SOURCE: Nichols Kaster, PLLP
June 29, 2010 12:29 ET
Consumers Led by Nichols Kaster, PLLP Bring Suit Against Chase for Deceptively Requiring Excessive Flood Insurance Coverage
NEW YORK, NY--(Marketwire - June 29, 2010) - On June 17, 2010, Plaintiff Lloyd Warren III filed a class action lawsuit against Chase Home Finance, LLC and JPMorgan Chase Bank NA, in the U.S. District Court in the Southern District of New York, alleging that Chase deceptively required him and other similarly situated consumers to purchase and maintain flood insurance coverage in amounts greater than required by law or necessary to cover their loan balance. Plaintiff seeks to represent a class of consumers who obtained from Chase loans or lines of credit secured by property held in New York and who were also required to obtain flood insurance.
According to the Complaint, Plaintiff Warren obtained a line of credit from Chase secured by his property, and Chase required that Warren obtain flood insurance to cover the available credit line on his loan. During the financial crisis, Chase reduced Warren's credit line and subsequently authorized Warren's request for a corresponding reduction in flood insurance coverage. Soon after, however, Chase retracted this authorization and demanded that Warren obtain even more coverage than originally required, in an amount more than three times his principal balance and credit line. In so demanding, Chase misrepresented federal flood insurance requirements and informed Warren that, if he did not obtain coverage at the newly required amount, Chase would force coverage on Warren in an amount likely higher than the going market rate. The Complaint alleges that Defendants breached their duty of good faith and fair dealing and violated the New York General Business Law section 349 and the federal Truth and Lending Act.
"Chase is unilaterally altering the terms of consumers' loans without adequate notice, and is misrepresenting federal flood insurance requirements in the process," comments Paul J. Lukas, attorney for the Plaintiff. "Chase has no business requiring that consumers maintain flood insurance in amounts greater than Chase's interest in their property. Yet, Chase is doing just that, and they're forcing exorbitant flood coverage on those who do not comply in the process. This practice violates basic consumer protection laws."
The case is entitled Warren v. Chase Home Finance, et al.., No. 1:10-cv-04718-DAB (S.D.N.Y.) (filed June 17, 2010). Plaintiff is represented by Paul J. Lukas, Rebekah L. Bailey, and Kai H. Richter from Nichols Kaster, PLLP, which has offices in Minneapolis, Minnesota and San Francisco, California. Additional information is located at www.nka.com or may be obtained by calling Nichols Kaster, PLLP toll free at (877) 448-0492.