False and Misleading Advertising (Cal. Business and Professions Code § 17500),Consumer Legal Remedies Act (Cal. Civil Code § 1750), and the common law claim for Breach of Fiduciary Duty.
- Key factual allegations: Fidelity National Financial and its subsidiaries illegally received secret interest, or its equivalent, from banks and financial institutions on escrow accounts deposited by Fidelity customers nationwide and Fidelity National Title Insurance Company improperly retained reconveyance fees charged to home owners selling or refinancing their property.
- Relief sought: Treble damages under RESPA for Fidelity's alleged misconduct to compensate a nationwide class of Fidelity customers, a injunctive relief requiring Fidelity to halt its continuing alleged misconduct.
- Plaintiff's attorneys: Lieff Cabraser Heimann & Bernstein, LLP, and Orme and Grabstein, a San Francisco, California law firm. The Lieff Cabraser attorneys primarily handling this case are William B. Hirsch and Stephen H. Cassidy.
Source | Contact
Lieff Cabraser Heimann & Bernstein, LLP
Stephen H. Cassidy, Esq.
275 Battery Street, 30th Floor
San Francisco, CA 94111
Tel: (415) 956-1000
Fax: (415) 956-1008
E-mail: scassidy@lchb.com
About Lieff Cabraser
Lieff Cabraser Heimann & Bernstein, LLP is a sixty-plus attorney law firm that has represented plaintiffs nationwide since 1972. We have offices in San Francisco, New York and Nashville. We represent plaintiffs in class and group actions and in individual lawsuits in cases involving substantial losses. For the last seven years, The National Law Journal has selected Lieff Cabraser as one of the top plaintiffs' law firms in the nation.
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