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Case 3:08-cv-00642-MMH-HTS Document 70 Filed 09/09/2009 Page 1 of 22 UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA JACKSONVILLE DIVISION GAIL NOLAN and WILLIAM BUSH, individually and on behalf of all others similarly situated, Plaintiffs, CASE NO.: 3:08-cv-642-J-34HTS vs. CLASS ACTION INTEGRATED REAL ESTATE PROCESSING, LP, a foreign Limited Partnership, Defendant. / ORDER GRANTING PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT THIS CAUSE came before the Court on Plaintiffs' Motion for Preliminary Approval of Class Action Settlement, Dissemination of Notice, and Setting of a Final Fairness Hearing and Memorandum in Support Thereof (Dkt. No. 56; Motion for Preliminary Approval), filed on May 4, 2009. In the Motion for Preliminary Approval, Plaintiffs, Gail Nolan and William Bush, represent that a settlement has been reached in this case following extensive arm's-length negotiations and mediation. See Motion for Preliminary Approval at 2. As such, Plaintiffs request that the Court do the following: (1) preliminarily approve the proposed settlement, (2) approve the proposed notice and method of providing notice to class members, (3) certify the class for settlement purposes, (4) appoint Plaintiffs as class representatives, (5) appoint Plaintiffs' counsel as class counsel, and (6) schedule a final fairness hearing for final approval of the settlement of the class action. See id. at 1. Plaintiffs represent that Defendant "joins in the request for relief sought in the Motion." Case 3:08-cv-00642-MMH-HTS Document 70 Filed 09/09/2009 Page 2 of 22 See id. at 22. The Court has subject matter jurisdiction over this matter1 and has reviewed the Motion for Preliminary Approval together with all other submissions of the parties. I. Procedural History This action was initiated in the Fourth Judicial Circuit in and for Duval County, Florida, but was removed to this Court by the Defendant on June 25, 2008. See Defendant's Notice of Removal at 1 (Dkt. No. 1). Plaintiffs' Class Action Complaint (Dkt. No. 2; Complaint) asserts several causes of action against Defendant, Integrated Real Estate Processing, L.P., arising from Defendant's alleged practice of charging excessive title insurance premiums in mortgage refinancing transactions in violation of section 627.780, Florida Statutes, and Rule 69O-186.003(2)(b), Florida Administrative Code. See Complaint at ¶¶ 1, 12 17, and 18. The Complaint includes claims for unjust enrichment, breach of contract, breach of contract implied in fact, and breach of third-party 1 The matter was removed to this Court by Defendant on June 25, 2008, based on 28 U.S.C. § 1332. See Defendant's Notice of Removal (Dkt. No. 1; Notice of Removal). In the Notice of Removal, Defendant sufficiently alleged that the threshold amount in controversy is met in this matter. See Notice of Removal at 4. With regard to citizenship, Defendant, Integrated Real Estate Processing, LP represented that it is a limited partnership whose general and limited partners are citizens of, and have their principal places of business in, Pennsylvania. See Notice of Removal at 4; Notice of Removal at Exhibit "C." (Dkt. No. 1-4; Declaration of Annette Almonte in Support of Defendant's Notice of Removal). However, the allegations for the basis of diversity jurisdiction in the Notice of Removal and its supporting documentation failed to provide sufficient information concerning the citizenship of Defendant's member partners. See Notice of Removal at Exhibit "C." At a hearing on the Motion for Preliminary Approval conducted by the Court on July 29, 2009, the Court requested additional information from Defendant regarding the citizenship of Defendant's general and limited partners, which Defendant provided on August 4, 2009. See Defendant's Verified Submission of Additional Information Regarding Subject Matter Jurisdiction (Dkt. No. 63; Notice Regarding Jurisdiction). However, the Notice Regarding Jurisdiction still did not provide sufficient information about the citizenship of Defendant's limited partner in order for the Court to determine that diversity existed. Thus, on August 27, 2009, the Court further directed that Defendant provide additional information concerning the citizenship of Defendant's limited partner, see Order (Dkt. No. 68), which Defendant did on September 2, 2009, see Defendant's Second Verified Submission of Additional Information Regarding Subject Matter Jurisdiction (Dkt. No. 69). In light of the information provided by Defendant, the Court is satisfied that it has diversity jurisdiction over this matter. See 28 U.S.C. § 1332(d)(2). 