Philadelphia, PA, July 12, 2012. On Wednesday, July 11, 2012,
Judge Michael Simon of the United States District Court for the
District of Oregon issued a ruling that permitted the Plaintiffs'
breach of contract claims to proceed in a nationwide class action
alleging that Bank of America (NYSE: BAC) improperly force-placed
high-premium flood insurance policies on homeowners across the
In their Complaint, Plaintiffs Ronda and Larry Arnett allege
that Bank of America has a practice of force-placing flood
insurance coverage above the amounts required by borrowers'
mortgage contracts and by federal law. Bank of America asked the
Court to dismiss the case, asserting that its mortgage contracts
with borrowers permit it to force-place high premium flood
insurance coverage in any amounts that it deems necessary. The
Court denied Bank of America's motion to dismiss and decided that
Plaintiffs' claims alleging breach of contract and conversion of
funds should proceed to trial.
"When it comes to flood insurance, Bank of America and other
companies in the mortgage servicing industry have engaged in a
classic bait-and-switch, in which borrowers are informed of one set
of flood insurance requirements at closing and then, later, Bank of
America demands additional, unwarranted flood insurance coverage,"
said Shanon Carson of Berger & Montague, P.C., one of the lead
attorneys for the Plaintiffs. "Through this scheme, Bank of America
has harmed tens of thousands of consumers by force-placing
excessive and unnecessary flood insurance at extraordinarily high
prices. Moreover, each time Bank of America force-places flood
insurance policies on its borrowers it receives a kickback from the
flood insurance companies with whom Bank of America has an
"All homeowners in the United States with mortgage loans
serviced by Bank of America who have been force-placed with flood
insurance policies are potentially affected by the Court's decision
in this case," added Brett Cebulash, another of the Plaintiffs'
attorneys. "By virtue of this decision, they will now have their
day in court."
A similar case, brought on behalf of Bank of America borrowers
with home equity lines of credit ("HELOCs"), that also alleges
abuses in the force-placement of flood insurance, has been brought
by the same group of plaintiffs' attorneys and is also pending
before Judge Simon in the United States District Court for the
District of Oregon.
Borrowers who have been subjected to force-placed insurance
policies and customers of Bank of America who are potentially
affected by this decision can obtain additional information by
calling Shanon J. Carson, Esq. at (215) 875-4656 or Patrick F.
Madden, Esq. at (215) 875-3035, both of the law firm, Berger &
Montague, P.C. Mr. Carson and Mr. Madden can also be contacted by
email at email@example.com or firstname.lastname@example.org.
The Plaintiffs in this case, Arnett, et al. v. Bank of America,
N.A., Civil Action No. 11-cv-1372 (D. Or.), are represented by the
law firms of Berger & Montague, P.C., Taus Cebulash &
Landau LLP, and Stoll Stoll Berne Lokting & Shlachter P.C.
Berger & Montague, P.C., based in Philadelphia, PA, consists
of over 60 attorneys who represent plaintiffs in complex and class
action litigation. The firm's Consumer Protection and Insurance and
Financial Products & Services Groups have extensive experience
in representing homeowners, consumers and borrowers in class action
litigation against banks and insurers, and the firm has played lead
roles in major cases for over 40 years resulting in recoveries of
over $22 billion for their clients and the classes they represent.
On the Web: www.bergermontague.com. Taus, Cebulash & Landau,
LLP, based in New York City, specializes in complex consumer and
antitrust class action litigation. Brett Cebulash and Kevin Landau,
the two TCL partners involved in this matter have 35 years of
combined experience in complex litigation and can be reached at
(212) 931-0704 or via e-mail at email@example.com or
firstname.lastname@example.org for more information.
Berger & Montague, P.C. and Taus Cebulash & Landau, LLP
are currently pursuing lawsuits against numerous lenders and
servicers in the mortgage industry who are alleged to have engaged
in practices similar to Bank of America regarding force-placed
hazard insurance and force-placed flood insurance, including Wells
Fargo, JPMorgan Chase, Citizens Bank, Citibank, GMAC, and
Shanon J. Carson
Berger & Montague, P.C.
1622 Locust Street
Philadelphia, PA 19103
Telephone: (215) 875-4656