Randleman v. Fidelity Nat. Title Ins. Co., No. 3:06CV7049.
| Decision Date | 17 November 2006 |
| Docket Number | No. 3:06CV7049. |
| Citation | 465 F.Supp.2d 812 |
| Parties | Jerry RANDLEMAN, et al., Plaintiffs, v. FIDELITY NATIONAL TITLE INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Northern District of Ohio |
Andrew S. Wein, Donna L. Wilson, Marla H. Kanemitsu, Gilbert, Heintz & Randolph, Washington, DC, David D. Yeagley, Shannan L. Katz, Ulmer & Berne, Cleveland, OH, Ingrid L. Moll, Suzanne Lafleur Klok, William H. Narwold, Motley Rice, Mt. Pleasant, SC, Mark R. Koberna, Rick D. Sonkin, Sonkin & Koberna, Cleveland, OH, for Plaintiffs.
Ernest E. Vargo, James R. Wooley, Michael E. Mumford, Baker & Hostetler, Alexander E. Goetsch, Michael C. Cohan Cavitch, Familo, Durkin & Frutkin, Cleveland, OH, for Defendant.
This is a class action suit for declaratory and injunctive relief and recovery of money damages against a provider of title insurance to institutions making loans to homeowners. Named plaintiffs are homeowner-borrowers who refinanced a mortgage on their home. The lender obtained lenders title insurance from the defendant, Fidelity National Title Insurance Company [Fidelity]. Such insurance protects the lender's interest in the mortgaged property against defects in the title. Once the loan is paid, the insurance expires.
Plaintiffs claim that the premium paid for the title insurance exceeded the premium allowed by Ohio law, and that they have been injured and wronged by defendant's failure to charge them a lower premium, as provided by such law. The plaintiffs assert this claim even though they were not named insureds under the policy.
Plaintiffs' complaint asserts several claims: breach of contract, fraud, breach of fiduciary duty, conversion, unjust enrichment, and breach of the duty of good faith and fair dealing. Defendant seeks dismissal as to all claims.
This court has jurisdiction under 28 U.S.C. § 1332(d)(2)(A).
Pending is defendant's motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6).1 For the following reasons, defendant's motion shall be granted in part and denied in part.
Jerry and Diane Randleman, the named plaintiffs, sue Fidelity on behalf of all homeowners in Ohio who, at any time from 1995 to the present: 1) were required to pay a premium to Fidelity for title insurance acquired in connection with a refinancing transaction; 2) qualified for a discounted reissue rate pursuant to the rate schedule filed by Fidelity with the Ohio Department of Insurance [ODI]; and 3) did not receive such discounted reissue rate.
Plaintiffs claim that Ohio law obligated Fidelity to charge a lower [i.e., "discounted"] premium where Fidelity was issuing lenders title insurance as to individual residential property that had been the subject of title insurance ["original" insurance] within ten years prior to the refinancing transaction for which Fidelity was providing lenders title insurance.
According to the complaint, Fidelity, rather than charging the discounted rate as required under Ohio law, charged the rate applicable to issuance of an original lenders title insurance policy. Plaintiffs seek to recover the difference between the rate charged by Fidelity and the discounted rate they allege should have been charged. They purport to represent all similarly situated refinancing homeowners who qualified for the discounted premium, but who, like the named plaintiffs, were charged a higher, non-discounted rate.
To survive a motion to dismiss under Rule 12(b)(6), "a complaint must contain either direct or inferential allegations respecting all the material elements to sustain a recovery under some viable legal theory." Scheid v. Fanny Farmer Candy Shops, Inc., 859 F.2d 434, 436 (6th Cir. 1988) (citations omitted). In considering the motion, the court must accept all factual allegations in the complaint as true. Minger v. Green, 239 F.3d 793, 797 (6th Cir.2001) (citation omitted). The court "need not accept as true legal conclusions or unwarranted factual inferences." Morgan v. Church's Fried Chicken, 829 F.2d 10, 12 (6th Cir.1987). Bare assertions of legal conclusions are not sufficient. Sogevalor S.A. v. Pa. Cent. Corp., 771 F.Supp. 890, 893 (S.D.Ohio 1991). Only well pleaded facts are construed liberally in favor of the party opposing the motion to dismiss. Id. (citing Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974), overruled on other grounds). Motions to dismiss should be granted "only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." See, e.g., Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984).
Defendant asserts that the ODI has exclusive jurisdiction over this dispute. Describing Ohio's comprehensive insurance regulatory scheme, defendant argues that the complaint involves a dispute over the correct rate to be assessed, an issue that the ODI is uniquely qualified to resolve. Plaintiffs respond that they are not challenging the reasonableness of an approved rate, but instead address defendant's business practices [including their routine charging of a higher rate], an issue over which, according to the plaintiffs, the ODI should not have exclusive jurisdiction.
Under the primary jurisdiction doctrine, when a court can properly hear a claim that contains an issue within the special competence of an administrative agency, a court may stay court proceedings to allow the agency to make its determination. See, e.g., U.S. v. Any & All Radio Station Transmission Equip., 204 F.3d 658, 664 (6th Cir.2000) ().