2 Case 3:08-cv-00642-MMH-HTS Document 70 Filed 09/09/2009 Page 3 of 22 beneficiary contract. See id. at 9, 10, 11, and 13. On July 22, 2008, Defendant filed Defendant's Motion to Dismiss Class Action Complaint, with Memorandum of Law in Support Thereof (Dkt. No. 5; Motion to Dismiss). In the Motion to Dismiss, Defendant disputes that there is a private cause of action for a violation of Rule 69O-186.003(2)(b). See id. at 14. Additionally, Defendant contends that Plaintiffs have failed to demonstrate (1) that the conditions for entitlement to the reduced premium rate were met in their transaction; (2) that Defendant had a duty to disclose potential reduced premium rates; and (3) that Plaintiffs, or any other putative class member, would be entitled to damages, injunctive relief, or attorney's fees. See Motion to Dismiss at 6-7, 11, 12. Defendant also asserts that Plaintiffs have failed to state any claim for which the Court can grant relief. See id. at 14-18. Plaintiffs filed a memorandum opposing the Motion to Dismiss, see Plaintiffs' Memorandum in Opposition to Defendant's Motion to Dismiss Class Action Complaint (Dkt. No. 10; Memorandum in Opposition), along with three appendices, which include decisions from similar cases in state courts, as well as information regarding settlements of similar actions, see Dkt Nos. 11-13. The Court record reflects that the parties exchanged discovery. See Plaintiffs' Motion to Compel Responses to Plaintiffs' First Set of Interrogatories (Dkt. No. 31), Plaintiffs' Motion to Compel Responses to Plaintiffs' First Request for Production (Dkt. No. 32), and Order (Dkt. No. 49). Thereafter, on February 11, 2009, the parties participated in a lengthy mediation conference which resulted in an "agreed outline for the terms and conditions of a class action settlement." See Plaintiffs Notice of Filing Declaration of Mediator Michael Hanzman, Esq. in Further Support of Plaintiffs' Motion for Preliminary 3 Case 3:08-cv-00642-MMH-HTS Document 70 Filed 09/09/2009 Page 4 of 22 Approval of Class Action Settlement, Dissemination of Notice, and Setting of Final Fairness Hearing and Memorandum in Support Thereof (Dkt. No. 60; Mediator's Declaration). After executing a final settlement agreement, on April 22, 2009, the parties informed the Court of their desire to continue the upcoming preliminary pre-trial conference and permit Plaintiffs up to and including May 4, 2009, to file a motion for preliminary approval of the settlement. See Joint Motion to Continue Pre-Trail Conference (Dkt. No. 53). With the permission of the Court, Plaintiffs filed the instant Motion for Preliminary Approval on May 4, 2009, and also provided the Court with a copy of the settlement agreement at Exhibit 1. See Motion for Preliminary Approval at Exhibit 1 (Settlement Agreement). Attached to the Settlement Agreement is a proposed notice which the parties propose should be disseminated to class members. See Settlement Agreement at Exhibit A. On July 29, 2009, the Court conducted a hearing on the Motion for Preliminary Approval, at which time various issues concerning the Motion for Preliminary Approval and the proposed notice were discussed. In order to permit the parties to address those issues, the Court directed the parties to submit a revised proposed class notice. On August 26, 2009, the parties complied with the Court’s directive and submitted a revised proposed class notice. See Stipulation as to Revised Class Notice and Class Definition at Exhibit "A" (Dkt. No. 66; Proposed Class Notice). II. Terms of Settlement Agreement Pursuant to the Settlement Agreement, the parties agree, for settlement purposes only, to the certification of a defined settlement class (Settlement Class). See Settlement Agreement at 3, 7. The Settlement Class, which includes 22,016 potential members (Class 4 Case 3:08-cv-00642-MMH-HTS Document 70 Filed 09/09/2009 Page 5 of 22 Members), see Motion for Preliminary Approval at 7, is defined by the parties as follows: All persons and entities who paid a title insurance premium to Defendant in a mortgage refinancing transaction for a lender's policy of title insurance covering real property located in the State of Florida written by Defendant, and were charged, in whole or in part, the Original Rate for the title insurance premium, on or after January 1, 2003, and up to and including March 31, 2009. Excluded from the Class are Defendant, its parents, subsidiaries and affiliates, its directors and officers, and members of their immediate families. See Stipulation as to Revised Class Notice and Class Definition at 1 (Dkt. No. 66; Stipulation). The Settlement Agreement further provides that to resolve all claims arising from alleged insurance overcharges in mortgage refinancing transactions during the class period, Defendant's insurer will establish a common fund in the amount of Eight Hundred Thousand Dollars ($800,000) (Common Fund) for the benefit of the Settlement Class. See Motion for Preliminary Approval at 3-4. Costs of administration of the claims of Class Members and Plaintiffs' attorneys' fees and costs will be paid from the Common Fund with the remaining balance available for distribution to Class Members in accordance with the Settlement Agreement. See id. at 3-4, 11. Pursuant to the Settlement Agreement, Plaintiffs' Counsel's fee can be no more than thirty percent (30%) of the Common Fund, or $240,000, and Plaintiffs' Counsel will be reimbursed up to a maximum of $10,000 for costs. See Settlement Agreement at 18. In addition to their share of the Common Fund, named Plaintiffs, Gail Nolan and William Bush, will also receive "incentive awards" of $500 each. See id. The Settlement Agreement reflects that Defendant is ceasing its operations and the amount of the Common Fund reflects the balance of Defendant's wasting insurance policy. See Motion for Preliminary Approval at 11-12. 