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Alberton v. Commonwealth Land Title Insurance Co.

United States District Court, E.D. Pennsylvania

April 25, 2014

A.D. ALBERTON & MARK C. KESSLER Plaintiffs,
v.
COMMONWEALTH LAND TITLE INSURANCE CO. Defendant.

MEMORANDUM

EDUARDO C. ROBRENO, District Judge.

I. INTRODUCTION

This case involves a class action brought against Commonwealth Land Title Insurance ("Defendant") on behalf of individuals who allegedly were overcharged for title insurance purchased between July 25, 2000, and August 1, 2005. Defendant is in the business of selling title insurance policies. The rates that Defendant may charge for its policies are governed by the Title Insurance Rating Bureau of Pennsylvania Manual (the "TIRBOP Manual").[1] The issue before the Court is whether the Defendant failed to charge the appropriate discount rate for certain qualified purchasers of title insurance.

Pending before the Court are Defendant's Motion to Decertify the Class and the parties' cross-motions for summary judgment.

II. BACKGROUND

A. Factual Background

The TIRBOP Manual sets forth the following mandatory three-tiered pricing structure: (1) Default Rate-applicable when a purchaser does not qualify for a special rate; (2) Reissue Rate-90% of the Default Rate and applicable when a property owner purchases title insurance within ten years of obtaining a policy on the same property; and (3) Refinance Rate-80% of the Reissue Rate and applicable when a property owner purchases title insurance within three years of obtaining a policy on the same property.

Section 5.3 of the pre-2005 TIRBOP Manual provides the following with respect to eligibility for the Reissue Rate:[2]

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 prior policy is produced notwithstanding the amount of coverage provided by the earlier policy.

TIRBOP Manual § 5.3.

Section 5.6 of the pre-2005 TIRBOP Manual provides the following with respect to eligibility for the Refinance Rate:

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. § 5.6. Plaintiffs allege that Defendant did not adhere to the mandatory pricing scheme established by these sections by failing to charge the appropriate discounted rate for qualified purchasers of title insurance.

B. Procedural History

This case has a long and complex procedural history. On July 25, 2006, the Complaint was filed in the Court of Common Pleas for Philadelphia County. Defendants removed the Complaint on August 23, 2006. After the parties conducted some class discovery, on January 31, 2008, the Court entered an order conditionally certifying the class (the "Certification Order"). The Certification Order established two subclasses, pursuant to the following class definition:

The class shall consist of all persons or entities who, from July 25, 2000 until August 1, 2005, paid premiums for the purchase of title insurance from defendant Commonwealth Title Insurance Company, in connection with a refinance of a mortgage or fee interest with respect to real property located in Pennsylvania that was insured by a prior title insurance policy within ten years of the refinance transaction, and were not charged the applicable Reissue Rate or Refinance Rate discount for title insurance on file with the Pennsylvania Insurance Commissioner. The class shall be divided into two sub-classes. Subclass A shall include all class members whose purchase of insurance from Commonwealth was made within the three years of the prior purchase of title insurance. Subclass B shall include all class members whose purchase of insurance from Commonwealth was made more than three years but within ten years of the date of the prior purchase of title insurance.

Alberton v. Commw. Land Title Ins. Co. , 247 F.R.D. 469, 482-83 (E.D. Pa. 2008), rev'd on other grounds, Hunt v. U.S. Tobacco Co. , 538 F.3d 217 (3d Cir. 2008). The Certification Order specified that the class was certified on a conditional basis and final certification was contingent on the appointment of a named plaintiff to represent Subclass B. Id . at 483.

On March 13, 2008, a Second Amended Complaint was filed that identified Plaintiff Mark C. Kessler as a member of Subclass B. On January 27, 2010, the Court entered an Order approving Mark C. Kessler as the class representative for Subclass B. On March 17, 2010, the Court approved Plaintiffs' Proposed Class Notice Plan.

On June 15, 2010, the case was stayed pending the Pennsylvania Supreme Court's decision in White v. Conestoga Title Ins. Co. , 53 A.3d 720, 722 (Pa. 2012). In White, the Pennsylvania Supreme Court held that all common law claims alleging title insurance overcharging must be pursued as administrative claims before the Pennsylvania Department of Insurance. Id . at 735. Following the decision in White, the Court returned the case to the active docket, and on November 13, 2012, Plaintiffs voluntarily dismissed Counts I-III and V-IX.

On March 18, 2013, Defendant filed its Motion to Decertify the Two Certified Subclasses and Motion for Summary Judgment and Plaintiffs filed their Motion for Partial Summary Judgment. Subsequently, parties filed their responses, replies, and notices of supplemental authority. On January 27, 2013, the Court held a hearing on the three motions and the parties presented oral argument.

III. DEFENDANT'S MOTION TO DECERTIFY

A. Standard of Review

A party seeking class certification bears the burden of proving that the action satisfies the four threshold requirements of Rule 23(a) of the Federal Rules of Civil Procedure and one of the three subdivisions of Rule 23(b). Amchem Prods., Inc. v. Windsor , 521 U.S. 591 (1997). Thus, Plaintiff must first satisfy Rule 23(a) by showing:

(1) the class is so numerous that joinder of all members is impracticable,
(2) there are questions of law or fact common to the class,
(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and
(4) the representative parties will fairly and adequately protect the interests of the class.

Fed. R. Civ. P. 23(a). If the threshold 23(a) requirements are met, the class may be certified if one of the three ...


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