Unjustice Enrichment

[xyzeon]

Texas -
Got an interesting question and would like to seek advise from both side of story - Good and Bad. Here it is ...

During the purchase of a home, a well known Title Company had mistakenly double paid Texas Fair Plan Association (govern by state of Texas) an insurance premium on behalf of the purchaser on the house. The double payment came in this manner
1) During closing - rightful transfer of funds from purchaser to Texas Fair Plan Association
2) One month after closing, the Title Company paid Texas Fair Plan Association the 2nd time on the same transaction

Texas Fair Plan having the premium paid twice refunded one of the premium to the Purchaser. Texas Fair Plan is governed by Texas Law and is believed to only refund the premium to the homeowner only. Texas Fair Plan issued a letter to the Purchaser requesting the purchaser to reimburse the premium to the Title Company.

In this case the Title company suffer a lost of the premium.
1) Does the Title Company have claims over the purchaser who is unjustly enriched? What is the best way to recover the funds? Through small claim court?
2) Technically the purchaser own a extra premium to the Texas Fair Plan not to the Title company. Does the letter of reiumbursement request constitute a valid document to assign the rights to those funds to the Title Company?
3) The Title Company used a debt collector to pursue the premium. The tile company claims that this is a debt to the Title Company, is this valid? There is not a judgement but just a one sided claim. Why yes? or Why no?

Any inputs would be deeply appreciated.

Please help....

 

[Chien]

Does the Title Company have claims over the purchaser who is unjustly enriched?

Yes, as far as I’m concerned. Title Company sues Fair Plan. Fair Plan either assigns its right to reimbursement against purchaser or pays and sues purchaser for indemnification. Easiest solution for Title Company is name them both and let Fair Plan cross-complain against purchaser. One way or the other, Title Company gets paid and purchaser pays or gets judgment and incurs attorneys’ fees

What is the best way to recover the funds? Through small claim court?

I’m not immediately sure of statutory limits on TX Small Claims, and you don’t mention the amount in contention. Also don’t know the TX position on multi-party litigation in Small Claims, if you decided to name them both. Same is true for attorneys in Small Claims. Whatever the answers, if I’m Title Company and don’t have an existing assignment from Fair Plan, I go for the highest court that I can. Reason? I want all my procedural rights and, if purchaser is going it alone, I want to make that hard.

Does the letter of reimbursement request constitute a valid document to assign the rights to those funds to the Title Company?

Do you mean the letter telling purchaser to pay Title Company? Haven’t seen it but not likely. Still, that’s an easy step away. If purchaser pays Title Company, purchaser should get a Release from both.

The Title Company used a debt collector to pursue the premium. The tile company claims that this is a debt to the Title Company, is this valid?

Valid? Hard to say on the information posted. Legally correct? Yes. Owed by Fair Plan? Technically correct, unless there has already been an assignment, which would be the smart thing for Fair Plan to do. Not being familiar with Fair Plan and what their legal status would be throughout, it’s hard to say if “valid” would be proper but, again, that’s an easy step away and one that use of a CA may suggest has been taken already.

There is not a judgment but just a one sided claim. Why yes? or Why no?

What? No litigation = no judgment (yet). Sounds like Fair Plan has a claim against purchaser. Knowing more about Fair Plan may mean Title Company has a claim against purchaser (or will have). I’d agree that it’s one-sided. Purchaser hasn’t got a claim.

 

[xyzeon]

unjustly enriched

Next Questions:
1) Unless a judgement is rendered against the Purchaser, the claim from the Title company indirectly against the Purchaser does not constitute debt. Is that correct? Title company can only show a series of events but not direct debtor and creditor contract or relationship as evidencial support. ...What does validating do to the debt in this case? The collector will provide whatever they will have but it does not prove debt....

2) The deal is only about $2k, is there a max on attorney fee that the Title company can charge?

3) The Purchaser respond to the debt collection effort that the Purchaser will be happy to refund the money back to Texas Fair Plan but not to the Title company if Texas Fair Plan send the Purchaser a Demand for payment, does that satisfy its oblication? Technially, the purchaser needs to protect itself from paying twice to both the Title company and Texas Fair Plan. ie After paying the Title company, before the Texas Fair Plan made the 2nd repaymenty and inturn request for payment from Purchaser...how does Purchaser prevent this from happening?

Please help.....

 

[Chien]

Now we into the hard stuff?

Unless a judgment is rendered against the Purchaser, the claim from the Title company indirectly against the Purchaser does not constitute debt. Is that correct?

Interesting question, but I think we’re splitting legal and semantic hairs. By the most common definitions of debt, I probably would have agreed with you when it happened, but I want to emphasize two things: I haven’t researched and don’t know the legal status of Fair Plan in this tripartite arrangement and my assumption is that either Title Company has a legal claim by virtue of Fair Plan’s status or because Fair Plan has already assigned it’s rights. I make that assumption because an assignment is the first thing that I would counsel Fair Plan to offer and because I see no legal basis for Title Company getting a CA on purchaser, if it didn’t have a legal claim. If A has a legal claim against B and B has an equal legal claim against C, A can’t assert it’s claim directly against C simply because it’s convenient.

What does validating do to the debt in this case?

My assumption is that the CA tells the purchaser that a debt is owed to Title Company and provides the address. It doesn’t have to say more or why. And incidentally, if the foregoing analysis is correct, I also think the CA can report the debt to a CRA.

The deal is only about $2k, is there a max on attorney fee that the Title company can charge?

I’m doing this without checking. I’d like to do that and you’re looking for an answer. In my own state, the dollar amount would control a statutory maximum, if there was no contract providing for fees. If there was one, fees would be a function of the contract provision. Not much of an answer, but the best that I can do. The only other thing I could say is that it wouldn’t make good sense to get into much litigation for $2K, if there was a fees provision. Fees could exceed the amount in contention and probably would.

Technially, the purchaser needs to protect itself from paying twice to both the Title company and Texas Fair Plan. ie After paying the Title company, before the Texas Fair Plan made the 2nd repaymenty and inturn request for payment from Purchaser...how does Purchaser prevent this from happening?

I have tried, but I don’t understand this question. The best that I can come up with doesn’t address it. If I were purchaser, I would expect to get sued, absent voluntary repayment. For the reasons stated, I would expect to be sued by Title Company. If I wished to avoid suit, which I am almost certain to lose, whether Fair Plan is part of it or not, I would tender repayment to Title Company on condition that I got a Release of all claims, known and unknown, from Title Company and Fair Plan. I would expect both to be willing, because Title Company just wants to be paid for it’s original mistake and Fair Plan just wants out of the middle of things. With my Release, I’m protected from both, now and in the future.

 

[xyzeon]

Thank you!!!

It is very helpful