5 Case 3:08-cv-00642-MMH-HTS Document 70 Filed 09/09/2009 Page 6 of 22 III. Discussion A. Class Certification In the Motion for Preliminary Approval, the parties request that the Court preliminarily certify the Settlement Class for purpose of considering the proposed settlement. Before certifying a class for settlement purposes, a district court must analyze the requirements of Rule 23, Federal Rules of Civil Procedure (Rule(s)). Amchem Products, Inc. v. Windsor, 521 U.S. 591, 620 (1997). Even if the defendant does not contest class certification, the district court must still find that the class certification requirements are satisfied. See Valley Drug Co. v. Geneva Pharmaceuticals, Inc., 350 F. 3d 1181, 1188 (11th Cir. 2003). Pursuant to Rule 23, class certification is appropriate if "(1) the class is so numerous that joinder of all members would be impracticable; (2) there are questions of fact and law common to the class; (3) the claims or defenses of the representatives are typical of the claims and defenses of the unnamed members; and (4) the named representatives will be able to represent the interests of the class adequately and fairly." See id. at 1187-88; Rule 23(a)(1)-(4). A party seeking class certification must establish these four prerequisites to class certification, commonly referred to as the "numerosity, commonality, typicality, and adequacy of representation" requirements, as well as one of the alternative requirements set forth in Rule 23(b). See Valley Drug, 350 F. 3d at 1188. "Failure to satisfy any one of these four factors and at least one of the alternative requirements of Rule 23(b) precludes class certification." Id. Moreover, a district court cannot substitute its finding that a settlement is fair for the satisfaction of the requisite criteria for class certification. See Amchem Products, 521 U.S. 591, 622. 6 Case 3:08-cv-00642-MMH-HTS Document 70 Filed 09/09/2009 Page 7 of 22 According to the Motion for Preliminary Approval, the Settlement Class includes 22,016 putative members, including Plaintiffs. See Motion for Preliminary Approval at 7. The proper focus for the numerosity requirement is whether the joinder of all class members would be impracticable in view of their number and all other relevant factors. See Phillips v. Joint Legis. Comm., 637 F. 2d 1014, 1022 (5th Cir. 1981).2 While there is no fixed class size that will satisfy the numerosity requirement, the Court has no hesitation in finding that joinder of 22,016 individuals who refinanced mortgages with Defendant for property located in the State of Florida over the course of a period of six years, would be impracticable. Thus, the Court concludes that the numerosity threshold is easily satisfied. The second requirement, commonality, demands that there be questions of law or fact common to the class. This requirement is satisfied "where plaintiffs allege common or standardized conduct by the defendant toward members of the proposed class." Elkins v. Equitable Life Ins. of Iowa, No. 96-296-CIV-T-17B, 1998 WL 133741, *11 (M.D. Fla. January 27, 1998). Plaintiffs allege that Defendant engaged in standardized conduct violative of Florida Statutes and the Florida Administrative Code. Specifically, Plaintiffs allege that Defendant routinely charged excessive title insurance premium rates in mortgage refinancing transactions despite the fact that they were eligible for and entitled to the discounted premium rate pursuant to Florida law. See Complaint at ¶¶ 1, 24, 28, 29. Given the factual allegations, the Court finds that there are questions of fact common to the 2 The decisions of the former Fifth Circuit Court of Appeals before October 1, 1981, have been adopted as binding precedent in this Circuit. See Bonner v. City of Prichard, 661 F. 2d 1206, 1209 (11th Cir. 1981). 7 Case 3:08-cv-00642-MMH-HTS Document 70 Filed 09/09/2009 Page 8 of 22 Settlement Class. Moreover, as the alleged misconduct of Defendant is based on the type of transaction and a common course of conduct, the legal issues of whether the Defendant's practices violate Florida Statutes and the Florida Administrative Code and whether Defendant was unjustly enriched are questions of law, which at least, in part, would be common to all members of the class. As such, the Court finds the commonality requirement is satisfied. Next, the Court must determine whether the claims or defenses of the named Plaintiffs are typical of the claims or defenses of the Settlement Class. The prerequisites of commonality and typicality both "focus on whether a sufficient nexus exists between the legal claims of the named class representatives and those of individual class members to warrant class certification." See Prado-Steiman v. Bush, 221 F. 3d 1266, 1278 (11th Cir. 2000). While commonality is concerned with group characteristics of a class as a whole, typicality "refers to individual characteristics of the named plaintiff in relation to the class." See id. at 1279. Typicality is satisfied if the