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Another court in the Eleventh Circuit has "distinguished" an Eleventh Circuit panel's Feaz decision which rested on unique Alabama fiduciary law. In actuality, the District Court rightly distinguished Feaz completely out of relevance to lender force-placed insurance practices except, perhaps, those practices permitted under Alabama law, in Edwards v. Green Tree Servicing, LLC, No. 5:15cv148-MW/GRJ, 2015 WL 6777463, at pp. *7, *9 (N.D. Fla. October 22, 2015):
Moreover, Feaz [v. Wells Fargo Bank, N.A., 745 F.3d 1098 (11th Cir. 2014)] does not, as Green Tree Servicing argues, preclude the claim. Feaz did not address a claim similar to the Edwards', as Feaz's implied-duty claims against Wells Fargo concerned the amount of insurance that was force-placed, rather than the choice of a policy that included “kickbacks” in the price. Feaz, 745 F.3d at 1110. Moreover, Feaz was decided under Alabama law. Under Alabama law, unlike Florida law, “‘sole discretion’ means an absolute reservation of a right[;][i]t is not mitigated by an implied covenant of good faith and fair dealing in contracts.”
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Green Tree's reliance on Feaz is, again, unpersuasive. Feaz dealt with a claim of breach under fiduciary duty under Alabama law which, unlike Florida law, does not contain an exception for “special circumstances” that create a fiduciary relationship that would not otherwise exist.
A related holding in the Edwards decision is commented on, in an article which was published on Insurance Claims and Issues Blog on Monday, November 9, 2015.
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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