Scott v. First American Title Insurance
276 F.R.D. 471
E.D. Ky.2011Background
- Plaintiffs Gregory and Alicia Scott sue First American Title Insurance Co. in Kentucky state of mind for alleged overcharges on title insurance premiums that exceeded rates filed with the Kentucky Department of Insurance (DOI).
- Plaintiffs seek class certification under Rule 23(b)(3) for all Kentucky homeowners with a prior mortgage within 10 years who were charged premiums exceeding the DOI-filed rate in the five years before filing.
- Court denies class certification because liability cannot be determined on a classwide basis and requires individualized analysis of each refinance transaction.
- Evidence shows multiple rate manuals (1996, 1999, 2007) with issues: 1999 substitution rate not properly filed; varying rates across transactions; agent-driven rate application; data systems insufficient to identify prior policies.
- Court finds no common method to resolve liability for all class members; substantial individualized inquiries into each borrower’s closing file are required, defeating commonality and predominance.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Rule 23(a) commonality satisfied? | Scott argues common questions predominate. | First American argues individualized inquiries dominate. | Not satisfied; commonality fails. |
| Rule 23(b)(3) predominance? | Overcharges are common issue, predominate. | Predominance requires classwide liability; not shown. | Not satisfied; predominance fails. |
| Is existence of prior title insurance a common issue? | Presume prior policy from prior mortgage. | Need individualized proof per transaction. | Not a common touchstone; requires case-by-case inquiry. |
| Corwin/Randleman guidance on certification applicable? | Corwin distinguishes, supports class treatment. | Randleman shows class not certifiable where liability is transaction-specific. | Corwin/Randleman support denial; certification inappropriate. |
Key Cases Cited
- Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011) (rigorous analysis; commonality must show classwide answers)
- In re American Medical Systems, Inc., 75 F.3d 1069 (6th Cir. 1996) (burden on plaintiffs for Rule 23 requirements)
- Sterling v. Velsicol Chem. Corp., 855 F.2d 1188 (6th Cir. 1988) (precedes commonality/predominance framework)