claims of the named plaintiff "stem from the same event, practice, or course of conduct that forms the basis of the class claims and are based upon the same legal or remedial theory." Ault v. Walt Disney World Co., 254 F.R.D. 680, 687 (M.D. Fla. 2009). Here, Plaintiffs have legal standing in their own right to raise the legal claims alleged in the Complaint, as they claim to have been damaged by the allegedly improper practices of Defendant. The damages and any claims of the Class Members would stem from the same allegedly improper practice of Defendant of charging the incorrect title insurance premium rate in mortgage refinancing transactions. Thus, the claims of the Class Members stem from the same practice or course of conduct by 8 Case 3:08-cv-00642-MMH-HTS Document 70 Filed 09/09/2009 Page 9 of 22 Defendant. Moreover, all of the claims are based on the same legal theories. Thus, the typicality requirement of Rule 23(a)(3) is also satisfied. The fourth prerequisite to class certification set forth in Rule 23(a) requires a demonstration that the representative parties "will fairly and adequately protect the interests of the class." See id. at 687; Rule 23(a)(4). Generally, the adequacy of representation depends on the named plaintiff's apparent ability to diligently prosecute the action through competent and experienced counsel and the named plaintiff's lack of interests antagonistic to those of the class. See Ault, 254 F.R.D. at 687. Defendant does not contest the ability of Plaintiffs to diligently prosecute this action nor the qualification, experience or competence of Plaintiffs' Counsel. Based upon this Court's familiarity with this case and its observation of Plaintiffs' Counsel, the Court is sufficiently satisfied that Plaintiffs are acting through competent, qualified and experienced counsel. Additionally, Defendant has not suggested that Plaintiffs have any interest that conflicts with the interests of the Settlement Class. The Court independently discerns none. Indeed, Plaintiffs' Counsel and Plaintiffs appear to have tried to achieve the maximum possible recovery for the Class Members considering Defendant's inability to operate as a going concern and the funds available to Defendant to resolve this matter. Additionally, the Court recognizes that the Settlement Agreement provides for payments of $500 to each named Plaintiff. Given the total amount available from the Common Fund, and the amount of possible recovery for each Class Member, the Court finds that this amount appears to be fair and reasonable considering the named Plaintiffs' roles in this action. The Settlement Agreement does not offer any indication of 9 Case 3:08-cv-00642-MMH-HTS Document 70 Filed 09/09/2009 Page 10 of 22 discrimination among Class Members, and each Class Member who makes a valid and timely claim is entitled to recover the amount they were charged in excess of the appropriate premium rate or an otherwise pro rata share of the excess premium from the Common Fund. Accordingly, for purposes of preliminary approval, the Court determines that the interests of the class appear to have been fairly and adequately represented by Plaintiffs. Thus, the Court finds that for the purposes of preliminarily approving the proposed settlement, the prerequisites set forth in Rule 23(a) are satisfied. Finally, "a class action may be maintained if Rule 23(a) is satisfied" and the action falls within one of three types of class actions recognized in Rule 23(b). See Rule 23(b). In the Complaint, which was filed before removal of the action to this Court, Plaintiffs suggest that the Settlement Class can be certified under Rules 1.220(b)(2) and (b)(3), Florida Rules of Civil Procedure.3 In recognition of the fact that the Federal Rules of Civil Procedure now apply, in the Motion for Preliminary Approval, Plaintiffs suggest that the Settlement Class can be maintained under Rule 23(b)(3).4 See Motion for Preliminary Approval at 9. A Rule 23(b)(3) class action may be maintained if "the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy." Rule 23(b)(3). An inquiry 3 Rules 1.220(b)(2) and (b)(3), Florida Rules of Civil Procedure, closely track the language of Rule 23(b)(2) and (b)(3), respectively. 4 In the Motion for Preliminary Approval, Plaintiffs made reference to the Settlement Class being certified under either Rule 23(b)(1)(A) or 23(b)(3). See Motion for Preliminary Approval at 9. However, at the July 29, 2009 hearing, Plaintiffs' Counsel agreed that certification would be proper only under Rule 23(b)(3). 