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

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

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
From left: Letitia James, Donald Trump and Brett White (Photo Illustration by Steven Dilakian for The Real Deal with Getty Images)
Cushman delivers 36K documents to AG in Trump probe
Cushman delivers 36K documents to AG in Trump probe
Queens official Donovan Richards, Larry Silverstein and rendering of Innovation QNS (Queens Borough President, Innovation QNS, Getty)
Queens boro prez turns on industry, rejects Silverstein’s $2B project
Queens boro prez turns on industry, rejects Silverstein’s $2B project
Cea Weaver (Getty)
Cea Weaver pokes landlords’ hive over rent reform
Cea Weaver pokes landlords’ hive over rent reform
United States Representative James Clyburn (Getty Images)
Four corporate landlords used “abusive tactics” in pandemic evictions: House committee
Four corporate landlords used “abusive tactics” in pandemic evictions: House committee
Senator Chuck Schumer and Senator Joe Manchin (Illustration by Kevin Cifuentes for The Real Deal with Getty)
Manchin-Schumer deal closes real estate tax loophole
Manchin-Schumer deal closes real estate tax loophole
Hudson Yards, Related Companies' Stephen Ross, Vornado’s Steven Roth and SL Green’s Marc Holliday (Getty, Related, Vornado, SL Green)
Developers all-in on Manhattan casino push
Developers all-in on Manhattan casino push
Fried Frank, City Planning, politics
Former City Planning chief Anita Laremont to join Fried Frank
Former City Planning chief Anita Laremont to join Fried Frank
Jay and Stuart Podolsky with the Marcel in Gramercy at 201 East 24th Street (Getty, Google Maps)
Controversial Podolsky brothers ink more city business
Controversial Podolsky brothers ink more city business
arrow_forward_ios

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

Loading...