Hanszen Laporte Secures Insurance Coverage for Title Agency
April 9, 2021
Hanszen Laporte attorneys, Anthony Laporte and Matthew Hansel secured a judgment in favor of their title agency client against its insurer. The judgement found that the insurance company improperly denied coverage for a loss resulting from fraudulent wiring instructions issued by a fraudster.
According to Laporte, as is too often the case in the title industry today, “bad guys” snuck into email communications relating to an upcoming real estate closing. In anticipation of the closing, the receiving bank provided the title agency with wiring instructions. Later that same day, the title agency received “additional and updated” wiring instructions purportedly from the bank (but in reality, from the fraudsters). The updated instructions appeared in the same email thread and appeared to be sent from the same bank representative. Unfortunately, in compliance with the “new instructions,” the title agency updated the closing file and proceeded to close the transaction. The transaction closed as planned and the funds needed to pay off the prior mortgage were wired in accordance with the updated instructions.
Everything appeared to have run smoothly until the title agency learned, long after the closing, that the bank never received the funds to satisfy the prior loan. The title agency was the unfortunate target of a scam which plagues the title industry, banks, and business owners every day. As a result of this ruse, the fraudster ended up with the bank’s money … which, by this time, was long gone.
A lawsuit ensued, and the title agency filed a claim with its insurer for defense and coverage under its Crime Protection Policy. The insurer denied coverage and refused to defend the title agency in the lawsuit. According to Laporte, the title agency was left with no other choice but to file a lawsuit against its insurer to determine whether the insurance company was obligated to defend the title agency in the underlying lawsuit and provide coverage for the loss. The parties filed competing motions for summary judgment, and the Federal Trial Court rightly ruled in the title agency’s favor, concluding that there was indeed coverage for this loss.
The Court held that the fraudulent wiring instruction directly resulted in the subject loss, triggering coverage under the policy.
Hanszen Laporte and its attorneys continue to focus on the goal of the firm: to provide meaningful and positive results for its clients – in the boardroom, in the mediation room, and in the courtroom, irrespective of the pandemic challenging us all.