Case Name:   Manny Villanueva vs. Fidelity National Title Company.

Case No.:       1-10-CV-173356

 

This is a class action by plaintiff Manny Villanueva (“Plaintiff”), individually and on behalf of other customers of Fidelity National Title Company (“FNTC”).  In the operative First Amended Class Action Complaint (“FAC”), Plaintiff alleges he refinanced his property in a transaction which had an escrow close date of May 31, 2006, and the escrow was handled by FNTC.[1]  Plaintiff alleges that in addition to charging Plaintiff $250 as a flat fee for handling the escrow, FNTC charged Plaintiff additional fees that were not lawful, including a $50 “Draw Deed” fee, a $15 “Courier” fee, and $11.20 for an “Overnight Delivery” fee.[2]

 

On or about July 27, 2012, the Court certified the proposed class, in part, as to Plaintiff’s claims that FNTC’s delivery fees violate California Insurance Code sections 12401.1 and 12414.27 because FNTC has not filed rates with the CDI for any type of delivery services (“Delivery Theory No. 1”) or “draw deed” services (“Draw Deed Theory”) and is therefore not allowed to charge for them.  The Court continued the motion as to Plaintiff’s unlawful delivery fees/filed rate theory (“Delivery Theory No. 2” or “Double-Charging Theory”) based on FNTC’s evidence that these fees were not always based on delivery of payments or disbursement proceeds, and Plaintiff did not set forth a method of proving liability under this theory with common evidence.[3]

 

On the continued motion, Plaintiff submitted that FNTC offices in California use one of two computer systems – NGS or SIMON – to process residential escrow transactions, and the information is compiled in the Fidelity Enterprise Document Repository (“FEDR”), a relational database that can be queried using custom code that Fidelity or an independent expert can readily compile.  Plaintiff argued that NGS and SIMON contain a “Check Register” showing the payoffs and disbursements in every escrow transaction that (1) lists by payee and date all disbursements made from the escrow, and (2) indicates whether payment was made by “Laser Check” or wire transfer.  Further, NGS and SIMON also list delivery fees and information about payoffs and payees (e.g., that a dispersal was a payment to a secured lender), and whether messenger or overnight services were used.  Plaintiff argued that FNTC could identify the Delivery Theory No. 2 class members by simply searching the database for those whose transaction involved the issuance of a check.  Plaintiff argued that if the data in FEDR proved inadequate to enable FNTC to adequately determine the restitution due, making a file-by-file review necessary, this would only be to determine the amount of restitution, not liability.

 

On September 28, 2012, the Court granted the continued motion for certification based on Delivery Theory No. 2, finding:

 

Plaintiff has shown that FNTC’s electronic databases contain ample records of every check issued in a transaction, the named payee on the check, the date of the check, the payee’s address, and invoices from the overnight deliverers also contain the escrow transaction number, and the address and date to which every single overnight delivery was made, and that these can all be queried electronically.  Thus, Plaintiff’s methodology, as the Court understands it, calls for more than just simple matching of checks and delivery fees.  It involves matching dates and addresses on the records for each check with the dates and address on the invoices from the overnight deliverers/couriers, and Plaintiff submits that the data can be compiled and merged into a single, searchable dataset.  Even if electronic search was not feasible and a file-by-file review was necessary to compile and match the relevant information, this by itself does not defeat class certification.  The Court finds that Plaintiff presents a reasonable method for identifying double-charging class members.  Liability under Plaintiff’s double-charging theory rests on interpretations of the filed rate language that are common to all members of the double-charging class, or to various definable subclasses (e.g., for counties with different filed rate language).

