Title Insurance Underwriter Files Suit In Attempt To Wiggle Out Of Liability For Actions Of Alleged Sticky-Fingered Closing Agent In R/E Escrow Ripoff

In Dothan, Alabama, the Dothan Eagle reports:

• An insurance company is asking a federal judge to rule it should not be held responsible for covering the losses incurred by several families through alleged misconduct from an area title company. Tudor Insurance Company, through documents filed in U.S. District Court, claims its insurance policy with Dothan’s Title Pro Closings covers only errors, omissions and negligent acts, not criminal or fraudulent acts.

• Former Title Pro Closings manager Tammy Lynn Peters has been charged with nine counts of first degree theft of property and is listed as a defendant in at least six civil lawsuits. Peters was employed with Title Pro and her duties included closing of certain loans and disbursement of loan proceeds at closings.

• An audit of Title Pro revealed that funds were missing, misappropriated or misapplied and, as a consequence, several customers of Title Pro learned that their prior mortgages had not been satisfied. Combined losses of several hundred thousand dollars have been alleged. Tudor includes its policy with Title Pro Closings in court documents, which, in part, states “Coverage under the policy does not apply to any loss in connection with or arising out of or in any way involving ... the committing in fact of any criminal or fraudulent act.” “Pursuant to the terms and provisions of Tudor’s policy of insurance, there is no coverage for Title Pro Closings, LLC and (Tammy) Peters for the claims alleged in the underlying lawsuits ...,” Tudor states in court documents.

• Attorneys for the families, however, claim the cases against Peters are still young and it is too early to determine Tudor’s claim. “The Plaintiffs in the underlying tort actions used Title Pro to handle their real estate closings. Title Pro was responsible for taking the proceeds from the sale of the Plaintiffs’ property and applying those proceeds to the purchase of their homes. Those Plaintiffs learned that such proceeds were not so applied, some when they received foreclosure notices. The Plaintiffs do not pretend to know, at this early stage of the discovery process, exactly how this omission came about. They only know that Title Pro had an absolute duty to see to it that the proceeds at the closings were applied to their purchases, and this did not occur,” Matt Glover, attorney for the families, stated in a response to Tudor’s claim.

• “The Plaintiffs have asserted claims for breach of contract, negligence, and fraud in connection with this omission. Tudor Insurance, in its declaratory action, invites this Court to make a factual determination that Title Pro’s failure to properly apply the proceeds to the Plaintiffs’ purchases resulted from intentional, criminal conduct on the part of its insured. This Court should decline that invitation,” Glover added. No ruling has been made at this time.

Source: Insurer asked to be released from claims arising from Title Pro cases.

For the title insurance underwriter's lawsuit seeking a declaratory judgment, see Tudor Insurance Company v. Title Pro Closings LLC, et al.

For the screwed over homeowners' response to the lawsuit, see Defendant's Brief In Support Of Motion To Dismiss.

For an earlier report on this story, see More charges returned in Title Pro case.