10 Case 3:08-cv-00642-MMH-HTS Document 70 Filed 09/09/2009 Page 11 of 22 into the predominance of common questions of law or fact "tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation." See Amchem Products, 521 U.S. at 623. Here, common issues of law and fact arise from Defendant's alleged practice of collecting excessive title insurance premiums from Class Members during mortgage refinancing transactions. See Mitchell-Tracey v. United General Title Ins. Co., 237 F.R.D. 551, 559-60 (D. Md. 2006) (finding conditional certification of class seeking reimbursement of excess title insurance premiums appropriate under Rule 23(b)(3)); Markocki v. Old Republic National Title Ins. Co., 254 F.R.D. 242, 250-52 (E.D. Pa. 2008) (finding questions of law and fact to predominate over individual issues for purposes of certifying class alleging payment of excess title insurance premium pursuant to Rule 23(b)(3)); Mims v. Stewart Title Guaranty Co., 254 F.R.D. 482, 487-88 (N.D. Tex. 2008) (finding federal and state law claims predominated over individual issues in order to grant certification of Rule 23(b)(3) class seeking reimbursement of excess title insurance premium charged by defendant). This Court recognizes that there may be individual factual questions with respect to the claims of each Class Member, however, "the existence of a few individual questions will not negate the predominance of common issues." See Fuller v. Becker & Poliakoff, 197 F.R.D. 697 701 (M.D. Fla. 2000). Additionally, the United States Supreme Court has found that the predominance requirement is easily met in cases alleging consumer fraud. See Amchem Products, 521 U.S. at 625. Moreover, neither Plaintiffs nor Defendant suggest that individual factual questions arising from the claims of the Class Members would interfere with the resolution of the common issues. As such, the undersigned concludes that common issues predominate over any individual issues. 11 Case 3:08-cv-00642-MMH-HTS Document 70 Filed 09/09/2009 Page 12 of 22 Turning to the superiority requirement of Rule 23(b)(3), the Court considers "the relative advantages of a class action suit over whatever other forms of litigation might be realistically available to the plaintiffs." Klay v. Humana, Inc., 382 F.3d 1241, 1269 (11th Cir. 2004). Rule 23(b)(3) contains a list of factors to consider when making a determination of superiority: (A) the class members' interest in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already begun by or against class members; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and (D) the likely difficulties in managing a class action. Rule 23(b)(3). The Court has considered the above factors and finds that each weighs in favor of preliminary certification of the Settlement Class and approval of the proposed settlement. The relative advantages of a class action suit in this case are apparent when the Court considers the fact that the average anticipated recovery for each Class Member is less than $200. Indeed, in Amchem Products, the Supreme Court acknowledged that the "very core of the class action mechanism is to overcome the problem that small recoveries do not provide an incentive for any individual to bring a solo action prosecuting his or her rights." 521 U.S. at 617. The individual members of the Settlement Class would lack incentive to pursue individual actions when the possible recovery would likely be far outweighed by the expense of such action. Also, where as here, the common issues predominate, it would be far more efficient to have the common issues litigated in a single action, as opposed to thousands of individual actions. The Court concludes that the class action would be manageable because the majority of the relevant documentation concerning each refinancing transaction would be in the control of Defendant and the 12 Case 3:08-cv-00642-MMH-HTS Document 70 Filed 09/09/2009 Page 13 of 22 calculation of damages as to each Class Member would be a straightforward and mechanical mathematical calculation. Therefore, the Court finds that the requirements of Rule 23(b)(3) are met in this case, and will conditionally certify the Settlement Class as defined above for the purpose of considering the parties proposed settlement.5 B. Preliminary Approval of Settlement Terms Rule 23(e), Federal Rules of Civil Procedure (Rule(s)), provides that a court may approve a proposed class action settlement "only after a hearing and on the finding that it is fair, reasonable, and adequate." See Rule 23(e)(2). Although, the Court need not make a final determination of the fairness, reasonableness, and adequacy of the proposed settlement at this stage of the proceedings, the Court must make a preliminary finding that the proposed settlement is sufficiently fair, reasonable, and adequate on its face to warrant presentation to the class members. See William B. Rubenstein, Newberg on Class Actions § 11:25 (4th ed.) (citing The Manual for Complex Litigation § 30.41 (3d ed.)) ("If the preliminary evaluation of the proposed settlement does not disclose grounds to doubt its fairness or other obvious deficiencies...the court should direct that notice under Rule 23(e) be given to the class members of a formal fairness hearing, at which arguments and evidence may be presented in support of and in opposition to the settlement."). Thus, the Court has examined the terms of the proposed settlement in order to make a preliminary determination of whether it appears to be sufficiently fair, reasonable, and adequate to 5 The Court recognizes several decisions from other districts certifying classes in cases involving claims similar to those raised here by Plaintiffs. See Mims, 254 F.R.D. at 489; Markocki, 254 F.R.D. at 251; Randleman v. Fidelity National Title Ins. Co., 251 F.R.D. 267 (N.D. Ohio 2008); Woods v. Stewart Title Guaranty Co., Case No. CCB-06-0705, 2007 WL 2872219 (D. Md. September 17, 2007); Cohen v. Chicago Title Ins. Co., 242 F.R.D. 295 (E.D. Pa. 2007); Mitchell-Tracey, 237 F.R.D. at 560. 