 

On December 31, 2012, the Court approved the parties’ Stipulated Class Action Notice Plan and ordered Plaintiff to pay for the costs of providing notice.[4]  The notice plan required FNTC to provide the notice administrator with the names and addresses of the buyers and sellers identified by FNTC as having been charged a fee coded as a courier or overnight delivery fee, as well as those identified through a search of FNTC’s data for escrow transactions during the class period in which the bill code description indicates that a fee was charged for the service of drawing some type of deed.[5]  The notice administrator would mail each person identified in the data extract a postcard containing a short form notice that provided a link to a Web site containing the long form notice.[6]  On February 8, 2013, the Court ordered FNTC to implement the data search protocols in the notice plan, and noticed was mailed on or about April 11, 2013, with an opt-out deadline of July 10, 2013.[7]

 

The trial date was originally set for September 16, 2013.  On July 9, 2013, the Court granted FNTC’s ex parte application for a continuance of the trial date to March 24, 2014.  On March 13, 2014, the trial was reset to April 15, 2014.  The case came on for court trial on April 15, 2014.  On July 31, 2014, the parties submitted proposed statements of decision.

 

FNTC now moves to decertify the class based on Delivery Theory No. 2.

 

Plaintiff moves for an order requiring FNTC to provide notice to class members that were not previously provided notice due to an error on the part of FNTC.

 

Motion to Decertify

 

FNTC argues that at trial, Plaintiff conceded the proposed data analysis plan based on FNTC’s electronic databases could not be implemented.  FNTC contends that Plaintiff never performed the data analysis or subpoenaed any third party delivery vendors’ invoices or data, and waited until after the original trial date to serve discovery regarding the trial plan, during which FNTC confirmed in verified discovery responses that it could not perform the proposed data matching.  FNTC submits that Plaintiff’s expert in data and statistics, Dr. Brian Kriegler, testified at trial that Plaintiff did not even ask him to attempt to implement Plaintiff’s data analysis, and he confirmed that the plan was not feasible because no electronic data exists that would allow one to tell whether a particular check was delivered by a third party vendor for a fee charged by that vendor and passed through to the class member.  According to FNTC, Dr. Kriegler testified that the only method to identify individuals with a claim under Delivery Theory No. 2 would involve individualized review of 500,000 escrow files, at 10-15 minutes per file, and Dr. Kriegler admitted this method would not be manageable.  FNTC argues that Plaintiff did not carry his burden to prove that Delivery Theory No. 2 could be proven with common, predominant class-wide proof, that the class members under Delivery Theory No. 2 were ascertainable, and that a class action is a superior and manageable means to adjudicate Delivery Theory No. 2.

 

Plaintiff argues the motion should be denied because FNTC has not established any new law or circumstances that might warrant decertification.  Plaintiff argues that it would be inequitable to grant the motion to decertify due to FNTC’s refusal to produce any class data and bring documents to trial.  Plaintiff argues the Court has broad discretion to order FNTC to review the class members’ escrow files and determine whether the charges were in accordance with the filed rates as judicially construed in this case.  Plaintiff cites the orders of two California Superior Courts placing the burden of reviewing business records to determine the amount of restitution due on the defendants.  Plaintiff argues that it is not inequitable to place the burden on FNTC because it is FNTC’s recordkeeping practices that make calculation of restitution more difficult.  Plaintiff alternatively argues that the Court should order FNTC to produce a representative sample of class members’ escrow files and order restitution based on the results of Dr. Kriegler’s statistical model.  Plaintiff argues that statistical sampling is a commonplace method for determining class restitution, and at trial, Dr. Kriegler gave persuasive testimony to support his expert opinion that the amount of restitution under the Double-Charging Theory can be determined with a high degree of accuracy (10-15% margin of error) by sampling 250-500 escrow files.

 

Plaintiff’s request for judicial notice of the Statement of Decision in Schwartz v. VISA International Corp., Superior Court of California, County of Alameda and the Joint Restitutionary Order in Amador v. M-2Collision Centers, Inc., Superior Court of California, County of San Diego is DENIED.  Plaintiff seeks to use this request for judicial notice in order to cite to unpublished trial court orders as persuasive authorities.  Because this would not be allowed for unpublished appellate opinions (see Cal. Rules of Court, rule 8.1115; People v. Webster (1991) 54 Cal.3d 411, 428, fn. 4), it should not be allowed for these trial court orders.

