Appellate court reverses ruling in suit against Fidelity National Title over fees

By Charmaine Little | Sep 21, 2018

SAN JOSE – On Sept. 7, the Court of Appeal of the State of California, 6th Appellate District reversed a lower court's ruling in favor of a class action representative that claimed Fidelity National Title Co. unlawfully charged mailing fees.

The court remanded the case to the Santa Clara County with orders to vacate the judgment and enter a new one dismissing the action and also affirmed the post-judgment order denying the plaintiffs' motion for attorney's fees.

Manny Villanueva and Fidelity challenged a judgment from a bench trial in the lawsuit filed by Villanueva and the class that claimed Fidelity violated the state's Unfair Competition Law (UCL).

The plaintiffs say Fidelity illegally “charged overnight mail delivery fees, courier fees, and document preparation or ‘draw deed’ fees that were not listed in its schedule of rates filed with the Department of Insurance in violation of Insurance Code provisions governing the business of title insurance,” according to the ruling.

Fidelity responded and said the lawsuit was blocked by the statutory immunity in section 12414.26 because it concerns rate charges. The Superior Court disagreed and said the fees were indeed illegal since they weren’t a part of the company’s rate schedules. The Superior Court granted the plaintiffs injunctive relief but also dismissed their restitution claims. Both companies appealed the decision.

The appeals court determined Fidelity’s immunity defense under section 12414.26 isn’t subject to the policy because it concerns the court’s subject-matter jurisdiction. Considering this, the appeals court agreed with Fidelity that the action is barred under the immunity mentioned in the section and that it’s under the insurance commissioner’s jurisdiction as it concerns Fidelity’s ratemaking. The appeals court reversed the lower court’s decision.

In that appeal, the plaintiffs argued the trial court should have awarded them restitution while Fidelity said the lower court didn’t have subject matter jurisdiction considering the section in question concerns ratemaking. The plaintiffs also added Fidelity relinquished its immunity defense while Fidelity said the class lacked standing. Fidelity pointed out via the statutory scheme, it only had to give rates for the services it provided, and not the ones third parties offered. It said other charges that would come across as unlawful were OK'd by the Insurance Code. Therefore, the trial court made a mistake when it enjoined previous actions that probably won’t be repeated, Fidelity argued.

For the second appeal, the plaintiffs said the trial court should not have denied their motion for attorney’s fees. Fidelity also appealed the trial court’s ruling that ordered awarding costs to the plaintiffs, including their motion to tax Fidelity’s costs.

The appeals court reiterated that since it agreed the civil action could not be filed by statutory immunity, the plaintiffs are no longer the winners of the case, so they aren’t owed attorney fees. In this situation, it affirmed the lower court’s order that denied the plaintiffs’ request for attorney fees. It also reversed the lower court’s order that awarded the plaintiffs their costs and ruled a new directive that would award Fidelity its costs. It remanded the case to the lower court so it could decide how much that would be.

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