liable

<body topmargin=0 leftmargin=0 marginheight=0 marginwidth=0> <table cellpadding=0 cellspacing=0 border=0><tr> <td valign="top" rowspan="2" width=210 BGCOLOR="#006633" TEXT="#F7F7FF" background="132d6c00ddvuru.jpg"> <bR> <bR> <bR> <bR> <bR> <div> <A HREF="prorock_to_conceal_evidence.htm" TARGET="_top" TITLE="prorock"><U>Winnebago County States Attorney Hides White Collar Crime by Prosecuting Senior Citizen Victim</U></A></div> <bR> <div> <A HREF="execs_charged.htm" TARGET="_top" TITLE="Execs charged"><U>Execs Charged In Chicago Trust Fraud Case</U></A></div> <bR> <div>  <a href="http://www.wellsofjustice.org/pdf/ussc 03-05.pdf" target="new">Rooker-Feldman doctrine clarified</a>  </div> <bR> <div> <A HREF="richest_insurance_racket.htm" TARGET="_top" TITLE="Racket"><U>Inside America's Richest</U></A> <A HREF="richest_insurance_racket.htm" TARGET="_top" TITLE="Racket"><U>Insurance Racket</U></A></div> <bR> <div> <A HREF="fidelity_sued.htm" TARGET="_top" TITLE="Realty Times"><U>Suit</U></A><A HREF="fidelity_sued.htm" TARGET="_top" TITLE="Realty Times"><U><B> </B></U></A><A HREF="fidelity_sued.htm" TARGET="_top" TITLE="Realty Times"><U>Seeks Billions From Fidelity</U></A></div> </td> <td valign="top" colspan=2 height=115 BGCOLOR="#0000CC" TEXT="#080000"> <bR> <div> <A HREF="index.htm" TARGET="_top" TITLE="Main"><U><B>Home </B></U></A><A HREF="index.htm" TARGET="_top" TITLE="Main"><U><B>Page</B></U></A><B>  -  </B><A HREF="background.htm" TARGET="_top" TITLE="Background"><U><B>Background</B></U></A><B>  -  </B><A HREF="news.htm" TARGET="_top" TITLE="In The News"><U><B>In The News</B></U></A><B>  -  </B><A HREF="gasb_fraud.htm" TARGET="_top" TITLE="gasb"><U><B>German American State Bank Fraud</B></U></A><B>  -  </B><A HREF="davis_bank_fraud.htm" TARGET="_top" TITLE="davis"><U><B>State Bank of Davis Fraud</B></U></A><B>  </B><FONT SIZE="3" COLOR="#FFFFFF" FACE="Times New Roman" ><B>-  </B><A HREF="records_confirmed.htm" TARGET="_top" TITLE="confirmed"><U><B>Property Title Records Confirmed</B></U></A><B>  -  </B><A HREF="title_fraud__i_.htm" TARGET="_top" TITLE="Bankruptcy Court/Title Company Fraud, Pa"><U><B>Bankruptcy Court/Title Company Scheme (1)</B></U></A><B>  - </B></FONT></div> <div> <A HREF="letter.htm" TARGET="_top" TITLE="letter"><U><B>Letter to Stockholders of FNF</B></U></A><B>  </B><FONT SIZE="3" COLOR="#FFFBF0" FACE="Times New Roman" ><B>-  </B><A HREF="id25.htm" TARGET="_top" TITLE="Conflict of Interest"><U><B>Paul Logli and Conflicts of Interest</B></U></A></FONT></div> <bR> <bR> <bR> <bR> <div> <A HREF="index.htm" TARGET="_top" TITLE="Main"><U><B>Main Page </B></U></A><B> - </B><A HREF="introduction.htm" TARGET="_top" TITLE="Introduction"><U><B>Introduction</B></U></A><B>  - </B><FONT SIZE="4" COLOR="#FFFFFF" FACE="Times New Roman" ><B> </B></FONT><A HREF="background.htm" TARGET="_top" TITLE="Background"><U><B>Background</B></U></A><B> -    </B><A HREF="news.htm" TARGET="_top" TITLE="In The News"><U><B>In The News</B></U></A></div> <div> </div> </td> </tr><tr> <td valign="top" height=365 colspan=2 BGCOLOR="#FFFFFF" TEXT="#080000"> <div> <B>  </B><B> <A NAME="back_to_top"><IMG BORDER="0" SRC="1x1.gif" HEIGHT="1" ALIGN="bottom" WIDTH="1" HSPACE="0" VSPACE="0" ></A></B><FONT SIZE="4" COLOR="#000099" FACE="Times New Roman" ><B>  </B></FONT></div> <bR> <div> http://www.fntagency.com/underwriting%202/00-41.pdf. </div> <div>  </div> <div> <B>FIDELITY NATIONAL TITLE </B></div> <div> <B>CASE LAW UNDERWRITING MEMORANDUM </B></div> <div> <B>Bulletin #00-41</B></div> <div>  </div> <div> FIDELITY NATIONAL TITLE</div> <div> DOUGLAS W. BORCHERT </div> <div> Western Regional Underwriting Counsel </div> <bR> <bR> <div> TO: Chief/Advisory Title Officers Fidelity National Title Company Authorized Agents </div> <bR> <div> FROM: Douglas W. Borchert Northern California Underwriting </div> <bR> <div> DATE: December 20, 2000 </div> <bR> <div> SUBJECT: Baker v Stewart Title of Phoenix 5 P 3rd249 </div> <bR> <div> Friedman induced some 80 investors to acquire investment properties in the Phoenix area. Friedman would open escrow to acquire the property under a fictitious name or a shell limited partnership name. Using these names, he would then sell the properties to partnerships composed of the investors at an inflated price. The investors sued him for fraud and RICO violations and secured a judgment for $8,638,044. The investors also sued the title company, Stewart Title and Trust Company of Phoenix, that had handled some of the escrows on the theory that Stewart was liable because of the misconduct of one of its escrow officers, Bonnie DeAngio. </div> <bR> <div> The trial court had sustained three summary judgments for Stewart