 

“Any party may file a motion to…[d]ecertify a class.”  (Cal. Rules of Court, rule 3.764(a)(4).  “Trial courts…have the obligation to decertify a class action if individual issues prove unmanageable.  [Citations.]”  (Duran v. U.S. Bank National Assn. (2014) 59 Cal.4th 1, 29.)  “Before judgment, a class action shall be decertified ‘only where it is clear there exists changed circumstances making continued class action treatment improper.’”  (Fireside Bank. v. Superior Court (2007) 40 Cal.4th 1069, 1081-1082.)  Here, the motion for decertification is brought before judgment, and although Plaintiff contends that there are no changed circumstances, the motion is based on the fact that at trial, Plaintiff did not provide the data analysis plan that he had proposed on certification of Delivery Theory No. 2.  Furthermore, the motion is based on the trial testimony of Plaintiff’s own expert.  Although the Court previously noted that the necessity of a file-by-file review would not necessarily defeat class certification, at the time of certification, the record had not yet established the difficulty and expense of a file-by-file review of escrow files.  At trial, Plaintiff’s expert admitted that a file-by-file review was not a manageable way to obtain the information needed to identify the Delivery Theory No. 2 class members and calculate their restitution.  The Court finds there are sufficient changed circumstances to permit FNTC’s motion for decertification.

 

The two certification requirements implicated here are ascertainability and predominance of common questions of law and fact.  “Class members are ‘ascertainable’ where they may be readily identified without unreasonable expense or time by reference to official records.  [Citation.]”  (Rose v. City of Hayward (1981) 126 Cal.App.3d 926, 932.)  As for the predominance of common questions of law and fact, “each member must not be required to individually litigate numerous and substantial questions to determine his [or her] right to recover following the class judgment; and the issues which may be jointly tried, when compared with those requiring separate adjudication, must be sufficiently numerous and substantial to make the class action advantageous to the judicial process and to the litigants.’  [Citation.]”  (Washington Mut. Bank FA v. Superior Court (Briseno) (2001) 24 Cal.4th 906, 913-914.)

 

FNTC argues the Delivery Theory No. 2 class members cannot be readily identified without an extensive file-by-file review of more than 500,000 escrow files, and Plaintiff’s expert, Dr. Kriegler, admitted this process would not be manageable.[8]  FNTC contends that due to the necessity of file-by-file review, individualized issues will predominate over common ones.

 

“In examining whether common issues of law or fact predominate, the court must consider the plaintiff’s legal theory of liability.  [Citation.]”  (Walsh v. Ikon Office Solutions, Inc. (2007) 148 Cal.App.4th 1440, 1450.)  Delivery Theory No. 2 is based on FNTC’s filed rate for “escrow” services.  Plaintiff contends that the service of “escrow” necessarily includes the service of delivery.  Plaintiff further contends that the express rate language of “ordering demands and making payoffs on up to two (2) previous loans by either check or wire transfer” and “disburse balance of proceeds, by either check or wire transfer, to up to 4 payees” must be read to include delivery because the purpose of “making payoff” is to get the money to the intended recipient, and “disbursement” is synonymous with delivery.  Thus, under Delivery Theory No. 2, the first two payoff checks and the first four disbursement checks should have been delivered for no separate delivery fee, and those who were assessed a delivery fee for such payoffs/disbursements were double-charged.

 

Accordingly, even if the Court were to adopt Plaintiff’s interpretation of the rate filings, in order to prove a double-charge under Delivery Theory No. 2, Plaintiff must still show that the overnight and/or courier fees incurred were for delivery of the first two payoff checks or the first four disbursement checks, as opposed to delivery of documents.  This issue was addressed during the certification stage and was the reason why the motion was initially continued as to Delivery Theory No. 2.  In his supplemental briefing, Plaintiff argued that the identity of those double-charged could be found in FNTC’s FEDR data.  “[T]he identity of the customers who were double-charged for disbursement of funds is readily ascertainable using Fidelity’s sophisticated Enterprise Data Repository (“FEDR”), in which all necessary information concerning escrow transactions input into NGS and SIMON is stored.”[9]  However, it appears now that FEDR does not provide the necessary data to identify a double charge under Plaintiff’s Delivery Theory No. 2.  Plaintiff admits “that post-certification discovery revealed that FNTC’s databases do not support the type of electronic query that Plaintiff initially envisioned[.]”[10]