13 Case 3:08-cv-00642-MMH-HTS Document 70 Filed 09/09/2009 Page 14 of 22 warrant granting the relief requested in the Motion for Preliminary Approval. Additionally, the Court acknowledges that the parties represent that the Settlement Agreement was reached after the parties conducted discovery and participated in a lengthy mediation. Upon preliminary review, the terms of the Settlement Agreement appear to be sufficiently fair, reasonable, and adequate to warrant presentation to the Settlement Class. Thus, the Court will turn its attention to the question of class notice. C. The Class Notice Recognizing that before any proposed settlement can be finally approved, the parties must provide notice to all class members who would be bound by the proposed settlement, and that the Court must hold a fairness hearing at which any objections to the proposed settlement can be considered, the parties have provided the Court with a Proposed Class Notice. The parties suggest that the Proposed Class Notice be mailed in booklet format to each Class Member's current addresses within thirty (30) days of this Order and be available for review on a website. See Settlement Agreement at 12. In addition, the parties represent that Class Members will be able to call a 1-800 telephone number to obtain additional information concerning the class action and the settlement. See Proposed Class Notice, generally. Rule 23(e) requires a court to "direct notice in a reasonable manner to all class members bound" by the proposed settlement. See Rule 23(e)(1). With regard to Rule 23(b)(3) classes, the Rule states that the court must direct to class members the best notice that is practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort. The notice must clearly and concisely state 14 Case 3:08-cv-00642-MMH-HTS Document 70 Filed 09/09/2009 Page 15 of 22 in plain, easily understood language: (i) the nature of the action; (ii) the definition of the class certified; (iii) the class claims, issues, or defenses; (iv) that a class member may enter an appearance through an attorney if the member so desires; (v) that the court will exclude from the class any member who requests exclusion; (vi) the time and manner for requesting exclusion; and (vii) the binding effect of a class judgment on members. Rule 23(c)(2)(B). Thus, the Rule requires that "individual notice must be sent to all class members whose names and addresses may be ascertained through reasonable effort." Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 173 (1974). Additionally, due process requires that the "notice must be 'reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.'" See id. at 174 (quoting Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950)). "In every case, reasonableness is a function of anticipated results, costs, and amount involved." In re Nissan Motor Corp. Antitrust Litigation, 552 F.2d 1088, 1099 (5th Cir. 1977). Reasonableness also depends on the information available to the parties. See id. at 1098. Upon review of the proposed settlement and supporting documentation, the Court identified certain deficiencies in the initial proposed class notice requiring correction. As such, the parties were directed to provide the Court with an agreed amended form, which they did on August 26, 2009. The newly filed Proposed Class Notice informs the Class Members of the nature of the action, see Proposed Class Notice at ¶¶ 1, 3; the definition of the class, see id. at ¶6; the claims, issues, and defenses, see id. at ¶¶ 3, 4; that Class Members may obtain their own counsel in the matter, see id. at ¶ 16; the choice Class Members have to be excluded from the class, see id. at ¶¶ 7, 12, 19; the time and manner 15 Case 3:08-cv-00642-MMH-HTS Document 70 Filed 09/09/2009 Page 16 of 22 for requesting exclusion from the class or objecting to the proposed settlement, see id. at ¶ 7, 12, 18, 19; the party that will administer the claims and the settlement (Claims Administrator), see id. at ¶ 13; and the binding effect of the settlement on Class Members that do not opt-out, see id. at ¶ 12. Thus, the Proposed Class Notice includes the information required by Rule 23(c)(2)(B). Although the Proposed Class Notice provides the above referenced information, upon review of the Proposed Class Notice, the Court found it necessary to make certain revisions, which are reflected in the Revised Proposed Class Notice, which is attached to this Order. The Court is satisfied that the Revised Proposed Class Notice, as modified by the Court, and attached hereto, satisfies the notice requirements of Rule 23. Thus, the Court will approve the Revised Proposed Class Notice and direct that Notice be distributed to the Settlement Class in the form of the Revised Proposed Class Notice attached to this Order. Finally, the Court recognizes that in the Class Action Fairness Act (CAFA), 28 U.S.C. § 1715 additional notice requirements are imposed on defendants in class action lawsuits. At the July 29, 2009 