Plaintiffs allege exclusively state common law claims. These issues are within the conventional competence of judges; adjudication of such claims does not require the unique expertise of the ODI. See Barnes v. First Am. Title Ins. Co., 2006 WL 2265553 (N.D.Ohio) (); Chesner v. Stewart Title Guar. Co., 2006 WL 2252542 (N.D.Ohio) (same). Thus, this court will retain exclusive jurisdiction over plaintiffs' claims.
Count II of plaintiffs' complaint asserts, without specifying the specific nature of the contract, that defendant breached its contractual obligations to the plaintiffs.
Ohio recognizes three types of contracts: express, implied-in-fact, and implied-in-law. See, e.g., hinder v. Am. Natl. Ins. Co., 155 Ohio App.3d 30, 37, 798 N.E.2d 1190 (2003).
An express contract requires offer, acceptance, and mutual assent. Id. An implied-in-fact contract requires assent, but the court must construe the facts and circumstances surrounding the offer and acceptance to determine the terms of the agreement. Id. Contracts implied-in-law (or quasi-contracts) arise where one party wrongfully receives a benefit that gives rise to a legal obligation. Id.
Defendant argues that plaintiffs fail to state a claim for breach of an express contract because plaintiffs are not in contractual privity.
The basis of defendant's contention is the fact that the defendant provided the policy to the lender, not to the plaintiffs, and the lender was the only named insured. Thus, defendant contends that the plaintiffs had nothing to do with the issuance of the policy, and were not in privity with the defendant.
Only a party to a contract or an intended third-party beneficiary may bring an action on a contract in Ohio. See, e.g., Mergenthal v. Star Banc Corp., 122 Ohio App.3d 100, 103, 701 N.E.2d 383 (1997) (citation omitted). Because plaintiffs' lender-not the plaintiff-is the beneficiary of the title insurance policy, the plaintiff cannot sue the defendant for breach of the terms and conditions, including terms and conditions relating to the formation between the lender and defendant of the lenders title insurance policy.
Plaintiffs cannot recover as third-party beneficiaries.
For a third-party beneficiary to be an intended beneficiary, the contract must have been entered into directly or primarily for the benefit of that individual. See, e.g., Reisenfeld & Co. v. Network Group, Inc., 277 F.3d 856, 863 (6th Cir. 2002) (citing Laverick v. Children's Hosp. Med. Ctr. of Akron, Inc., 43 Ohio App.3d 201, 204, 540 N.E.2d 305 (1988)); Sony Electronics, Inc. v. Grass Valley Group, Inc., 2002 WL 440749, at *3 (Ohio App.). That the third party receives an indirect or incidental benefit from the contract is insufficient to provide the third party with a cause of action on a contract. Id. The performance of the promise benefitting the beneficiary must also satisfy a duty owed by the promisee to the beneficiary. Id.
The court in Shearer v. Echelberger, 2000 WL 1663626 (Ohio App.), rejected an attempt by homeowners to sue as thirdparty beneficiaries under a policy of title insurance, which, like the policy at issue here, named only the lender as a named insured. To be sure, plaintiffs' refinancing triggered the purchase of the policy, but the purpose of the policy was to protect the lender, not the plaintiffs.
Because the policy was not entered into directly or primarily for their benefit, plaintiffs cannot sue under the policy as intended third-party beneficiaries.
Plaintiffs claim that the defendant breached an implied-in-fact contract. The elements of an implied-in-fact contract are the same as those of an express contract: offer, acceptance, consideration, and a meeting of the minds. Danko v. MBIS, Inc., 1995 WL 572021, at *3 (Ohio App. 1995) (citations omitted).
Defendant first argues that plaintiffs cannot pursue a claim of breach of an implied-in-fact contract because plaintiffs do not...
To continue reading
Request your trial
-
In Re Title Insurance Antitrust Cases.
...of the court.” Id. at n. 34, 106 S.Ct. 1922 ( quoting Levi, An Introduction to Legal Reasoning, 15 U.Chi.L.Rev. 501, 540 (1948)). 26 In Randleman, albeit in dicta, another branch of this Court characterized Ohio's title insurance scheme as “Comprehensive” in deciding that the Court had juri......
-
Melnick v. Tamko Bldg. Prods., Inc.
...two federal court cases, but the Court is not persuaded by that authority. First, Ms. Louthan cites Randleman v. Fidelity National Title Insurance Co. , 465 F. Supp. 2d 812 (N.D. Ohio 2006), in which plaintiffs who had refinanced home mortgages sued the company from whom their lenders had p......
-
Hancock v. Chicago Title Ins. Co.
...*2-*4 (D.Idaho Sept. 25, 2007) (allowing claims for breach of implied contract and unjust enrichment); Randleman v. Fid. Nat'l Title Ins. Co., 465 F.Supp.2d 812, 817-27 (N.D.Ohio 2006) (allowing claims for breach of implied contract and unjust 17. The entire TTIA was recodified in 2005. The......
-
Woodhams v. Allstate Fire
...rates. See, e.g., Lentini v. Fidelity Nat'l Title Ins. Co. of N.Y., 479 F.Supp.2d 292 (D.Conn.2007); Randleman v. Fidelity Nat'l Title Ins. Co., 465 F.Supp.2d 812 (N.D.Ohio 2006); Ice Cream Liquidation, Inc. v. Land O'Lakes, Inc., 253 F.Supp.2d 262 (D.Conn.2003); Black Radio Network, Inc. v......