 

Much of Plaintiff’s opposition to this motion is based on the premise that any individualized review of escrow files is only necessary to calculate restitution.  While it is true that “a class action is not inappropriate simply because each member of the class may at some point be required to make an individual showing as to his or her eligibility for recovery or as to the amount of his or her damages[,]” (see Sav-On, Inc. v. Superior Court (2004) 34 Cal.4th 319, 333), it now appears that a file-by-file review is required not only to calculate the amount of restitution but to establish the class’s right to recover due to differences among the class members’ escrow files.  FNTC provides an example of a customer who paid for a delivery fee but did not pay for the delivery of a check.  FNTC submits that in the escrow file for escrow number 352500, an overnight delivery fee of $15.80 is noted on both the HUD-1 and in the corresponding delivery fee data, and the disbursement data shows three checks disbursed in this transaction, but a review of the escrow file reveals that none of these checks are associated with an overnight delivery fee.  The only two deliveries in the file are to a bank and a Fidelity branch, neither of which are listed as recipients of checks in the disbursement data.  Thus, even assuming the filed rate language for escrow number 352500 contained the language challenged by Delivery Theory No. 2, there would be no double-charge for any payoff or disbursement check because no check was delivered for the $15.80 overnight delivery fee.  If the only way to know which of FNTC’s customers paid fees for delivery of payoff and disbursement checks is to do a file-by-file review, then FNTC’s liability as to each of these customers is not based on predominantly common facts or evidence, but on individualized facts from each escrow file.

 

Plaintiff cites Kraus v. Trinity Management Services (2000) 23 Cal.4th 116, Lebrilla v. Farmers Ins. Co. (2004) 119 Cal.App.4th 1070, Wolf v. Superior Court (2003) 107 Cal.App.4th 25 and Amaral v. Cintas Corp. No. 2 (2008) 163 Cal.App.4th 1157 for the position that the Court may, under its equitable powers, shift the burden to FNTC to review the class members’ escrow files, identify those who were double-charged, and calculate their restitution.  Kraus was not a class action but a UCL representative action by former tenants of the defendant property owner/manager challenging the defendant’s practices of requiring payment of nonrefundable security and administrative fees and assessing liquidated damages for early termination of the lease.  The California Supreme Court reversed the trial court’s order directing disgorgement into a fluid recovery fund because the Supreme Court held that a fluid recovery fund was not a remedy available in representative UCL actions.  However, the Supreme Court instructed that on remand, “the trial court should order defendants to identify, locate, and repay to each former tenant charged liquidated damages the full amount of funds improperly acquired from the tenant[.]”  (Kraus, supra, 23 Cal.4th at p. 138.)  Plaintiff argues that under Kraus, this Court may also order FNTC to review the escrow files to “identify” the Delivery Theory No. 2 class members.

 

Plaintiff acknowledges that Kraus pre-dates Proposition 64 but argues that this does not matter because Proposition 64 did not amend the remedies provision of the UCL and did not propose to curb the broad remedial purpose of the UCL.  However, Proposition 64 also requires UCL representative plaintiffs to “compl[y] with the class action statute (Code Civ. Proc., § 382)[.]”  (See Cal. Bus. & Prof. Code, § 17204; Madrid v. Perot Systems Corp. (2005) 130 Cal.App.4th 440, 445, fn. 1.)  Because Kraus pre-dated Proposition 64, there was no reason to consider the class action requirements of ascertainability or predominance of common issues in ordering the defendant to “identify” the represented claimants.  Furthermore, as discussed above, the issue raised in this decertification motion goes to liability, not just restitution/damages, because under Delivery Theory No. 2, the charging of a delivery fee is not a double-charge if it did not involve delivery of a check.  Thus, we are dealing with more than just the remedial portions of the UCL; we are dealing with liability questions that do not seem amenable to class treatment due to the predominance of individualized inquiries.

