DOC Title Affiliate Enforcement Update: Have you checked the mail lately? More DOC enforcement letters have been sent out. January, 2008 By: Stephen J. Nash Nash & Lodge, PLLP nash@nashandlodge.com In the last Newsletter, we informed you that the Minnesota Department of Commerce (DOC) took their first action moving forward against those who refused to settle. Approximately seven people received subpoenas seeking information and documents. The subpoenas were generic and sought information and documents that most affiliate owners would not have. In that Newsletter it was pointed out that the DOC was still stating that they were going to send enforcement letters to all former First American Title affiliate owners and speculated that the DOC may start sending out enforcement letters again. On January 15, 2008, the first new batch of DOC enforcement letters were sent out for the first time since early June of 2007. As in the past, it is apparent that they are continuing their strategy of sending out a small number of enforcement letters to isolate and intimidate the recipient into settling. As many of you are aware, Nash & Lodge represents a large number of former First American affiliate title owners who have chosen to contest the allegations made by the DOC. At this time, there are 121 members in the Defense Group of which approximately one half of whom have already received a DOC enforcement letter. The main focus of the Defense Group is to negotiate a settlement where there is a clear admission of guilt. While the DOC says that their proposed settlement is intended as a non-admission of guilt settlement, the fact is that they refuse to agree to a settlement that clearly states that there is no admission of guilt. If they truly intend the settlement to be a non-admission of guilt, why won’t they clearly state so in writing? The issue of admitting to guilt is important to the Defense Group for a number of reasons: The members do not believe that they are guilty of the DOC allegations; There is a fear that the DOC will use the settlements to show how “tough” they are and doing such a great job of getting the “bad” guys—the Defense Members do not want to be lumped in with the people that truly are doing horrible things such as fraud; There is a fear that if the member ever has a future violation (and in this environment nobody can be confident that they never will have to deal with the DOC again) will the DOC be tougher on them because they are now a “second time” offender?; There is a fear of future lawsuits against the affiliates and their owners whereby the settlements will be used against them; There is a fear of the consequences of settling when applying for any type to license either in Minnesota or elsewhere how do you explain this settlement? From the outside, the allegations in the settlement agreement appear to be extremely serious. I have already spoke to one person applying for a license in another state who has run into this problem; There is a fear that other agents will use the settlement against them. If you get a letter from the DOC on this or another matter do not panic, seek legal advice so that you can make a knowing decision on whether to fight or settle. Don’t rely on the DOC because they will tell you that they don’t negotiate (they do), that they can increase the fines (they can but generally haven’t) and that you can’t win (you can). If you are interested in joining the Joint Defense Group or just want additional information, e-mail Steve Nash at nash@nashandlodge.com.   NOTICE The foregoing is not intended to constitute legal advice for any specific circumstance, but is intended to reflect broadly applicable principles, under Minnesota law, relevant to a typical situation. Each set of facts and each contract are, or can be unique; the unique facts and specific language of the contract may require a different legal analysis and may result in a different outcome. Before proceeding in reliance upon this or any other general description of law, consult with an attorney competent in the field of practice relevant to your situation. Copyright 2008 Nash & Lodge, PLLP