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Slapikas v. First American Title Insurance Co.

August 13, 2010

ANTHONY L. SLAPIKAS, ALICE B. SLAPIKAS AND IVY FODOR, FOR THEMSELVES AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
FIRST AMERICAN TITLE INSURANCE COMPANY, DEFENDANT,
v.
MEZZO LAND SERVICES, LLC, THIRD-PARTY DEFENDANT.



The opinion of the court was delivered by: Conti, District Judge.

MEMORANDUM OPINION AND ORDER

I. Introduction

Pending before the court is a motion for decertification filed pursuant to Federal Rule of Civil Procedure 23(c)(1)(C). (Docket No. 289.) During the course of a hearing conducted on November 11, 2009, the court partially denied that motion. (Docket No. 304-1 at 74.) For the reasons that follow, the remainder of the motion will likewise be denied.

II. Background*fn1

Pennsylvania law requires every title insurance company to file "every manual of classifications, rules, plans, and schedules of fees and every modification of any of the foregoing relating to the rates which it proposes to use." 40 P A. S TAT. § 910-37(a). A title insurance company "may satisfy its obligations to make such filings by becoming a member of, or a subscriber to, a licensed rating organization which makes such filings." 40 P A. S TAT. § 910-37(b). Defendant First American Title Insurance Company ("First American") was a member of the Title Insurance Rating Bureau of Pennsylvania ("TIRBOP") from December 19, 1999, through August 1, 2005. (Docket No. 249 ¶ 1.) The TIRBOP is licensed by the Pennsylvania Department of Insurance pursuant to 40 P A. S TAT. § 910-41(a). ( Id. ¶ 2.) The TIRBOP prepared a Rate Manual setting forth the rates that its members would use. ( Id. ¶ 3.) The Rate Manual was approved by the Pennsylvania Department of Insurance. ( Id. ¶ 4.) Section 2.1 of the Rate Manual provided that "[a]ll charges for title insurance provided by the approved policies and endorsements" were to be made "as set forth" in the Rate Manual. ( Id. ¶ 6.)

During the period of time at issue, the Rate Manual specified a "Basic Rate" and two discount rates. ( Id. ¶¶ 7-8.) The discount rates were known as the "Reissue Rate" and the "Refinance Rate." ( Id. ¶ 8.) These discount rates were established by sections 5.3 and 5.6 of the Rate Manual, which provided:

5.3 REISSUE RATE

A purchaser of a title insurance policy shall be entitled to purchase this coverage at the reissue rate if the real property to be insured is identical to or is part of real property insured 10 years immediately prior to the date the insured transaction closes when evidence of the earlier policy is produced notwithstanding the amount of coverage provided by the prior policy. ***

5.6 REFINANCE OR SUBSTITUTION LOANS

When a refinance or substitution loan is made within 3 years from the date of closing of a previously insured mortgage or fee interest and the premises to be insured are identical to or part of the real property previously insured and there has been no change in the fee simple ownership, the Charge shall be 80% of the reissue rate. ( Id. ¶¶ 10, 12.) The Reissue Rate was 90% of the Basic Rate. ( Id. ¶ 11.) The phrase "when evidence of the earlier policy is produced," as used in section 5.3, was not defined or explained within the text of the Rate Manual. ( Id. ¶ 13.)

On May 10, 2005, the TIRBOP filed an amended Rate Manual with the Department of Insurance. ( Id. ¶ 14.) A cover letter accompanying the filing stated that the proposed revisions to the Rate Manual were designed to clarify, inter alia, "the nature of the evidence of previous insurance that would entitle the purchaser of title insurance to a reduced rate." ( Id. ¶ 15.) The Department of Insurance approved the revisions relevant to this case on August 1, 2005. ( Id. ¶ 18.) The revisions were effective as of that date. ( Id. ) Section 2.8 of the Rate Manual, along with the amended sections 5.3 and 5.6, provided:

2.8 Sections 5.3, 5.4 and 5.6 of the Manual provide that reduced rates are applicable when evidence of previous insurance is provided within a specified time period. As evidence of previous insurance, an Insurer will rely upon:

a. the recording (within the period of time specified within the applicable Section of the Manual) of either:

i. a deed to a bona fide purchaser for value, or

ii. an unsatisfied mortgage to an institutional lender; or in the alternative,

b. any of the following documents provided by or on behalf of the purchaser of the title insurance policy:

iii. a copy of the prior policy;

iv. a copy of the marked-up commitment;

v. a settlement sheet showing payment of a title insurance premium; or

vi. other written evidence acceptable to the Insurer that title insurance coverage was purchased for the property.

***

5.3 REISSUE RATE

A purchaser of a title insurance policy shall be entitled to the reissue rate if the real property to be insured is identical to or part of real property insured 10 years immediately prior to the date the insured transaction closes. Evidence of previous insurance in accordance with the provisions of Section 2.8 of this Manual must be considered in order to apply ...


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