 

In Lebrilla, insureds brought a class action against their automobile insurer for violating the “like kind and quality” provision in their policies by using “imitation” crash parts in their vehicle repairs.  The insurer argued that the proposed declaratory relief interpreting the insurance policies would raise individualized issues, but the appellate court agreed with the insureds that the “onus of complying with the policy as judicially construed” was fairly placed on the insurer.  (Lebrilla, supra, 119 Cal.App.4th at p. 1086.)  Notably, by definition, all of the proposed class members in Lebrilla had imitation parts installed on their vehicles or had received the cash value of imitation parts.  (See id. at p. 1073, fn. 2.)  Here, even if the Court agreed with Plaintiff’s rate interpretation under Delivery Theory No. 2, ordering FNTC to identify double-charged class members would go beyond an “onus of compliance” because the judicially-construed rate language would not determine liability for those class members who did not pay for delivery of payoff/disbursement checks.

 

As for Wolf and Amaral, these cases deal with shifting the burden of proof where there was incomplete or inadequate recordkeeping by the defendant.  “California courts have shifted the burden of proof to employers when inadequate records prevent employees from proving their claims for unpaid overtime hours [citation] and unpaid meal and rest breaks [citation].”  (Amaral, supra, 163 Cal.App.4th at p. 1189.)  “In addition, California has long approved of burden shifting outside the wage and hour context when the parties have unequal access to evidence necessary to prove a disputed issue.”  (Ibid.)  “Where essential facts necessary to proof lie within the exclusive knowledge or control of one party, ‘fundamental fairness’ is what justifies shifting the burden of proof to this party.”  (Id. at p. 1190.)  Here, the issue is not incomplete or inadequately maintained records.  The records are complete, just voluminous and not electronically searchable.  The fact that FNTC did not keep the records in a manner that happened to suit Plaintiff’s Delivery Theory No. 2 is not an inadequacy in recordkeeping that should shift the burden of proof to FNTC on fundamental fairness grounds.

 

There is some dispute as to whether Plaintiff was given adequate access to the escrow files.  While FNTC argues that Plaintiff unreasonably waited until after the original trial date (September 16, 2013) to conduct the necessary discovery on Delivery Theory No. 2, Plaintiff demonstrates that he propounded discovery seeking production of the escrow documents very early in the lawsuit, and FNTC objected and produced only limited data.[11]  Plaintiff also issued a March 4, 2014 Notice to Appear and to Produce Documents and Records at Trial in which Plaintiff asked FNTC to bring various documents “from the escrow folder pertaining to each escrow transaction that FNTC has previously identified as having included a charge for a delivery fee: [¶]  a. The final HUD-1 closing statement  [¶]  b. The final check register  [¶]  c. All shipping and delivery invoices and receipts, including bills and invoices pertaining to each FedEx, UPS, California Overnight/OnTrac, or other overnight, courier, or messenger service for which the customer was charged.”[12]  However, FNTC refused on the grounds that the notice was duplicative, vague, and/or unduly burdensome.[13]

 

Nevertheless, even if FNTC had produced a full set of the escrow files, it is not disputed that a file-by-file review would be necessary to obtain the necessary information to prove FNTC’s liability for double-charging.  By all estimates, even if Plaintiff had obtained this evidence at the inception of the lawsuit, the review would not be complete.[14]  Plaintiff submits that Trial Exhibits 206 and 206A provide a representative escrow file with the computerized “check register” showing every check that FNTC wrote on Plaintiff’s escrow account, a list of the names and addresses of each of the payees, and copies of the “air bills” and invoices for each delivery made.  However, to the extent the relevant data can be retrieved only by individually reviewing each escrow file, it merely confirms the individualized nature of establishing the class members’ right to recover under Delivery Theory No. 2.

