WAUKESHA — Does
a title firm have the responsibility to protect its customers from
company is arguing that is indeed the case, filing a lawsuit after
sending a $162,000 check to a scammer instead of the Brookfield
title firm it had been working with on a real estate deal.
Wisconsin LLC filed suit in Waukesha County Circuit Court on
Tuesday, alleging that Merit Title of Brookfield breached its
contract and was negligent in failing to protect Geils from a real
Messages left at
Merit Title and for Geils attorney Joe Abruzzo seeking comment were
not returned Wednesday.
According to the
suit, Geils offered to buy a home from a resident on East Wilson
Street in Milwaukee last fall, and selected Merit Title to be the
closing agent. But, prior to the closing, Geils alleges Merit “had
knowledge or should have had knowledge of a cybercriminal epidemic
whereby hackers target title companies to learn about real estate
transactions occurring and the hackers then send fraudulent wire
instructions to the buyers prior to the closing” and should have
known of preventive steps to protect buyers, the suit said.
In September, a
Merit representative emailed Geils with instructions on wiring the
funds; that and a closing statement were received as unsecure
attachments, the suit said. The next month, Geils got an email from
an address “substantially similar” to that of the Merit agent, with
the exception of one fewer “T” in the “merittitle” domain name,
giving wire instructions that were similar in format, structure and
design to the ones sent by Merit, the suit said.
advice on the fraudulent email, Geils wired $162,433.24 to the
account identified within it, only to learn at closing the funds
were not received by Merit. Geils was able to recover about $80,653
of the wired funds, with Geils out another $81,779, the suit said,
adding that Merit had a “duty to use reasonable care” in managing
the closing that entailed “undertaking steps to protect Plaintiff
from foreseeable harm,” the suit said.