646 F.3d 347 (6th Cir. 2011), 09-4533, Randleman v. Fidelity Nat. Title Ins. Co.
|Docket Nº:||09-4533, 10-4242.|
|Citation:||646 F.3d 347|
|Opinion Judge:||BOYCE F. MARTIN, JR., Circuit Judge.|
|Party Name:||Jerry RANDLEMAN; Dianne M. Randleman, Plaintiffs-Appellants, v. FIDELITY NATIONAL TITLE INSURANCE CO., Defendant-Appellee. Dean Hickman; Aimee Hickman, Plaintiffs-Appellants, v. First American Title Insurance Co., Defendant-Appellee.|
|Attorney:||Marvin L. Karp, Ulmer & Berne LLP, Cleveland, Ohio, for Appellants. Thomas D. Warren, Baker & Hostetler LLP, Cleveland, Ohio, Elizabeth T. Ferrick, SNR Denton U.S. LLP, St. Louis, Missouri, for Appellees. Marvin L. Karp, David D. Yeagley, Shannan L. Katz, Ulmer & Berne LLP, Cleveland, Ohio, Mark ...|
|Judge Panel:||Before: MARTIN, SILER, and ROGERS, Circuit Judges.|
|Case Date:||May 16, 2011|
|Court:||United States Courts of Appeals, Court of Appeals for the Sixth Circuit|
Argued: April 20, 2011.
[Copyrighted Material Omitted]
Jerry and Dianne Randleman appeal the district court's decision to decertify the class in an action that they brought against Fidelity National Title Insurance Company. The Randlemans allege that Fidelity failed to provide a discount, as required by its filed rates, when issuing title insurance to homeowners who had purchased a title insurance policy for the same property from any other insurer within the previous ten years. Dean and Aimee Hickman brought an action alleging the same claims against First American Title Insurance Company, but the district court denied their motion to certify a class. Neither district court abused its discretion in concluding that, as the classes are presently defined, common issues do not predominate. We therefore AFFIRM both orders.
A. The Randlemans.
When Jerry and Dianne Randleman purchased a home in New London, Ohio in 2001, they also purchased both a lender's title insurance policy and an owner's policy. In 2004 the Randlemans refinanced their home and their new mortgagee required that they purchase a new title insurance policy for its benefit. Fidelity issued the new policy but failed to give the Randlemans the discounted " refinance" rate applicable when another insurer has issued a title insurance policy on the property within the previous ten years. The Randlemans assert that Fidelity overcharged them $213.57 by failing to provide the discount.
Ohio law requires that Fidelity file its rates with the state, which it does through the Ohio Title Insurance Rating Bureau. The Bureau filed a " Rate Manual" with Ohio, which is binding on Fidelity, and requires that Fidelity charge a discounted premium rate for policies issued in connection with refinancing transactions. This discount appears to be based on there being less risk to the current underwriter, and less investigation required, because some other entity has recently investigated
and insured the title to the property. Provision PR-10 of the Rate Manual states:
When a refinance loan is made to the same borrower on the same land, the following rate will be charged ... provided the Insurer is given a copy of the prior policy, or other information sufficient to enable the Insurer to identify such prior policy upon which reissue is requested, and the amount of the unpaid principal balance secured by the original loan:
|Age of Original Loan||Policy Rates|
|10 years or under||70% of original rate|
|Over 10 years||100% of original rate|
All persons who (i) paid for title insurance issued by defendant Fidelity National Title Insurance Company in connection with the refinancing of a residential mortgage loan on property located in Ohio that was completed on or after February 15, 2000, (ii) were entitled to receive the " reissue" or " refinance" rate for title insurance pursuant to Section 8 or Section 9 of the Filed Rates (for transactions prior to February 1, 2002) or PR-9 or PR-10 of the Filed Rates (for transactions February 1, 2002 to the present), and (iii) paid more than the " reissue" or " refinance" rate for such title insurance.
Because Fidelity must have received a copy of the prior policy or the file must have contained " other information sufficient to enable [Fidelity] to identify such prior policy upon which reissue is requested" in order for the individual to be eligible to receive the discount, the key question as this litigation is currently framed and the class is defined is what each application for title insurance contained. The district court's initial conclusion that this question is common to all class members and predominates over all other issues was based largely on its view that " a prior mortgage invariably, or nearly so invariably as to make any variation meaningless, meant that a prior policy had issued." Randleman v. Fidelity Nat'l Title Ins. Co., 264 F.R.D. 298, 303 (N.D.Ohio 2009). However, after the district court certified the class, the parties engaged in rather extensive discovery and deposed representatives from various Ohio lenders about their practices and use of title insurance. Fidelity established that mortgagees can, and apparently often do, rely on opinion letters from attorneys or title guarantees in lieu of purchasing title insurance. This evidence established that the district court's earlier presumption about the ubiquity of title insurance in mortgage transactions was incorrect: a prior mortgage in the chain of title would not have given Fidelity notice that the homeowner had previously purchased title insurance. The district court accordingly reasoned that liability could only be determined on an individual basis by examining each individual homeowner's file. Therefore, the district court concluded that the putative class failed to meet the commonality or typicality requirements necessary to sustain a Page 351 class action. Additionally, in light of the individual analysis necessary to determine liability, the district court concluded that common issues did not predominate. B. The Hickmans. When Dean and Aimee Hickman purchased a home in Elyria, Ohio in 1999 they also purchased both a lender's title insurance policy and an owner's policy. The Hickmans then refinanced their home in 2001 and again in 2004. The Hickmans purchased a new title insurance policy for each transaction, with First American issuing the 2004 policy. The Hickmans were apparently unaware that they were eligible to receive the refinance discount, and there is no evidence that they requested the discount or submitted documentation to First American establishing that they had previously purchased title insurance. The Hickmans claim that by not providing the discount First American overcharged them $134.40. First American, like Fidelity, files its rates through the Ohio Title Insurance Rating Bureau and is subject to provisions PR-9 and PR-10, which provide the " refinance discount" of thirty percent when issuing a title insurance policy if some other title insurer has issued a policy for the property in the previous ten years. The Hickmans proposed that the district court certify a class of:
All persons who (i) paid for a lender's policy of title insurance issued by defendant First American Title Insurance Company in connection with the refinancing of a residential mortgage loan on property located in Ohio that was completed on or after February 2, 2000; (ii) where the subject property previously had been mortgaged within the applicable look-back period; and (iii) paid more than the discounted " reissue" or " refinance" rate for such title insurance.
Unlike the Randlemans' proposed class, membership in the Hickmans' class does not turn on an individual's " entitlement" to receive the discount, but includes all individuals who refinanced a mortgage within the ten-year look-back period. The district court considered the requirements in Rule 23 for certifying a class action and concluded that the Hickmans' proposed class failed to meet the commonality or typicality requirements. Additionally, the district court held that even if the commonality requirement of Rule 23(a) were met, common questions did not predominate as required to maintain a class action under Rule 23(b)(3). Thus, the district court denied the motion for class certification. II. A. Standard of Review. This Court reviews a district court's decision to deny class certification for abuse of discretion. Ball v. Union Carbide Corp., 385 F.3d 713, 727 (6th Cir.2004). " The district court maintains substantial discretion in determining whether to certify a class, as it possesses the inherent power to manage and control its own pending litigation." Reeb v. Ohio...
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