 

As an alternative to decertification, Plaintiff proposes statistical sampling.  Plaintiff argues that statistical sampling is a common method for determining restitution, and at Dr. Kriegler’s deposition, in his Rebuttal Declaration filed April 8, 2014, and at trial, Dr. Kriegler testified that the amount of restitution due for FNTC’s double-charging can be determined with a high degree of accuracy by sampling 250-500 of documents from the escrow files.  Dr. Kriegler testified that this approach would determine the restitution with a margin of error of only 10-15%.

 

Again, however, the issue raised in this motion pertains not only to damages/restitution, but liability.  “[B]roadly speaking, the law tolerates more uncertainty with respect to damages than to the existence of liability.  ‘Uncertainty of the fact whether any damages were sustained is fatal to recovery, but uncertainty as to the amount is not.’  [Citation.]”  (Duran, supra, 59 Cal.4th at p. 40.)  “Statistical methods cannot entirely substitute for common proof, however.  There must be some glue that binds class members together apart from statistical evidence.  While sampling may furnish indications of an employer’s centralized practices [citation], no court has ‘deemed a mere proposal for statistical sampling to be an adequate evidentiary substitute for demonstrating the requisite commonality, or suggested that statistical sampling may be used to manufacture predominate common issues where the factual record indicates none exist’ [citation].”  (Id. at p. 31.)  “If statistical evidence will comprise part of the proof on class action claims, the court should consider at the certification stage whether a trial plan has been developed to address its use.  A trial plan describing the statistical proof a party anticipates will weigh in favor of granting class certification if it shows how individual issues can be managed at trial.  Rather than accepting assurances that a statistical plan will eventually be developed, trial courts would be well advised to obtain such a plan before deciding to certify a class action.  In any event, decertification must be ordered whenever a trial plan proves unworkable.”  (Id. at pp. 31-32, original emphasis.)

 

Here, Plaintiff’s proposal for statistical sampling comes very late in the case.  At the certification stage, Plaintiff proposed a non-statistical data analysis for proving double-charges but now has abandoned that method.  FNTC has not had a sufficient opportunity to challenge the proposed sampling methodology in terms of sample size, variability, selection bias, and margin of error.  “[A] statistical plan for managing individual issues must be conducted with sufficient rigor.”  (Duran, supra, 59 Cal.4th at p. 31.)  “If sampling is used to estimate the extent of a party’s liability, care must be taken to ensure that the methodology produces reliable results.  With input from the parties’ experts, the court must determine that a chosen sample size is statistically appropriate and capable of producing valid results within a reasonable margin of error.”  (Id. at p. 42.)  Here, without more input from both parties’ experts, the Court cannot approve of the proposed sampling methodology.

 

For all of these reasons, FNTC’s motion to decertify the class as to Delivery Theory No. 2 is GRANTED.

 

Motion to Provide Notice to Previously Unnotified Class Members

 

Plaintiff moves for an order requiring FNTC to provide notice to class members who did not receive notice during the original notice period due to a mistake by FNTC.  According to Plaintiff, the failure to provide notice affects approximately 24,500 transactions in which a draw deed was charged.  The error was caused by FNTC’s IT department, which failed to provide FNTC’s counsel with a subfolder of draw deed data.  According to Plaintiff, at the pre-trial conference, FNTC’s counsel agreed that in light of the error, FNTC would have to bear the risk of the unnotified class members not being bound by any adverse judgment in the case, but defense counsel later refused to enter into the proposed stipulation.[15]

 

FNTC argues that the requested notice would violate the rule against “one-way intervention” because there have been a number of merits rulings adverse to the class since the original notice went out, and the unnoticed class members may now decide to opt-out of the class based on those adverse rulings and try to bring the same claims all over again, in violation of FNTC’s due process rights.  FNTC further argues that the relevant legal authorities only require that the notice procedures have a reasonable chance of reaching a substantial percentage of class members, and here, sufficient notice was provide to the class via the Internet.

