You get fined first, and then spend a fortune trying to defend yourself in court.

I don't know if they could make that stick but you would need to defend it.  

Anyone who files will likely list Success Path or whatever company they had experience with as a defendant.

You will be asked to attend a hearing at the city council to defend your case.

@Michael BaumThere's no need to defend John Underwood!

In the 18th century, such an allegation would trigger a challenge (white gloves flapping) and a duel to defend my name and achieve satisfaction.

I have seen articles about several states' rulings that make single owner LLCs hard to defend.

And, yes, provide operational history (neatly formatted) in whatever format (tax forms, quickBooks reports, defendable spreadsheets, etc.) that fits your audience. https://www.fanniemae.com/content/guide_form/1003rev.pdf Update: didn't see John's last post...

Is it a possible avenue that I need to defend or are they liable to succeed with this action against me?

When a title claim is made against a title insurer you'll usually end up with an RE type who has experience in title matters as the title plant attorney will not be representing you, but defending the claim.