Wilson v. Eyerbank, N.A.
77 F. Supp. 3d 1202
S.D. Fla.2015Background
- Plaintiffs (Wilson, Avelar-Lemus, Jessie & Mattie Cross) allege EverBank (and Everhome, a division) force-placed hazard insurance after borrowers’ coverages lapsed and charged inflated premiums that included undisclosed “kickbacks,” commissions, portfolio-servicing costs, and riskless reinsurance from insurers American Security Insurance Co. (ASIC) and Standard Guaranty Insurance Co. (SGIC).
- Plaintiffs seek class relief (nationwide plus Florida and New York subclasses) and assert claims including breach of contract, breach of the implied covenant, unjust enrichment, TILA violations, tortious interference, RICO, NY G.B.L. § 349, and others.
- Everhome was a corporate division of EverBank and thus not a separate suable entity; Everhome claims were dismissed. Plaintiffs admit mortgages authorize force-placed insurance but allege defendants charged costs not authorized by the mortgage terms.
- Defendants moved to dismiss under Rules 12(b)(6) and 12(b)(1); insurer-defendants also argued the filed-rate doctrine and administrative-exhaustion doctrines should bar claims.
- The Court allowed breach of contract, breach of covenant, and TILA claims to proceed against EverBank (with Avelar-Lemus’ contract claims dismissed for failure to allege pre-suit notice); unjust enrichment and FDUTPA claims against EverBank were dismissed; unjust enrichment (except Avelar-Lemus) and tortious interference against ASIC/SGIC survived; RICO and NYDPA claims were dismissed without prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Everhome is a proper defendant | Everhome named as defendant | Everhome is a division of EverBank, not a legal entity | Dismissed: Everhome not a separate suable entity |
| Breach of mortgage and implied covenant (force-placed charges) | Charges included unauthorized, inflated items (kickbacks, portfolio costs, reinsurance) exceeding mortgage-authorized costs | Mortgages authorize force-placed insurance and collection of premiums/commissions; cases like Cohen/Feaz foreclose challenge | Denied: pleading sufficient to allege material breach and breach of implied covenant (Avelar-Lemus dismissed for lack of pre-suit notice) |
| TILA disclosure obligations for force-placed charges | Premiums containing kickbacks are not exempt from TILA; defendants concealed composition so TILA claims may be equitably tolled | Force-placed premiums fall within TILA exceptions and are not finance charges requiring disclosure | Denied: TILA claims survive at pleading stage (equitable tolling alleged) |
| Unjust enrichment against EverBank and insurers | Plaintiffs allege unjust benefit conferred via inflated premiums/kickbacks | Existence of express mortgage contracts bars quasi-contract claim; insurers say no direct benefit; filed-rate doctrine bars challenge | Against EverBank: dismissed (express contract governs). Against insurers: unjust enrichment survives (except Avelar-Lemus under NY law) |
| Filed-rate / administrative-exhaustion defenses | Plaintiffs say they challenge collusive practices and composition of premiums, not reasonableness of filed rates | Insurers contend filed-rate doctrine and admin remedies preclude judicial attack on insurance rates | Denied at pleading stage: court treats filed-rate as merits defense; plaintiffs sufficiently plead non-rate-based misconduct and are not the primary ratepayers |
| RICO & NY GBL § 349 claims | Alleged scheme to defraud via kickbacks, misleading communications, and use of mail/wires | Defendants argue failure to plead mail/wire fraud with particularity, lack of proximate causation/reliance | Granted (dismissed without prejudice): RICO and NYDPA claims insufficiently pleaded as to materiality/causation and fraud particularity |
| Standing to assert nationwide state-law class claims | Plaintiffs seek to represent nationwide class; injuries common | Insurers urge lack of Article III standing for out-of-state claims and ask dismissal before class certification | Denied: court defers standing/class scope to Rule 23 stage; individual plaintiffs have standing for their states |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility pleading standard for Rule 8)
- Ashcroft v. Iqbal, 556 U.S. 662 (application of Twombly plausibility to pleadings)
- Cohen v. Am. Sec. Ins. Co., 735 F.3d 601 (7th Cir.) (addressing lender-placed insurance commissions/kickbacks)
- Feaz v. Wells Fargo Bank, N.A., 745 F.3d 1098 (11th Cir.) (lender-insurer force-placed insurance and commissions analysis)
- Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639 (use of mail/wire in RICO; direct first-party reliance not required for mail-fraud RICO predicate)
- Am. Dental Ass'n v. Cigna Corp., 605 F.3d 1283 (11th Cir.) (RICO/mail-and-wire-fraud heightened pleading under Rule 9(b))
- Lehman v. Lucom, 727 F.3d 1326 (11th Cir.) (elements of a RICO claim)
- Klay v. Humana, Inc., 382 F.3d 1241 (11th Cir.) (implications for class representatives asserting other states' laws)