Homeowners Object to $300M Chase Insurance Class Action Settlement

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UPDATE: A federal judge granted final approval to the $300 million JPMorgan Chase Force-Placed Insurance Class Action Settlement on Feb. 28, 2014.

Class Members from a class action lawsuit accusing JPMorgan Chase Bank NA and Assurant Inc. of forcing overpriced hazard insurance policies on homeowners have objected to a $300 million settlement they say unfairly requires Class Members to submit claim forms.

The objectors argued in a motion filed Jan. 21 that the class action settlement was not a product of “informed negotiations” and should be rejected because the Claim Form requirement is an “unnecessary impediment to recovery.”

The Chase force-placed insurance class action settlement was approved by U.S. District Judge Federico Moreno in October. He granted preliminary certification to a nationwide settlement class of borrowers who were subjected to Chase’s lender-placed hazard insurance policy for residential property.

Several of the objecting plaintiffs are also plaintiffs in a similar first-filed class action lawsuit in California. Last year, they unsuccessfully tried to intervene in the Florida action to halt the $300 million class action settlement, arguing that such a deal would put an end to their hopes of establishing a nationwide class.

Their recent objection to the Chase insurance class action settlement argues that the Claim Form requirement is unnecessary because JPMorgan Chase can easily determine how much the borrowers paid each year for force-placed insurance policies without individual Class Members submitting Claim Forms.

“The real reason for requiring all Class Members to submit a claim form appears to be an effort to reduce the actual/final payout by Defendants,” they said in their objection to the class action settlement. The objectors point to a similar force-placed hazard insurance settlement involving a Florida-only class of Wells-Fargo borrowers, in which less than 10 percent of Class Members who received notice of the class action settlement submitted timely Claim Forms.

The objectors also take issue with the fact that the deadline to submit Claim Forms will not run until 60 days after the class action settlement receives final approval. With this timeline, the return rate of the Claim Forms cannot be established until it is too late to modify the agreement to maximize participation. The objectors requested that the terms of the class action settlement be modified to set an earlier date for the submission of the Claim Forms. They also asked that the court “refuse to approve any aspect of this settlement until the final accepted claims-rate is known,” because the claims rate is critical to determine whether the proposed class action settlement is fair and reasonable.

In addition, the objectors disputed JPMorgan Chase’s ability under the terms of the class action settlement to unilaterally reject any claim they deem inadequate without providing Class Members an opportunity to cure the alleged defects.

The Final Fairness Hearing for the JPMorgan Chase force-placed insurance settlement has been scheduled for Feb. 14, 2014. Detailed claim filing instructions can be found here. The deadline to file a claim will be 60 days after the settlement is approved and becomes effective.

The plaintiffs objecting to the class action settlement are represented by Adam M. Moskowitz, Harley S. Tropin, Tucker Ronzetti, Rachel Sullivan and Robert J. Neary of Kozyak Tropin & Throckmorton PA; Aaron S. Podhurst and Peter Prieto of Podhurst Orseck PA; and Lance A. Harke, Sarah Engel and Howard Bushman of Harke Clasby & Bushman LLP.

The JPMorgan Chase Force-Placed Insurance Class Action Lawsuit is Salvatore Saccoccio, et al., v. JPMorgan Chase Bank NA, et al., Case No. 1:13-cv-21107, in the U.S. District Court for the Southern District of Florida.