Brasko v. First Nat'l Bank of Pa.

• Docket Number: Civil SAG-20-3489
• Decision Date: 01 November 2023
• Parties: RICHARD BRASKO, et al., Plaintiffs, v. FIRST NATIONAL BANK OF PENNSYLVANIA, Defendant.
• Court: U.S. District Court — District of Maryland

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RICHARD BRASKO, et al., Plaintiffs, v. FIRST NATIONAL BANK OF PENNSYLVANIA, Defendant.

Civil No. SAG-20-3489

United States District Court, D. Maryland

November 1, 2023

MEMORANDUM OPINION

STEPHANIE A. GALLAGHER UNITED STATES DISTRICT JUDGE

Richard Brasko, Lori Brasko, and Eric Rubinstein (collectively “Plaintiffs”) represent a class of borrowers who had residential mortgage loans serviced by First Mariner Bank (“First Mariner”). Plaintiffs assert that First Mariner and its employees violated the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. §§ 2601-17, and the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C §§ 1961-68, by referring loans to a title services provider in exchange for kickbacks. Five motions are currently pending: (1) a motion to exclude expert Brett Dieck, filed by Defendant First National Bank of Pennsylvania (“Defendant”), successor by merger to First Mariner, ECF 83; (2) a motion to exclude expert William Welch, filed by Defendant, ECF 84; (3) a motion for partial summary judgment, filed by Plaintiffs, ECF 80; (4) a cross-motion for summary judgment, filed by Defendant, ECF 81; and (5) a motion to decertify the class, filed by Defendant, ECF 82. This Court has reviewed all of those motions, along with the related exhibits and briefing. ECF 85, 86, 89, 90, 91, 92, 93, 95, 101, 102, 103. This Court also held a hearing on August 30, 2023. ECF 105. For the reasons below, the motions to exclude experts are granted Plaintiffs' motion for partial summary judgment is granted, and Defendant's cross-motion for summary judgment is granted in part, denied in part, and deferred in part. This Court also defers ruling on Defendant's motion to decertify the class and has scheduled another hearing to discuss that motion and the deferred portion of Defendant's cross-motion for summary judgment.

I. FACTUAL BACKGROUND

At the time of the relevant events, First Mariner was a Maryland corporation and independently owned bank. ECF 54-1 ¶ 12. All Star Title, Inc. (“All Star”) was a title service company operating in Maryland. Id. ¶ 2. Plaintiffs Richard and Lori Brasko and Eric Rubinstein are Maryland residents who refinanced their mortgages with First Mariner. ECF 86-1, 86-2. Plaintiffs allege that, from 2012 through 2016, First Mariner brokers referred 257 loans (including Plaintiffs' loans) to All Star for title settlement services as part of an illegal kickback scheme. ECF 54-1 ¶¶ 26-35. For example, in 2012, Tom Bowen, the sales manager at First Mariner's Bel Air branch,^[1]entered into a joint marketing arrangement with All Star. ECF 31-3, 31-5, 85-7, 85-8. Under the arrangement, All Star and First Mariner each paid an equal share for the marketing materials to two marketing companies, Lendanear Data & Direct Mail Services (“Lendanear”) and Influence Direct, who prepared joint advertisements for All Star and First Mariner. ECF 31-5 at 6-10; ECF 85-6; ECF 85-9. The joint marketing payments ended in April 2013, ECF 85-9 at 3, although Plaintiffs assert that referrals of business as quid pro quo for those payments continued, ECF 89 at 25.

First Mariner loan officer Robert Hoover originated the Braskos' refinance loan in January 2013. ECF 86-1; ECF 85-1 at 30:17-31:4. Before their closing, Hoover gave the Braskos a Good Faith Estimate (“GFE”), including an estimate of $1,550 in total title-related charges. ECF 85-1 at 49:19-50:7. The GFE informed the Braskos that they could compare the GFE with offers from other lenders to find better offers. Id. at 54:18-55:7. Also, Hoover informed the Braskos in writing that they had the right to select their own company to perform title services. Id. at 60:20-62:7; ECF 93-8. He gave the Braskos a “Service Provider List” that included three recommended title companies but did not include All Star. ECF 85-1 at 58:18-60:16. The Braskos did not contact any of the recommended title companies and did not choose a title company. Id. at 59:15-17. Hoover, as the loan officer, referred the loan to All Star for closing. Id. at 61:17-62:7. The Braskos' HUD-1 reflects a total of $1,550 in title related charges, consisting of $1,025.75 for title insurance and $524.25 for other title fees. ECF 93-4 at 3.

Plaintiff Rubinstein refinanced his mortgage with First Mariner in March 2013, using Christopher Perrin as his loan officer. ECF 86-2; ECF 85-3 at 35:1-11. Perrin provided Rubinstein with a GFE, including an estimate of $1,550 in title related charges. ECF 85-3 at 39:14-41:7. Perrin informed Rubinstein in writing that he had the right to use a title company of his own choosing. Id. at 55:6-56:13. Perrin gave Rubinstein a “Service Provider List” that included three recommended title companies but did not include All Star. Id. at 53:5-54:19. Rubinstein did not contact any of the recommended title companies and did not choose a title company. Id. at 54:2021. Perrin, as the loan officer, referred the loan to All Star for closing. Id. at 37:7-11. Ultimately, Rubinstein was charged only $1,147.40 in title fees, consisting of $527.80 for insurance and $619.60 for the title examination. ECF 93-9 at 3.

