Villanueva v. Fidelity National Title Co.


In Villanueva v. Fid. Nat'l Title Co., 2018 Cal. App. LEXIS 802 (Ct. App. Sep. 7, 2018), the Sixth District Court of Appeal reversed a judgment against underwritten title company Fidelity National Title Company ("Fidelity") in a class action lawsuit alleging violation of Unfair Competition Law ("UCL") predicated on Fidelity's alleged failure to comply with Insurance Code section 12414.27, which prohibits underwritten title companies from charging rates for services that are not in accordance with the rates on file with the Department of Insurance ("DOI"). The appellate court held the lawsuit was barred by the statutory immunity provision found in Insurance Code section 12414.26, which provides, in relevant part, that "[n]o act done, action taken, or agreement made pursuant to the authority conferred by Article 5.5. . . of this chapter shall constitute a violation of or grounds for prosecution or civil proceedings under any other law of this state heretofore or hereafter enacted which does not specifically refer to insurance."

In 2006, plaintiff Manny Villanueva ("Villanueva") and his wife utilized Fidelity to provide escrow services when they were refinancing their home. In addition to its base rate, Fidelity charged additional fees for document preparation, a "Draw Deed" fee, and overnight delivery and courier fees for services provided by outside vendors. Fidelity's schedule of rates on file with the DOI governing the Villanuevas' transaction included a "document preparation" fee but did not include rates for delivery or courier services performed by outside vendors or a "Draw Deed" fee. Villanueva filed a class action lawsuit against Fidelity, alleging it had engaged in unlawful conduct by charging him and others fees for delivery services and "Draw Deed" services that were not listed on Fidelity's rate filings.

At trial, plaintiffs argued four distinct theories of liability. Under "Delivery Theory No. 1," plaintiffs argued Fidelity's charges for delivery services provided by third party vendors were unlawful because the rates for third party delivery services were not included in Fidelity's rate filings with the DOI. Under "Delivery Theory No. 2," plaintiffs argued the charges were unlawful because they were for services included in Fidelity's base rate and, therefore, Fidelity had billed its customers twice for the same services. Under the "General Draw Deed Theory," a subset of plaintiffs argued that Fidelity could not charge its filed rate for "document preparation" for preparing a deed if the customer's closing statement described the service as "draw deed" services rather than "document preparation." Finally, under the "Gap Period Theory," a subset of plaintiffs involved in real estate transactions during a 21-month period in which Fidelity's rate filings did not include a...

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