Wells Fargo Borrowers Lose on Breach of Fiduciary Duty Claim
Posted on Jan 01, 2016
Borrowers of Wells Fargo Bank NA filed a lawsuit against the lender, alleging claims of breach of contract, conversion, unjust enrichment, and breach of fiduciary duty. The claimants, however, suffered a loss in their lawsuit when U.S. District Judge Michael Simon threw out the breach of fiduciary duty claim. In their lawsuit, the borrowers allege that the lender charged inflated premiums when it placed property insurance on homes in which coverage had lapsed. They further allege that the premiums were inflated in order to cover unearned commissions and bundled administrative costs that cannot be properly charged to the consumer.
The borrowers involved in the lawsuit are seeking class-action status. They allege that the bank forces members of the class to buy and maintain flood insurance in amounts that go beyond those required under U.S. law. They also accuse the lender of requiring the class members to purchase flood insurance that is in amounts that are greater than the bank’s secured property interests.
In New York, to prove a breach of fiduciary duty claim, a petitioner typically must demonstrate one or more of the following:
- A fiduciary duty existed.
- The fiduciary did not place the best interest of the beneficiary above his or her own self-interest.
- The fiduciary breached a duty of good faith.
- The fiduciary breached a duty of loyalty.
- The fiduciary engaged in self-dealing.
To learn more about breach of fiduciary duty and other New York breach of contract matters, contact an experienced New York business litigation attorney today. Call our office at 888-497-3410 for a free consultation.