In a Memorandum Opinion and Order issued on March 29, 2022, this Court granted Plaintiffs' motion to certify a class pursuant to Rule 23 of the Federal Rules of Civil Procedure.

ECF 46, 47. Specifically, Plaintiffs received certification of the following class of individuals (the “First Mariner Class”), with two subclasses:

All individuals in the United States who were borrowers on a mortgage loan obtained from First Mariner Bank for which All Star Title, Inc. provided a settlement service, as identified in Section 1100 on the borrower's HUD-1 or Closing Disclosure, between January 1, 2012 and January 31, 2016. Exempted from this class is any person who, during the period of January 1, 2012 through January 31, 2016, was an employee, officer, member and/or agent of First Mariner Bank, Howard Bank, or All Star Title, Inc.

ECF 47 at 2. The first subclass, the RICO subclass, is comprised of all members of the class. Id. The second subclass, the RESPA subclass, “is comprised of all members of the First Mariner Class who were borrowers on a federally related mortgage loan (as defined under the Real Estate Settlement Procedures Act, 12 U.S.C. § 2602) between January 1, 2012 and January 31, 2016.” Id.

II. THE PENDING MOTIONS

A. Defendant's Motions in Limine to Exclude Expert Testimony

1. Legal Standard

“A motion in limine is a request for guidance by the court regarding an evidentiary question.” Hunt Valley Baptist Church, Inc. v. Baltimore Cnty., No. 17-CV-804, 2018 WL 2717834, at *7 (D. Md. June 6, 2018) (quoting United States v. Luce, 713 F.2d 1236, 1239 (6th Cir. 1983), aff'd, 469 U.S. 38 (1984)). Typically, pretrial motions in limine seek to exclude prejudicial evidence before it is offered at trial. Changzhou Kaidi Elec. Co., Ltd. v. Okin Am., Inc., 102 F.Supp.3d 740, 745 (D. Md. 2015) (quoting Luce, 469 U.S. at 40 n.2). These motions help to streamline a case by allowing a court to avoid “lengthy argument at, or interruption of, the trial.” Banque Hypothecaire Du Canton De Geneve v. Union Mines, Inc., 652 F.Supp. 1400, 1401 (D. Md. 1987); see also Changzhou Kaidi, 102 F.Supp.3d at 745 (“[Motions in limine] are ‘designed to narrow the evidentiary issues for trial and to eliminate unnecessary trial interruptions.'” (quoting Louzon v. Ford Motor Co., 718 F.3d 556, 561 (6th Cir. 2013))). Motions in limine further promote judicial efficiency by preserving the issues raised for appeal and eliminating the need for parties to renew their objections at trial, “just so long as the movant has clearly identified the ruling sought and the trial court has ruled upon it.” United States v. Williams, 81 F.3d 1321, 1325 (4th Cir. 1996); see Fed.R.Evid. 103(a); cf. R. 103(a) advisory committee's note to 2000 amendment (acknowledging that Rule 103(a) “applies to all rulings on evidence . . . including so-called ‘in limine' rulings”).

Generally, courts should grant a motion in limine “only when the evidence is clearly inadmissible on all potential grounds.” Dorman v. Anne Arundel Med. Ctr., No. 15-CV-1102, 2018 WL 2431859, at *1 (D. Md. May 30, 2018) (quoting Emami v. Bolden, 241 F.Supp.3d 673, 681 (E.D. Va. 2017)). Ultimately, rulings on these motions fall within the trial court's “broad discretion.” Kauffman v. Park Place Hospitality Grp., 468 Fed.Appx. 220, 222 (4th Cir. 2012); see also United States v. Johnson, 617 F.3d 286, 292 (4th Cir. 2010) (noting that evidentiary rulings fall within a trial court's discretion).

Here, Defendant seeks to exclude certain testimony by two of Plaintiffs' proposed expert witnesses: Brett Dieck and William Welch. Federal Rule of Evidence 702 governs the admissibility of expert witness testimony. A qualified expert may give testimony if:

(a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;

(b) the testimony is based on sufficient facts or data;

(c) the testimony is the product of reliable principles and methods; and

(d) the expert has reliably applied the principles and methods to the facts of the case.

Fed. R. Evid. 702. In essence, the trial court must ensure that the proposed expert testimony “both rests on a reliable foundation and is relevant to the task at hand.” Daubert v. Merrell Dow Pharm., Inc. 509 U.S. 579, 597 (1993). In Daubert, the Supreme Court provides five non-exhaustive factors a court may weigh in making this assessment: (1) “whether a theory or technique . . . can be (and has been) tested,” (2) “whether the theory or technique has been subjected to peer review and publication,” (3) “the known or potential rate of error,”...