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Suit claims title insurers fixed prices

February 13, 2008|From Bloomberg News

First American Corp. of Santa Ana, the largest U.S. title insurer ranked by revenue, and 13 other insurers have been sued by homeowners in New York over claims that they fixed prices.

The title insurers fixed prices in New York at rates about 67% higher than the U.S. average, says a class-action complaint filed Feb. 1 in federal court in Central Islip, N.Y. The Title Insurance Rates Service Assn., or TIRSA, a group of state title insurers, functions as a cartel, the suit alleges.

"Under this rate-setting regime, defendants have charged identical and collectively fixed rates to consumers since TIRSA's inception," four homeowners allege in a court filing.

The plaintiffs are seeking "hundreds of millions" of dollars in damages, which may be tripled under U.S. antitrust law. They claim to have overpaid for title insurance as a result of the allegedly inflated prices. The suit seeks to obtain class-action status on behalf of homeowners statewide.

Other defendants include Fidelity National Title Insurance Co., Stewart Title Insurance Co. and LandAmerica Financial Group Inc.

Peter Habenicht, a spokesman for Glen Allen, Va.-based LandAmerica, and TIRSA Executive Director David Sidikman said they would fight the suit. First American, Jacksonville, Fla.-based Fidelity and Stewart of Houston didn't respond to calls for comment.

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