Title Insurer Is Ordered to Pay Rival Over Hire
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A federal jury has ordered First American Corp. to pay rival title insurer Fidelity National Financial Inc. $43.2 million in damages for violating a noncompete agreement after hiring away a former Fidelity executive.
First American, based in Santa Ana, said in a regulatory filing Wednesday that it would appeal the judgment. The jury awarded Fidelity compensatory damages of $10.8 million and punitive damages of $32.4 million.
Pending the outcome of its appeal, First American said it would take a $10-million charge to its fourth-quarter earnings; company executives declined to comment beyond the filing. First American shares rose 23 cents to $36.45 on the New York Stock Exchange.
Fidelity’s Chicago Title subsidiary sued First American’s title insurance unit in 2003, accusing First American of systematically recruiting employees for a newly formed unit called Talon Group. The suit, filed in U.S. District Court in Columbus, Ohio, also alleged that former Chicago Title executive James Magnuson breached a noncompete contract when he joined Talon.
In August, the court ordered the case to trial after finding that both Magnuson and First American were liable.
Fidelity National shares fell 9 cents to $43.53 on the NYSE.
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