United States: 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 rate for "document preparation" for real estate transactions ("Gap Period") argued that Fidelity's charges for drawing a deed were unlawful, even if Fidelity's filed rate for "document preparation" authorized draw deed services in other instances.

On Fidelity's motions for nonsuit during trial, under Delivery Theory No. 1, the trial court found that Fidelity had violated Insurance Code section 12414.27 ("Section 12414.27") by charging for delivery services not included in its rate filings, and concluded Delivery Theory No. 2 was moot. The trial court found in favor of Fidelity on the General Draw Deed Theory, but held that charging for drawing a deed during the Gap Period was unlawful. The trial court also rejected Fidelity's statutory immunity claim pursuant to Insurance Code section 12414.26 ("Section 12414.26"). 

On appeal, Fidelity argued, in relevant part, that it was immune from suit under Section 12414.26 because the Insurance Commissioner has exclusive original jurisdiction over all matters related to the making, filing, and use of its rates. Specifically, the question presented was "whether the statutory immunity in Chapter 1 (§ 12414.26) bars this action challenging the use rates for which there have been no rate filings; rates that have neither been approved nor accepted by the Insurance Commissioner."

In addressing this question, the appellate court examined the California Supreme Court's decision in Quelimane Co. v. Stewart Title Guar. Co., 19 Cal. 4th 26 (1998), the only published California decision discussing statutory immunity pursuant to Section 12414.26. The Quelimane Court held that the Insurance Code does not displace the UCL "except as to title insurance company activities related to rate setting," and found that the action at issue was not barred by Section 12414.26 immunity because it involved an alleged conspiracy to refuse to sell title insurance on certain types of property, rather than rate setting activities. The appellate court examined several other California and federal decisions discussing Section 12414.26 and analogous immunity provisions, summarizing their findings as follows:

In summary, the cases hold that the immunity provisions in the Insurance Code (§§ 1860.1, 11758, 12414.26) barred civil actions that challenged as excessive auto insurance rates that had been approved by the Insurance Commissioner (Walker, supra, 77 Cal.App.4th at pp. 756–757), the use of rating factors that had been approved by the Insurance Commissioner to set auto insurance rates (MacKay, supra, 188 Cal.App.4th at p. 1449–1451), and a race discrimination case that was actually a challenge to title insurance rates that had been accepted by the Insurance Commissioner (Lyons, supra, 2009 U.S. Dist. Lexis 119859, *15). On the other hand, statutory immunity did not bar civil actions that were unrelated to ratemaking, including actions based on an alleged conspiracy to refuse to provide title insurance (Quelimane, supra, 19 Cal.4th at pp, 44–46, 51); false advertising (Krumme, supra, 123 Cal.App.4th at pp. 936–937); misallocating medical-legal expenses in reports submitted to the Workers' Compensation Insurance Rating Bureau (SCIF, supra, 24 Cal.4th at pp. at pp. 932, 942, 944); violating statutes that regulate insurance brokers (Krumme, at pp. 936–937); and charging illegal rebates, kickbacks, and commissions (In re California Title Ins. Antitrust Litigation, supra, 2009 U.S.Dist. Lexis 103407).

The appellate court found the circumstances presented in Villanueva to be "more like the cases that involved activities related to ratemaking than those that did not." The appellate court reasoned that Delivery Theory No. 2 and the General Draw Deed Theory challenged the language of Fidelity's filed rates.

These theories required the court to interpret Fidelity's rate filings to determine whether they encompassed the charges at issue. This was a challenge to the rates as filed by Fidelity. Since these theories challenged the "basic classifications of ... services [Fidelity established] to be used as the basis for determining rates" (§ 12401.2) and the rate schedules Fidelity filed with the Insurance Commissioner (§ 12401.1), they involved acts done "pursuant to the authority conferred by Article 5.5" (§ 12414.26) and are subject to the immunity. Thus, we disagree with the trial court's conclusion that the section 12414.26 immunity did not apply to Delivery Theory No. 2 and the General Draw Deed Theory.

