Scenic Title hit with fraud chargesA family-owned and operated title insurance agency in Duluth and Two Harbors has been accused of fraud and operating without proper licenses by the Minnesota Department of Commerce.
By: Andy Greder and Matt Suoja, Duluth News Tribune
A family-owned and operated title insurance agency in Duluth and Two Harbors has been accused of fraud and operating without proper licenses by the Minnesota Department of Commerce.
Scenic Title & Abstract Inc. is accused of collecting premiums from clients on behalf of Fidelity National Title Insurance Co. and never sending the collections to Fidelity. The title company, owned by Kevin Eckholm, is accused of failing to submit premiums in 237 instances in the past four years, court documents show.
The commerce department has suspended the abstractor licenses of Eckholm and his mother and co-founder, Sharyn Hill, and the notary licenses of Eckholm, Hill and Eckholm’s wife, Linda Eckholm.
“When a company and its employees fail to meet their financial obligations, public trust and confidence is seriously undermined, and customers of the company are harmed,” Glenn Wilson, commissioner of the Minnesota Department of Commerce, said in a prepared statement.
People buy title insurance when they buy property to protect themselves or their lenders against unforeseen challenges to their ownership, such as a relative of a previous owner who comes forward years later with a claim that they were promised a share of the property.
If your title insurance premium was not paid, that doesn’t mean there’s something wrong with your title. But you probably would not be protected if a challenge did come up, Duluth real estate attorney Michael Lien said. So if you discover your premium was never paid, he said, you should look into getting title insurance.
Scenic Title’s offices at 618 First St. in Two Harbors and 323 W. Superior St. in Duluth were closed Monday. Hill and the Eckholms could not be reached for comment.
The allegations come from an investigation Sept. 17-18 into the Duluth and Two Harbors operations of Scenic Title, according to documents dated Sept. 25. A hearing in St. Paul is set for Oct. 22.
Melissa Grumdahl, a mortgage closing agent at Scenic Title, told investigators that Linda Eckholm said the premiums did not have to be sent to Fidelity.
Grumdahl, who worked at the business since February, also told investigators that she witnessed Kevin Eckholm, whose abstractor license expired in June 2007, authorize at least 42 abstracts since February.
Kevin Eckholm told investigators that he did “around 100” property abstracts in the past year.
Grumdahl, who has worked in the abstract business since 1999, would not discuss the case with the News Tribune except to say, “I saw things being done quite differently there.”
Attorney Charles Andresen said he had about 10 positive business transactions with Scenic Title in the past five or six years.
“They’ve always been pretty good folks,” he said. “Kevin was a good guy.”
The investigation also showed that Scenic Title didn’t have the means to repay about $28,000 in debts and failed to withhold taxes for its employees, documents show.
The commerce department said it has taken 10 enforcement actions against title insurance companies this year.