Consumers who allege a kickback scheme between Bank of America and Genuine Title filed a motion to certify a class of consumers impacted by the alleged scheme.
The case is Tracie Parker Dobbins, et al. v. Bank of America, N.A. (U.S. District Court for the District of Maryland, No. SAG-17-0540).
The named plaintiffs in this case, Tracie Parker Dobbins and Gladys Parker, seek to represent a class of borrowers that “(1) have or had a loan originated or brokered by BANA, and (2) received title and settlement services in connection with the closing of the loan from Genuine Title, LLC.”
They alleged that they obtained a mortgage from Bank of America, N.A., in 2010 as joint tenants, to refinance their home. Their broker, Michael Bendebba, referred them to Genuine Title for settlement services. Dobbins and Parker used Genuine Title based on Bendebba’s recommendation. Bendebba received free marketing materials from Genuine Title in exchange.
Dobbins and Parker allege that their payments to Genuine Title were shared in part with Bank of America in violation of RESPA. They also argue that, because of the kickback arrangement, they paid higher costs for their settlement services than they otherwise would have paid.
Dobbins and Parker provided additional information about the alleged kickback scheme in their amended complaint, arguing that Brandon Glickstein formed Competitive Advantage Media Group to facilitate kickback payments and offer free marketing materials to lenders in exchange for referrals to Genuine Title. In addition, they allege that Genuine Title also offered “turn down kickbacks,” wherein Genuine Title provided information on borrowers who had not qualified for a loan from one lender to another lender with whom the borrower could qualify. In exchange for that information, the lender referred the borrower to Genuine Title.
U.S. District Judge Richard Bennet had granted Bank of America’s motion to dismiss the suit, holding that the plaintiffs’ RESPA claim was barred by the one-year statute of limitations and that equitable tolling could not salvage the claim. The U.S. Court of Appeals for the Fourth Circuit reversed that decision on appeal, finding that the plaintiffs had sufficiently alleged that Bank of America engaged in affirmative acts of concealment and therefore the one-year statute of limitations might be tolled. The appellate court remanded for further proceedings.
Dobbins and Parker now are seeking certification of the following class of individuals: “All individuals in the United States who were borrowers on a federally related mortgage loan (as defined under the Real Estate Settlement Procedures Act, 12 U.S.C. § 2602) originated or brokered by Bank of America, N.A. for which Genuine Title provided a settlement service, as identified in Section 1100 on the HUD-1, between Jan, 1, 2009 and Dec. 31, 2014. Exempted from this class is any person who, during the period of Jan. 1, 2009 through Dec. 31, 2014, was an employee, officer, member and/or agent of Bank of America, N.A., Genuine Title LLC and/or Competitive Advantage Media Group, LLC.”
U.S. District Judge Stephanie Gallagher granted the plaintiffs’ motion to certify the class.
Bank of America first argued that nearly all the exhibits Dobbins and Parker offered to show the class cannot be considered by the court. The bank specifically argued that the depositions taken in other proceedings are barred by Federal Rule of Civil Procedure 32 and that an affidavit, emails and a spreadsheet generated from data obtained from Genuine Title are barred by the Federal Rules of Evidence.
Gallagher found that Rule 32 did not bar her consideration of the depositions and that she didn’t need to rely on the other disputed evidence to certify the class.
Bank of America also argued that the lead plaintiffs lack Article III standing and cannot represent the class. Gallagher noted that although Bank of America correctly argued that Dobbins and Parker cannot establish standing by alleging a deprivation of impartial and fair competition alone, Dobbins and Parker have presented an additional injury — that they paid higher settlement charges because of the kickback scheme.
“In arguing that Genuine Title would have charged them a lower fee, had it not to account for its kickback payments, the plaintiffs have alleged more than a bare statutory violation and, moreover, have presented some evidence to corroborate the claim that they were harmed by paying higher fees than they would have absent the alleged RESPA violation,” Gallagher said. “In a similar case, this court held that standing in a RESPA suit is sufficiently established at the class certification stage, even where the parties present contradicting evidence about whether the alleged harm to the plaintiffs actually occurred. Upon similar circumstances in this case, the court reaches the same result.
“The court expresses no view at this time as to whether the plaintiffs or any other of the putative class members were overcharged for services rendered by Genuine Title,” she continued. “The court merely concludes that at this stage of the proceedings, the plaintiffs have proffered enough evidence to meet the requirements of Article III standing. As more factual development occurs, it may become clear that the plaintiffs were not overcharged for title and settlement services. Accordingly, Bank of America may continue to challenge the plaintiffs’ Article III standing as this litigation proceeds, particularly at the summary judgment stage.”
In addressing the elements of class certification, Gallagher noted that the case hinged on predominant common issues of law and fact and that Bank of America argued that whether a particular borrower’s services were the result of a RESPA violation and whether the statute of limitations should be equitably tolled will require individual inquiries into every class member’s transaction and circumstances.
Gallagher disagreed with Bank of America, holding first that Dobbins and Parker have shown that individualized scrutiny of each class member’s transaction is not necessary, having provided direct and circumstantial evidence that Bank of America was involved in a specific kickback scheme with Genuine Title that affected every class member’s transaction.
She also held that whether the statute of limitations should be tolled because of fraudulent concealment presented common questions and can be established without individual issues predominating.