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Fountainhead Title Group and mortgage lender Premier Financial Co. have reached a preliminary settlement in two class-action lawsuits alleging they set up a fake company that charged mortgage borrowers for services they never received.
The proposed settlement received preliminary approval from U.S. District judge William M. Nickerson May 10. It requires the companies and now-defunct joint venture PFC Title LLC to pay $915,000 into a settlement fund, from which borrowers will receive up to $620.50 each. The companies also agreed to a consent order that restricts them and their principals from setting up firms together in the future.
"We think it's a superb resolution," said Richard L. Gordon of Quinn Gordon & Wolf (www.quinn-law.com), co-counsel for plaintiffs in the suits.
Fountainhead and Premier representatives denied any wrongdoing. "The cost of proving we're right was more than the cost of the settlement," said Stephen Kaiser of Kaiser Associates, a spokesman for Fountainhead, the state's largest title company.
"While Premier Financial does not agree with any of the plaintiffs' claims, Premier Financial has made a sound business decision to settle the cases in order to put the matter behind it," said Premier's attorney, Brian L Moffet of Gordon Feinblatt Rothman Hoffberger & Hollander LLC.
The legal battle began in April 2003, when plaintiffs Florence and Woodrow Gray and Jackie S. Mason sued Fountainhead, Premier and PFC in Circuit Court for Baltimore City. The Gray suit said Fountainhead (www.fountainheadtitle.com) and Premier set up a company - PFC, which did business as...