 

One-way intervention refers to “ ‘a procedure under which potential members of the class can reserve their decisions to become part of the class until the validity of the cause asserted by the named plaintiffs on behalf of the class has been determined.’ [Citation.]”  (Frazier v. City of Richmond (1986) 184 Cal.App.3d 1491, 1500-1501.)  “A victory by the plaintiff would be followed by an opportunity for other members of the class to intervene and claim the spoils; a loss by the plaintiff would not bind the other members of the class. [ ]  So the defendant could win only against the named plaintiff and might face additional suits by other members of the class, but it could lose against all members of the class.”  (Fireside Bank, supra, 40 Cal.4th at pp. 1077, 1078.)  “To prevent one-way intervention, courts must ensure that affected parties are bound before the merits are decided; to bind absent plaintiffs, courts must give them notice; and to give plaintiffs notice, courts must first resolve whether and on what scale a class is appropriate.”  (Id. at p. 1083.)  However, the rule against one-way intervention can be waived “where a defendant either fails to object or itself initiates a merits motion before class certification and notice have been resolved.”  (Id. at p. 1082.)

 

Here, FNTC does not dispute that its own mistake that led to the current problem.  The merits rulings that FNTC points to were the result of FNTC’s own motions, after FNTC failed to send out the notices as ordered.  Although this may not constitute “waiver” of the rule against one-way intervention (since it is not contended that FNTC knew of the IT department’s mistake at the time FNTC filed its merits motions), it would still be unfair for FNTC to benefit from its own mistake, at the class members’ expense.

 

FNTC further argues that for class members with small individual stakes, the law only requires that the notice procedures have a reasonable chance of reaching a substantial percentage of class members, and here, sufficient notice was provide to the class via the Internet.  FNTC cites California Rules of Court, rule 3.766(f) for the position that where individual class members hold an insubstantial stake, the Court may order notice through the Internet.  However, the issue here is not the failure of a properly-implemented notice plan to ensure actual notice to every class member.  Rather, the problem is that the notice plan was not implemented as agreed and approved due to FNTC’s failure to provide the mailing information to the notice administrator.  And even if notice via the Internet would have been approved in the first instance, it would had to have been designed to reach as many FNTC customers as reasonably possible.  Here, the Internet notice that FNTC refers to is the posting of the long form notice on Plaintiff’s counsel’s Web sites and on a dedicated site, FNTC.Escrow.Fee.Lawsuit.com, and it was the mailed postcards that provided links these sites.  This was not the kind of broadly disseminated online notice that could reasonably guarantee reaching as many FNTC customers as possible, such as a posting on FNTC’s own Web site.  (Cf. Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 251 [“Apple also posted notice on its Internet homepage for over 30 days”].)

 

Given the late stage of proceedings, the Court feels the best practical solution to this problem is to exclude the un-notified 24,500 individuals from the class, as FNTC’s counsel previously agreed to in principle at the pre-trial conference.[16]

 

[1] First Amended Class Action Compl. (“FAC”) ¶ 6.

[2] FAC ¶ 9.

[3] Under Delivery Theory No. 2, the delivery fees for making payoffs for the first two loans on a property and for disbursing the proceeds for up to four payees are already covered by the applicable escrow rate.

[4] See Decl. Gertler ISO Mot. for Order Requiring Defendant to Provide Notice to Previous Unnoticed Class Members, Exhs. 1 and 2.

[5] Decl. Gertler ¶ 3.

[6] Ibid.

[7] Ibid, Exh. 3.

[8] See Trial Tr. at 785:4-17.

[9] Pltf’s Reply ISO Class Cert. at p. 7, Exh. F to Decl. Michael J. Gleason ISO FNTC.

[10] Pltf’s Opp. to Mot. to Decertify at p. 1.

[11] See Decl. Nance Becker in Opp. to Mot. to Decertify ¶¶ 4-7, and Exh. A.

[12] Decl. Becker ¶ 8.

[13] Ibid.

[14] FNTC estimates that it would take more than 6 years to review all of the 500,000 escrow files at 10-15 minutes each.

[15] See Decl. Jonathan Gertler  ¶ 6, Exh. 5 (FNTC’s May 2, 2014 correspondence).

[16] See Decl. Gertler ¶ 6.