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Case ID: 2805 | Insurance | 10/22/2003
A class action has been filed against World Savings and Loan Association on behalf of California borrowers under secured loans made or serviced by World alleging that the company used unnecessarily expensive hazard insurance policies to illicitly make additional profits, breaching their contracts and violating the California Business and Professions Code. The action seeks restitution of the amounts that the company wrongly made through the policies.
Named plaintiffs Harry and Joyce Gibson allege that, when they failed to maintain their hazard insurance on the property that secured their loan with World, the company purchased forced order insurance ("FOI") from Balboa Insurance Company to replace their insurance instead of merely reinstituting their former policy. The new policy was allegedly more expensive after administrative costs, even though it offered similar protection as the original policy. The full cost of the new insurance policy was, of course, passed on to the Gibsons. Their loan contract allegedly allowed World to advance funds on behalf of the borrowers only to the extent necessary to protect World's rights. The action alleges that the amounts World charged to the Gibsons for FOI were too high because they included the cost both of replacement hazard insurance and of administrative services provided to World by the FOI insurer. It also alleges that World falsely represented that the FOI premiums charged were equal to the real cost of that insurance to World. The premium charged to World by Balboa allegedly includes not only the cost of the replacement hazard insurance, but also the administrative costs associated with tracking hazard insurance coverage. Allegedly, the defaulting borrowers were not charged merely for those tracking services relating to their particular loans. Instead, the premiums compensated Balboa for tracking World's entire loan portfolio, including loans to which the FOI program could not apply. The action alleged that World had benefited from those overpayments because World applied them to pay for services that it would otherwise have paid itself as part of its administrative overhead. The trial court concluded at trial that the Gibsons' challenge to World's practice of charging its defaulting borrowers for the entire bundle of services provided to it by Balboa is preempted by federal law, and dismissed the action. That decision was appealed and reversed. In its original dismissal, the trial court stated that if it did not have to dismiss the action, it would have ruled that by charging its defaulting borrowers an insurance premium that includes unrelated tracking costs that benefit only World, World had violated the terms of the Gibsons' deeds of trust and had engaged in unfair business practices under Business and Professions Code section 17200. At Lawcash.com, it is our goal to keep you informed about important legal cases, class actions and settlements. Our lawyers offer free legal evaluations in tort cases, class actions, personal injury, and other lawsuits because we are dedicated to helping you resolve your legal complaints. 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Persons eligible to participate in this action do not need to take any action at the present time.
A class action has been filed against the Hartford Financial Services Group (NYSE: HIG) and certain of its officers and directors by stockholders who purchased the company’s common stock between November 5, 2003 and October 13, 2004. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company’s securities. The stockholders seek to recover compensatory damages for the loss of value of their stock. |
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