I skimmed over First American's recently released quarterly report this morning.  One of the things I was looking for was any update from the company on the lawsuit Bank of America filed against it in March.  Some of you will recall the lawsuit--it alleges that First American had failed to pay claims on several thousand "lien protection" insurance policies.  See a copy of the lawsuit here.

There have been some developments, according to First American's report:

On March 5, 2010, Bank of America, N.A. filed a complaint in the North Carolina General Court of Justice, Superior Court Division against United General Title Insurance Company and First American Title Insurance Company. The plaintiff alleges that the defendants failed to pay or failed to timely respond to certain claims made on title insurance policies issued in connection with home equity loans or lines of credit that are now in default. According to the complaint, Fiserv Solutions, Inc. (“Fiserv”), as agent for the defendants, was authorized to issue certificates evidencing that a given loan was insured. The complaint also indicates that plaintiff was required to satisfy certain criteria before title would be insured. This involved (a) reviewing borrower statements to the lender when applying for the loan, (b) reviewing the borrower’s credit report and (c) addressing secured mortgages appearing on the credit report which did not appear on the borrower’s loan application. The plaintiff alleges that the failure to pay or timely respond to the subject claims was done in bad faith and constitutes a breach of the title insurance policies issued to the plaintiff. The plaintiff is seeking monetary damages, punitive damages where permitted, treble damages where permitted, attorneys fees and costs where permitted, declaratory judgment and pre-judgment and post-judgment interest. On April 1, 2010, the Company filed an answer to Bank of America’s complaint and filed a third party complaint within the same litigation against Fiserv for breach of contract, indemnification and other matters. The Company’s agreement with Fiserv required Fiserv, among other things, to ensure that the Company’s policies were issued in accordance with prudent practices, to refrain from issuing the Company’s policies unless it had determined the product could be properly issued in accordance with the Company’s standards and to provide reasonable assistance in claims handling. The agreement also required Fiserv to indemnify the Company for certain losses, including losses resulting from Fiserv’s failure to comply with its agreement with the Company or with Company instructions or from its negligence or misconduct. While it is not feasible at this time to predict with certainty the outcome, the ultimate resolution could have a material adverse effect on the Company’s financial condition, results of operations or cash flows in the period of disposition.

I'd be interested to hear what First American had to say in its answer, and also would like to see what's in its complaint against its agent, Fiserv.  The court case number is written on Bank of America's original complaint which I linked to above.  I'm not sure about a couple of the numbers in it, however-- the handwriting is sloppy...

Anyway, if anyone has access to the court records in Mecklenburg County, North Carolina Superior Court and has the inclination to participate in a wild goose chase, I'd sure appreciate copies of those April 1 court filings.  If someone can get them and send them to me, I will post the documents here in the forums, so we can all take a look at them and see if we can figure out what's been going on.