The more challenging question in the court's view was whether Section 12414.26 immunity applied to Delivery Theory No. 1 and the Draw Deed Theory of the Gap Period plaintiffs, as these claims alleged Fidelity charged for services not included in its rate filings and were, therefore, not accepted by the Insurance Commissioner. The appellate court concluded the claims made pursuant to these theories of liability likewise fell within the authority conferred by Article 5.5 and were thus subject to Section 12414.26 immunity:

The statutes in article 5.5 directed Fidelity to establish basic classifications of services to use as the basis for determining its rates (§ 12401.2), to file its schedules of rates with the Insurance Commissioner (§ 12401.1), to indicate the character and extent of the services contemplated in its rate filings (§ 12401.1), and prohibited Fidelity from using any rate "prior to its effective date nor prior to the filing with respect to such rate having been publicly displayed and made readily available to the public for a period of no less than 30 days ..." (§ 12401.7). Fidelity failed to establish rates for third party delivery services and document preparation for sales escrows during the Gap Period (§ 12401.2). And although Fidelity filed rate schedules with the Insurance Commissioner throughout the class period, its rate filings failed to indicate the character and extent of all the services contemplated (§ 12401.1). Fidelity also used rates or charges prior to any effective date established by a rate filing in violation of section 12401.7. Thus, Fidelity failed to comply with sections 12401.1, 12401.2, and 12401.7, all of which are in article 5.5 of Chapter 1. In our view, this conduct constitutes "act[s] done ... pursuant to the authority conferred by Article 5.5" (§ 12414.26). Thus, the claims under Delivery Theory No. 1 and the General Draw Deed Theory claims of the Gap Period Plaintiffs are also barred by the section 12414.26 immunity.

The appellate court found that a review of the statutory scheme governing the Insurance Commissioner's exclusive original jurisdiction strengthened its construction of Section 12414.26:

[T]he statutes governing administrative review of rates support the conclusion that the Insurance Commissioner's plenary authority over ratemaking extends to "any rate charged" and "every rate" not just the rates set forth in a rate filing that has been accepted by the Insurance Commissioner. Plaintiffs allege Fidelity failed to comply with article 5.5 by charging rates for services that were not listed in its rate filings and failing to include rates for third party delivery services and some document preparation in its rate filings. The statutes in articles 6.7 and 6.9 of Chapter 1, particularly sections 12414.13, 12414.14, and 12414.21, expressly provide that Plaintiffs' claims fall within the exclusive original jurisdiction of the Insurance Commissioner. Thus, articles 6.7 and 6.9 of Chapter 1 support our conclusion that this case is barred by the immunity in section 12414.26.

Finally, the appellate court rejected Plaintiffs' argument that Fidelity's conduct was expressly excluded from Section 12414.26 immunity by the language of Section 12414.27, which provides:

Commencing 120 days following January 1, 1974, no [regulated title entity] shall charge for any title policy or service in connection with the business of title insurance, except in accordance with rate filings which have become effective pursuant to Article 5.5 ... or as otherwise authorized by such article; provided, however, where a rate is on file with the commissioner and in effect immediately prior to such date, such rate shall continue in effect until a new rate filing is thereafter made and becomes effective in the manner provided in Article 5.5 ... of this chapter.

Plaintiffs argued Section 12414.27 prohibited Fidelity from charging for services for which it had not filed a rate with the DOI and because Section 12414.27 is contained in Article 6.9, not Article 5.5, Section 12414.26 immunity did not apply. The appellate court framed the issue as whether: (a) Section 12414.27 carves out an exception to Section 12414.26 immunity; or (b) Section 12414.27 merely establishes an operative date for the rate filing and regulatory scheme of Article 5.5. In reviewing the language of the statute – which made no reference to Section 12414.26 – and its legislative history, the appellate court determined that Section 12414.27 was merely an implementing statute establishing a delayed operative date for regulated entities to comply with the new statutory scheme and rate filing requirements. The court further determined that in addition to Section 12414.27, other statutes contained in Article 5.5 impliedly prohibited Fidelity from charging customers for services for which no rate was filed, thereby bringing the alleged conduct within the purview of the statutory immunity provision:

As we have observed, sections 12401.1 and 12401.2 required Fidelity to establish classifications of services to be used as the basis for its rates, file its schedules of rates with the Insurance Commissioner, and indicate in its rate filings the character and extent of the services contemplated. (§§ 12401.1, 12401.2.) Section 12401.7 prohibited Fidelity from using any rate prior to its effective date or prior to the rate filing with respect to that rate having been publicly displayed and made readily available for 30 days prior to its effective date. (§ 12401.7.) Here, Fidelity failed to establish classifications of services for draw deed services for sales transactions during the Gap Period and for third party delivery services. It also failed to indicate in its rate filings that it intended to charge for those services and used rates before they were included in a rate filing. By charging for such services, Fidelity has violated sections 12401.1, 12401.2, and 12401.7, which are in article 5.5. Thus, its conduct was subject to the section 12414.26 immunity.

Consequently, the appellate court concluded that Section 12414.26 immunity applied to bar Plaintiffs' claims for violation of the UCL.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions