Title insurance industry, NYS argue wining-and-dining before appellate court

Attorneys for both sides spoke briefly before a panel of judges on Tuesday

TRD New York /
Oct.October 09, 2018 04:00 PM

27 Madison Avenue with Mylan Denerstein (blue) and Maria Vullo (yellow) (Credit: Mapio and Gibson Dunn)

The legal battle between the title insurance industry and the state’s Department of Financial Services continued on Tuesday, as attorneys for both sides made brief arguments before the Appellate Division of the New York State Supreme Court.

The parties are continuing to fight over strict new regulations that DFS had imposed on title insurance companies in an attempt to crack down on excessive schmoozing in the industry. Title insurance companies had filed suit against DFS over these regulations in February, arguing that they would decimate their business.

The parties previously argued before New York State Supreme Court Judge Eileen Rakower in June, and she ruled in favor of the title insurance industry in July, annulling what she described as the state’s “absurd” regulations.

DFS filed an appeal of the ruling in August, and both sides rehashed their arguments before a panel of judges Tuesday afternoon.

Steven Wu, arguing for New York State, stressed that DFS was acting within its authority to regulate the title insurance industry. He said the rules only represented an attempt to ensure that real estate companies and executives decide which title insurance company to go with based on the merits, not based on who can offer them the best trip to the Bahamas.

“The problem posed with these types of inducements is that they have independent effects on the decision making of the real estate professionals,” he said.

Gibson Dunn’s Mylan Denerstein, who argued on behalf of the title insurance companies, maintained that the state’s language was far too broad in terms of what it considered corrupt or unsavory business practices.

“I’m not suggesting there’s no other valuable thing that could be considered a quid pro quo,” she said. “In this case, taking somebody out to lunch and establishing a relationship, that’s not a quid pro quo.”

Although Rakower had more aggressive questions for the state than the title insurance industry during the arguments in her courtroom, the panel of judges on Tuesday sharply interrogated each side, repeatedly interrupting both attorneys with questions and clarifications.

The state and title insurance industry will both now await the Appellate Court’s ruling on whether Rakower’s decision will be upheld or overturned.


Related Articles

arrow_forward_ios
348 Court Street (Photo by Justin Heiman/Getty Images)

Collapses raise questions about safety-law exemption

Collapses raise questions about safety-law exemption
Senate Minority Leader Chuck Schumer and Senate Majority Leader Mitch McConnell (Schumer by Tasos Katopodis/Getty Images; McConnell by Ting Shen/Xinhua via Getty)

Schumer v. McConnell on SALT: Who’s gonna give?

Schumer v. McConnell on SALT: Who’s gonna give?
From left: Jared Kushner, 715 Park Avenue, Deutsche Bank CEO Christian Sewing, and Rosemary Vrablic (Credits: Kushner by BRENDAN SMIALOWSKI/AFP via Getty Images; 715 Park via Google Maps; Sewing by by Thomas Lohnes/Getty Images; Vrablic by PAUL LAURIE/Patrick McMullan via Getty Images)

Apartment sale to banker for Trump and Kushner probed

Apartment sale to banker for Trump and Kushner probed
Assemblyman Harvey Epstein and Senator Brad Hoylman (Epstein by Erik McGregor/LightRocket via Getty Images; Hoylman by Roy Rochlin/Getty Images)

Lawmakers introduce bill to keep rent regulation alive

Lawmakers introduce bill to keep rent regulation alive
China’s housing market is into bubble territory

There are fears of a great housing bubble in China

There are fears of a great housing bubble in China
Governor Andrew Cuomo (Getty, iStock)

What NYC’s phase 4 means for real estate

What NYC’s phase 4 means for real estate
Hong Kong

Foreign firms are vacating Hong Kong offices like never before

Foreign firms are vacating Hong Kong offices like never before
Mayor Bill de Blasio (Getty, Wikimedia)

Landlords challenge city laws protecting non-paying businesses

Landlords challenge city laws protecting non-paying businesses
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...