We recently achieved a significant victory in a non-binding arbitration proceeding within a wire-fraud case brought on behalf of our clients–homebuyers who lost tens of thousands of dollars as a result of a devastating example of wire fraud in the process of their real estate closing.
The Case at Hand
Our clients entered into a contract to purchase a home in Florida and were instructed to wire closing funds to the designated escrow agent. Relying on email communications sent by the escrow agent’s address, as part of a chain of communications that, neither before or after, called the wire instructions into question, they transferred approximately $40,000. However, unbeknownst to them, the funds were ultimately diverted to a fraudster.
We filed suit asserting claims for negligence and breach of fiduciary duty, based on the title company’s failure to implement basic, industry-standard safeguards to prevent precisely this type of loss, as well as their failure to identify and notify our clients of such breach. After being filed, the judge overseeing the case mandated that the parties engage in non-binding arbitration to try to narrow the issues, and see if a resolution could be met.
What is Non-Binding Arbitration?
Non-binding arbitration is a structured dispute resolution process where a neutral third party hears evidence and issues a decision—but that decision is not final. Either party can reject it and proceed to trial. For business owners and other parties, it’s a strategic tool: it provides an early, cost-effective preview of how a case may be evaluated, often facilitating settlement while preserving full litigation rights.
The Decision
At this non-binding arbitration, the arbitrator largely agreed with our client’s position. In a detailed award, the arbitrator found that the title company breached its duty by failing to implement and communicate adequate procedures to safeguard client funds. Notably, there was no evidence of written policies, secure communication protocols, or meaningful warnings to the buyers about verifying wire instructions. These failures constituted negligence under Florida law.
This case underscores a critical and often misunderstood reality: title and escrow agents have real, enforceable duties to protect individuals and businesses in an era where wire fraud is rampant.
If you’re facing a similar situation or want to discuss other legal matters that may impact your business, contact one of our experienced attorneys in South Florida at 305-570-2208.
You can also contact our team directly at: arianna@ayalalawpa.com
Schedule a case evaluation online here.
[The opinions in this blog are not intended to be legal advice. You should consult with an attorney about the particulars of your case].
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