An administrative law judge in St. Paul is recommending that the owner of Scenic Title & Abstract be disciplined for failing to remit title insurance premiums in the last four years.
Kevin Eckholm, owner of the now-closed title company in Duluth and Two Harbors, was accused in October of fraud and operating without proper licenses after an investigation by the Minnesota Department of Commerce. Eckholm was then accused of collecting title insurance premiums 237 times dating to 2006 and failing to submit that money to the title insurance company.
Judge Eric L. Lipman concluded after a hearing in late October that in "nearly 100 separate transactions" Eckholm failed to "maintain sufficient account balances so as to timely remit premiums to Land America."
Eckholm "improperly withheld monies Scenic Title received during the course of doing insurance business," Lipman said. Scenic Title had not remitted $25,900 to Land America, an affiliate of Fidelity National Title Insurance Company, court documents show.
Scenic Title says its lapses don't warrant disciplinary measures.
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"Nothing got proved at that trial except that we owe this amount of money, and we intended to pay it," said Sharyn Hill, Eckholm's mother and co-founder of Scenic Title.
The judge recommended that the Minnesota Department of Commerce discipline Eckholm based on his three licenses to work. Hill and Eckholm's wife and co-worker, Linda Eckholm, were exonerated.
The Commerce Department must wait 10 days before issuing any discipline order against Scenic. In the meantime, Scenic can file exceptions and present argument to the commissioner, court documents say.
Title insurance is packaged with the purchase of property to protect new owners or their lenders against unforeseen challenges to their ownership. Minnesota Department of Commerce officials said purchasers of title insurance through Scenic Title should not worry about insurance coverage.
"It would be fair to say that they all have title insurance," Rochelle Barnhart, a former department spokeswoman told the News Tribune in October. "So there is no repercussion to those customers at all."