hearing, Defendant represented to the Court that it has complied with the notice requirements under § 1715, and on August 4, 2009, Defendant filed Defendant's Notice of Compliance with CAFA (Dkt. No. 62), in which it represents that the notices of the proposed settlement required by CAFA were sent in May 2009. IV. Conclusion Upon consideration of the Motion for Preliminary Approval, the proposed Settlement Agreement, and the Revised Proposed Class Notice as well as all matters of record, the 16 Case 3:08-cv-00642-MMH-HTS Document 70 Filed 09/09/2009 Page 17 of 22 Court finds that there is good cause to preliminarily approve the proposed settlement, subject to further consideration by the Court at a fairness hearing. The Court concludes that the proposed settlement is sufficiently fair, reasonable, and adequate to warrant submitting the proposed settlement to the Class Members and setting a fairness hearing. Thus, the Court determines that it is appropriate to grant the Motion for Preliminary Approval. Accordingly, it is ORDERED, as follows: 1. The Motion for Preliminary Approval (Dkt. No. 56) is GRANTED. 2. The Court, having found that Plaintiffs have met the prerequisites to class certification set forth in Rule 23, Federal Rules of Civil Procedure, conditionally certifies the following class, for purposes of the proposed settlement only: All persons and entities who paid a title insurance premium to Defendant in a mortgage refinancing transaction for a lender's policy of title insurance covering real property located in the State of Florida written by Defendant, and were charged, in whole or in part, the Original Rate for the title insurance premium, on or after January 1, 2003, and up to and including March 31, 2009. Excluded from the Class are Defendant, its parents, subsidiaries and affiliates, its directors and officers, and members of their immediate families. If the Court does not grant final approval of the settlement in accordance with the Settlement Agreement, or if the settlement is terminated in accordance with the terms of the Settlement Agreement, then the Settlement Agreement, and the certification of the Settlement Class provided herein, will be vacated and the litigation shall proceed as though the Settlement Class had never been certified, without prejudice to any party's position on the issue of class certification or any other issue. 17 Case 3:08-cv-00642-MMH-HTS Document 70 Filed 09/09/2009 Page 18 of 22 3. For purposes of considering the proposed settlement, the Court conditionally designates Plaintiffs, Gail Nolan and William Bush, as Class Representatives. Counsel for Plaintiffs, Marc A. Wites, Esq. and Michael O. Massey, Esq., shall continue to represent the class. The reasonableness and fairness of a separate payment to Class Counsel for fees not to exceed thirty percent (30%) of the Common Fund and reimbursement of costs shall be determined at the Fairness Hearing. Affidavits and documentation in support of any requested award of fees and costs shall be included with the papers submitted by Class Counsel in support of any motion for final approval of the settlement. 4. The Court preliminarily approves the terms of the Settlement Agreement as being a fair, reasonable, and adequate resolution of the dispute between the parties. 5. A final hearing (Fairness Hearing) will be held on Thursday, January 14, 2010, at 2:00 p.m. in Courtroom 10B at the United States Courthouse6, 300 North Hogan Street, Jacksonville, Florida 32202, at which time the Court will consider whether the proposed settlement should be finally approved as fair, reasonable, and adequate and whether a final judgement should be entered. The Court may adjourn and/or continue the Final Fairness Hearing without further notice to Settlement Class Members. 6. The Court preliminarily approves the Revised Proposed Class Notice, which is attached to this Order, for distribution to potential members of the Settlement Class. The Revised Proposed Class Notice shall be disseminated by mail and through an internet website. Within 30 days of this Order, notice shall be mailed to Class Members at their last 6 The parties are reminded that photo identification is required to enter the United States Courthouse. In addition, cellular telephones and laptop computers are prohibited in the Courthouse. 18 Case 3:08-cv-00642-MMH-HTS Document 70 Filed 09/09/2009 Page 19 of 22 known addresses, in accordance with the terms of the Settlement Agreement. Class Counsel shall establish a dedicated internet website and shall maintain and update the website throughout the period during which Class Members may submit their claims. No later than 10 days before the Fairness Hearing, Class Counsel shall file with the Court proof that the Revised Proposed Class Notice has been mailed and the website published, in accordance with the terms of the Settlement Agreement and this Order. 7. All discovery and other proceedings in this action are stayed until further order of the Court, except as may be necessary to implement the settlement or comply with the terms of the Settlement Agreement. 8. The Court may, for good cause, extend any of the deadlines set forth in this Order without further notice to the Class. 