The effect of the holding by a U.S. District Judge in South Florida is that regulators approved kickbacks as part of an insurance rate, and so homeowners must pay for the force-placed kickbacks as part of their insurance premiums.
The ruling came in the case of Trevathan v. Select Portfolio Servicing, Inc., No. 15-61175-CIV-DIMITROULEAS/SNOW, ___ F. Supp. 3d ___, 2015 WL 6913144 (S.D. Fla. November 6, 2015). In that case, the District Judge apparently did not find any claim he liked that was alleged in the plaintiff-homeowner's complaint because the District Judge granted all the defendants' motions to dismiss all the claims alleged.
The homeowner's claim based on the alleged kickbacks was dismissed with prejudice. The District Judge's ruling was based on the filed rate doctrine. In effect, the District Judge accepted the defendants' argument that since the insurance company among them filed for regulatory approval of a rate which all of the defendants say included kickbacks, that all the defendants thereby became immune from suit over the kickbacks and the homeowner in this case must pay for force-placed kickbacks because the Florida Office of Insurance Regulation approved the kickbacks, the Judge ruled. Trevathan v. Select Portfolio Servicing, Inc., No. 15-61175-CIV-DIMITROULEAS/SNOW, ___ F. Supp. 3d ___, 2015 WL 6913144, at *2 - *3 (S.D. Fla. November 6, 2015).
The District Judge in part based his ruling in this regard on the discredited Rothstein decision of a Second Circuit panel in July. See Dennis J. Wall, "Force-Placed Insurance / Filed Rate Doctrine Imported From Utilities Regulation to Insurance Law / Second Circuit Court of Appeals Panel Applies Doctrine to Texas, New Hampshire, and New York Lender Force-Placed Insurance Practices / Rothstein v. Balboa Insurance Co., 794 F.3d 256 (2d Cir. 2015), 37 Insurance Litigation Reporter 435 (October 6, 2015). A reprint of this publication © Thomson Reuters, reprinted with permission, is available at www.lenderforceplacedinsurance.com.
Please Read The Disclaimer. ©2015 by Dennis J. Wall, author of "Lender Force-Placed Insurance Practices" (American Bar Association 2015). All rights reserved.
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