holding that Stewart was not liable. The investors appealed the three summary judgments. </div> <bR> <div> <B>THE COURT OF APPEALS DECISION</B> </div> <div> The Court examined three possible theories of liability in reaching its decision: </div> <div> 1. Respondeat Superior- An employer can be held liable for the negligent or tortuous acts of its employee acting within the scope of his or her employment. The conduct falling within this rule is activities the employee is retained to perform within the authorized time and space limits of his or her job. The particular conduct must further the employer’s business, even if the employer has expressly forbidden the particular type of conduct. </div> <bR> <div> The Court said DeAngio was acting within the scope of her employment in opening new escrows. She opened some under fictitious names, which was not illegal unless she knew Friedman was acting with intent to defraud. The Court </div> <div> said that intent might be inferred from the facts. </div> <bR> <div> Indeed, the Court said some of DeAngio’s harmful actions were notarizing documents she knew to be false. Such conduct was suggested by the parties’ depositions. The Court said the plaintiffs had a right to rely on her notarizations. </div> <div> As an escrow agent, DeAngio had a duty to disclose known fraud. The Court remanded the first and third summary judgments to the trial court to determine if DeAngio was liable to certain of the plaintiffs. The Court said that if the plaintiffs could show that DeAngio had acted improperly in their transactions and that her wrongdoing fell within the scope of her employment, Stewart might also incur </div> <div> liability under the fraud and negligence claims relation to these transactions. </div> <bR> <div> 2. Conspiracy- The Court first inquired as to whether DeAngio had committed conspiracy. The Court assumed, without deciding, that her actions in notarizing signatures she knew to be fictitious or false, impersonating people, or backdating deeds of trust could show she conspired with Friedman and others to further his fraud. However, the Court found no cases which held an employer liable for its employee’s conspiracy to defraud under respondeat superior. The Court said the nexus between the plaintiffs was too remote. </div> <bR> <div> 3. RICO under Respondeat Superior- The Court looked at whether Stewart might be held liable for DeAngio’s possible violation of 18 U. S.C. 1962. In discussing her activities with the Darmouth group, a Friedman partnership, the Court said Stewart might be liable for DeAngio’s violation of 1962 (d) if she agreed to facilitate some of the acts leading to the substantive offense. However, the Court found that Stewart was not a co-conspirator. Any possible liability of Stewart had to stem from the doctrine of respondeat superior. </div> <bR> <div> The Court said the doctrine serves two purposes: (1) It encourages employers to monitor their employee’s activities to make certain they are not involved in racketeering </div> <div> activities. (2) It forces employers who benefited from their employee’s RICO violation to compensate their victims. </div> <bR> <div> The Court concluded as to Stewart’s liability for DeAngio’s possible violation of 1962 (d) as follows: </div> <div> DeAngio’s actions are already removed from that of her co-conspirators(although she is still liable for their misconduct) and Stewart Title’s conduct is even more distant. We, therefore, conclude that Stewart Title is not vicariously liable… </div> <bR> <div> The Court held that Stewart could not be liable under respondeat superior for DeAngio’s acts to perpetuate a conspiracy to fraud. </div> <bR> <div> <B>TITLE CONSEQUENCES </B></div> <div> Despite the Court’s rather formidable and complex analysis, this case raises two very practical concerns: </div> <bR> <div> 1. An escrow officer can be held liable personally for fraud and RICO violations. Any request from a customer to engage in questionable activities, especially for under the table compensation, should be looked at askance. </div> <bR> <div> 2. The case makes a strong argument for in house escrow audits at regular intervals. This practice can result in the Company noting activities which may create not only personal liability for the involved escrow officer but also expose the Company to fraud and RICO liability because of the employee’s misconduct. Escrow Administration can provide guidance as to matters to look for in doing in </div> <div> house audits. </div> <bR> <bR> <div> <A HREF="prorock_to_conceal_evidence_back_to_top.htm" TARGET="_top" TITLE="prorock"><U><B>Back to Top</B></U></A></div> <bR> </td> </tr></table></body>