9. Any person wishing to opt out of, or be excluded from, the Settlement Class shall individually sign and timely submit a written notice of such intent to a designated Post Office Box established by the Claims Administrator,7 as set forth in the Revised Proposed Class Notice. The written notice must clearly manifest an intent to be excluded from the Settlement Class. To be legally effective, all requests for exclusion must be received on or before the deadline for exclusion set forth in the Revised Proposed Class Notice. The Claims Administrator shall provide copies of any and all requests for exclusion to counsel for the parties no later than 10 days before the Fairness Hearing. Class Counsel shall file and serve a list of all individuals or entities who timely and effectively request exclusion. 7 The Claims Administrator shall be retained by Plaintiffs' Counsel in accordance with the terms of the Settlement Agreement. 19 Case 3:08-cv-00642-MMH-HTS Document 70 Filed 09/09/2009 Page 20 of 22 10. All persons falling within the definition of the Settlement Class who do not request to be excluded from the Settlement Class shall be bound by the terms of this Settlement Agreement, the Judgment entered thereon, and all orders entered by the Court in connection with the settlement set forth in the Settlement Agreement. Persons who submit valid and timely notices of their intent to be excluded from the Settlement Class shall neither receive any benefits, nor be bound by the terms, of the Settlement Agreement. 11. Each Class Member desiring to object to the proposed settlement shall have a right to appear and be heard at the Fairness Hearing provided that such person files with the Court and delivers to Class Counsel and Defendant's counsel a timely written notice of his or her objection. Such objection shall state: (i) proof that the objector is a Class Member under the Settlement Agreement (including all necessary documentation required by the Settlement Agreement and the Revised Proposed Class Notice for claims submitted), (ii) a statement of each objection being made: (iii) a description of the facts and/or legal theory for each objection, if any; (iv) a list of witnesses who may be called to testify at the Fairness Hearing, if any; and (v) a list of exhibits, along with copies of the exhibits, that the objector may offer during the Fairness Hearing, if any. All of these documents must be both filed with the Clerk of the United States District Court for the Middle District of Florida by the objector, and delivered to the Class Counsel and Defendant's counsel, no later than the deadline for Objections set forth in the Revised Proposed Class Notice. Class Counsel and Defendant's counsel may, but need not, respond to the objections, if any, by means of a memorandum of law of no more than 15 pages filed and served no later than eleven (11) days prior to the Fairness Hearing. 20 Case 3:08-cv-00642-MMH-HTS Document 70 Filed 09/09/2009 Page 21 of 22 12. Class Members who intend to make a claim under the settlement shall do so in accordance with the requirements and procedures set forth in the Revised Proposed Class Notice. Class Members who fail to submit a claim shall be forever barred from receiving any such benefit, but will in all other respects be subject to and bound by the provisions of the Settlement Agreement, the releases contained therein, and the final judgment of this Court. Claim forms must be received by the Claims Administrator thirty (30) days before the Fairness Hearing. 13. Neither the Settlement Agreement nor the settlement contained therein, nor any act performed or document executed pursuant to or in furtherance of the Settlement Agreement or the settlement: (i) is or may be deemed to be, or may be used as an admission of, or evidence of, the validity or lack thereof of any Released Claim, or of any wrongdoing or liability of Defendant; or (ii) is or may be deemed to be, or may be used as an admission of, or evidence of, any fault or omission of Defendant, in any civil, criminal, or administrative proceeding in any court, administrative agency, or other tribunal. 14. In the event the Court does not grant final approval of the proposed settlement of this action or the Settlement Agreement is otherwise terminated or rescinded in accordance with its terms, the parties shall be restored to their respective positions in the litigation, except that the scheduled litigation deadlines shall be reasonably extended so as to avoid prejudice to any party or litigant. In such event, the terms and provisions of the Settlement Agreement shall have no further force and effect with respect to the parties and shall not be used in the litigation or in any other proceeding for any purpose, and any 21 Case 3:08-cv-00642-MMH-HTS Document 70 Filed 09/09/2009 Page 22 of 22 judgment or order entered by the Court in accordance with the terms of the Settlement Agreement shall be treated as vacated, nunc pro tunc. DONE AND ORDERED at Jacksonville, Florida, this 9th day of September, 2009. lc10 Copies to: Counsel of Record 22
"H CIVIL JAX cv Nolan Preliminary Approval Order Class"