Central Florida Title Agency Faces Lawsuits
When Florida mortgage demand declines and housing sales wane as a result, trouble often heats up in the title industry.
A title company and a jilted business partner have filed lawsuits totaling $825,000 against Independent Title Agency LLC in Lakeland, Fla., its owner and her husband, according to the Lakeland Ledger.
Old Republic National Title Insurance Co., based in Minnesota, has filed a civil suit alleging breach of contract, fraud, conversion and theft. The company is seeking $700,000 in damages against Independent Title.
Among the allegations are that the couple used escrow funds to purchase three Florida real estate properties, and three cars.
The alleged financial mismanagement of the company was discovered during an audit, court documents report.
Shortly after the finding, the 2-year-old company’s license to sell title insurance was pulled by Old Republic. The company closed in January.
“She (bought) real estate, a BMW and led a lifestyle on other people’s money,” said Robert Cohen, a Miami lawyer representing Old Republic. “And that won’t be tolerated.”
In an unrelated case, Lakeland resident Carlos Unzueta, a former business partner, is suing Erica Daniels and the company for $125,000, alleging breach of contract, fraud, misrepresentation and conversion.
The Danielses did not return calls from The Ledger for this story, but the following message appears on the company’s Web site:
“Independent Title Agency strives to bring personalized service and peace of mind to every individual involved in each transaction. You may notice that we perform slightly different than you may be accustomed to.”
The Old Republic suit says the couple wired money to buy personal property directly from escrow accounts. Such accounts are clients’ funds set aside from clients to pay for title services.
Typically, several withdrawals are made from an account during closing, such as money set aside for Florida mortgage payments, property taxes and insurance.
Those withdrawals are usually transferred to the company’s general fund and are used to fund payroll and normal business expenses.
“This is going to be one of two things: Overt fraud and embezzlement or sloppy accounting,” real estate lawyer Steve Watson said of the case. “With the escrow, you don’t give direct funds to yourself. At best, this is just sloppy accounting.”
Independent Title was an agent for Old Republic, which also has offices in Lakeland. As a standard business practice, an audit of agent offices is performed at most title agencies annually to ensure the accuracy of accounting practices.
Lane Atkins, a Miami lawyer also representing Old Republic, wrote in the lawsuit: “A review of Independent’s escrow account records and internal audits reveal that over $700,000 in escrow funds have been stolen and misappropriated by Independent, (Erica) Daniels and Michael Daniels.”
When the Florida home mortgage market cools, trouble finds the title industry, said Jim Smith, vice president for Stewart Title Guarantee in Orlando.
“It happens in typically hard times in the industry. I know of about 10 to 15 (cases) that have happened in the last 12 to 18 months (in Florida). And we are in a down market right now.”
In February, the Polk County housing market declined, with sales totaling 334, a 25 percent drop from 447 in February 2006. The decline in sales has been an ongoing local trend for the past nine months.
Continue reading in the Lakeland Ledger …
