Class Action

Fidelity Class Action Defense Cases-Randleman v. Fidelity National Title: Ohio Federal Court Grants Class Action Treatment Against Title Insurer Alleging Class Action Claims Based On Failure To Give Homeowners Discounted Rates

By Michael J. Hassen

Class Action Alleging Fidelity Failed to Disclose and Provide Discounted Title Insurance Rates to Homeowners as Part of Refinance Transactions Entitled to Class Action Treatment Ohio Federal Court Holds

Plaintiffs filed a class action lawsuit against their title insurance carrier, Fidelity National Title, alleging that the cost it charged insureds for insurance issued in connection with refinance transactions; specifically, the class action alleged that plaintiffs “have been injured and wronged by defendant’s failure to charge them a lower premium,” as required by Ohio law, “even though they were not named insureds under the title insurance policy.” Randleman v. Fidelity National Title Ins. Co., ___ F.Supp.2d ___ (N.D. Ohio January 31, 2008) [Slip Opn., at 1]. Of course, homeowners typically pay for title insurance, both for themselves and for their lenders, id., at 2. Defense attorneys filed a motion to dismiss the class action to the extent it asserted claims for breach of implied-in-fact contract and unjust enrichment, which the district court denied. See Randleman v. Fidelity National Title Ins. Co., 465 F.Supp.2d 812, 827 (N.D. Ohio 2007). Plaintiffs then filed a motion to certify the litigation as a class action, id. The trial court concluded that the matter may proceed as a class action.

Like all other title insurers doing business in Ohio, Fidelity belongs to the Ohio Title Insurance Rating Bureau (OTIRB) and files its insurance rates with the Ohio Superintendent of Insurance. Randleman, at 2. “The OTIRB files a manual of rates with the Ohio Department of Insurance (ODI), setting forth the rates title insurers will charge for policies.” Id. The rates in the manual are binding on title insurers, and the listed rates are mandatory though Ohio law provides for certain discounted rates, id., at 2-3. The class action complaint alleged that plaintiffs refinanced their Ohio home and paid a non-discounted rate for a title policy for their lender, id., at 3. The class action further alleged that plaintiffs had refinanced within the time period that would have qualified them to receive a discounted reissue rate, and that “they were overcharged $213.57.” Id., at 4. Plaintiffs’ class action certification motion argued that Fidelity systematically failed to provide discounts “despite knowledge that particular consumers are entitled to the discounted rate.” Id., at 5. Defense attorneys opposed class action treatment on the ground that “the issue of knowledge of the discount on the part of each individual class member would be determinative, and would require individualized adjudication of ‘as to the knowledge and practices of the particular lender, mortgage broker, agent, and borrower involved in the transaction’…, and thus, individual adjudication of each class member’s claim.” Id. Plaintiffs countered that Fidelity’s non-disclosure or a homeowner’s lack of knowledge is not an element of the causes of action underlying the class certification motion, so individual trials would not be required. Id., at 5-6.

Full post as published by Class Action Defense Blog on February 05, 2008 (boomark / email).