A federal judge gave his preliminary approval Wednesday to a class action settlement agreement between Citibank and a group of plaintiffs who claimed the bank required them to purchase excess insurance against floods, wind damage and other hazards.
The order, signed by Northern District Judge David Hurd (See Profile) in Casey v. Citigroup, 5:12-cv-820, declares that the proposed settlement is “fair, reasonable and adequate.” It sets out procedures and schedules for notifying members of the class about the settlement and how they can apply for reimbursement.
Under the settlement, Citibank will make $110 million available to compensate consumers for what plaintiffs maintain was the excessive insurance the bank required some mortgage-holders to purchase between 2006 and February 2014 (NYLJ, Jan. 4, 2013).
Hurd’s order designates Nichols Kaster of Minneapolis, Berger & Montague of Philadelphia and Gilman Law of Bonita Springs, Fla., as co-lead class counsel and Taus Cebulash & Landau of Manhattan as additional class counsel.
The judge set June 27 at 10 a.m. for a final hearing on the settlement at the federal courthouse in Utica.
Citibank said federal law mandates that some mortgage-holders carry special hazard insurance, depending on whether their property is in a flood plain or in another area where it is at higher risk of damage. The company denies the plaintiffs’ contention that it received commissions on the insurance coverage.