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They cite breach of contract, and one says $588,840 is missing from an escrow account.
Friday, August 23, 2013
Two national insurance companies have filed injunctions against a Roanoke title agency, citing breach of contract and claiming that more than a half-million dollars is unaccounted for.
Fidelity National Title Insurance Co. and First American Title Insurance Co. both filed papers last week in Roanoke against Star City Title, asking that its accounts be frozen and its financial records turned over to them.
Roanoke police began investigating the companies’ accusations Aug. 6, according to spokesman Scott Leamon.
Star City Title has until recently represented the two companies as a local policy issuing agency. Its president, Janet Crosswhite, and its secretary and treasurer, Roanoke lawyer Roy Creasy, who are co-owners, are named as defendants in the matter.
Representatives for all three businesses appeared briefly in Roanoke Circuit Court for a civil hearing Thursday morning, but they broke almost immediately to discuss an interim resolution and did not resume their discussions publicly.
Judge David Carson told them during the hearing that because of Creasy’s longtime history as an attorney, he believed most Roanoke Circuit Court judges would have to disqualify themselves from hearing the case.
Complaints by the two companies said that on June 26, checks issued from Star City Title’s escrow account were returned for insufficient funds.
In one of the complaints, Fidelity claimed that a July 29 audit of the account showed a shortage of $588,840.
“The agents, employees, directors officers and/or other parties of interest … have failed to adequately account for the escrow account shortage,” Fidelity’s complaint said.
On Aug. 1, both companies submitted requests with the Virginia State Corporation Commission, terminating Star City as one of their policy issuing agencies.
First American’s complaint claims that multiple policies were issued with the same number, that deposit amounts were recorded into account ledgers when funds hadn’t actually been deposited, that funds bound for the escrow account were instead put into an operating account and that files have been lost or misplaced.
The complaint filed by Fidelity claims that the shortage leaves insufficient funds to satisfy their intended use, but said it is still trying to learn the scale of the situation.
“Fidelity is uncertain and unable to determine at this early stage in the investigation which real estate transactions have been effected [sic],” the complaint said, arguing to freeze the account: “The continued disbursements of escrow funds to third parties and potential misapplication of funds poses significant risks to Fidelity and its insureds.”
First American is asking for a judgment of $600,000. Fidelity requested damages be determined at trial.
Roanoke attorney Tommy Joe Williams represented Creasy at the civil hearing but did not immediately return calls for comment Thursday.
StellarOne Bank also is being named as a defendant in the case because it handles the escrow account in question.
Star City Title was founded in 1998.
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