Jepson v. Ticor Title Ins. Co., 2007 WL 3171442 (W.D. Wash. 2007) (Slip Copy).

Poor Mr. Jepson, he refinanced his home worth more than $260,001, but less than $510,001, and was overcharged $9.00 by Ticor. Given the price of real estate in Seattle he probably should have felt more ripped-off by his realtor. Nevertheless, Jepson took his anger out on Ticor Title Insurance Company for the $9.00 overcharge. While he was at it, he decided to invite some friends along and file in federal court under our favorite federal law since the repeal of prohibition, CAFA.

In accordance with Washington law, Ticor posted premium rates which represent the maximum amount that can be charged to consumers for corresponding title insurance coverage. Jepson refinanced his Seattle home and was charged a premium $9.00 higher than the allowable rate filed in Ticor’s schedule. Obviously ticked off upon the revelation, Jenson filed a putative class action on behalf of himself and others similarly overcharged. 

Jenson’s claims did not involve a federal question so the court determined subject matter jurisdiction under CAFA. Of course you are all regular www.CAFAlawblog.com readers and know that CAFA jurisdiction exists when the class comprises more than 100 members, where minimal diversity of citizenship is present, and where the aggregate amount of all class members’ claims exceed $5 million exclusive of costs or attorneys’ fees. Unfortunately, Jenson doesn’t regularly read our blog.

The court honed in on the amount in controversy. Plaintiff originally pled that the premium fee paid was “significantly higher than the corresponding fee in [Ticor’s] official rate list.” Of course it was later determined this significant amount was $9.00. The plaintiff later amended his complaint to allege that the matter in controversy exceeded $5 million. The court did not buy his argument and determined that Jenson failed to conduct any type of investigation regarding damages before filing his complaint. Because Jenson did not file his complaint in good faith, the court determined it did not have to follow the legal certainty test espoused by the 9th Circuit (Abrego v. The Dow Chemical Co., 443 F.3d 676, 683 (9th Cir. 2006), when a plaintiff overtly alleges damages in excess of $5 million, jurisdiction is proper unless the Court finds to a “legal certainty” that such damages are impossible.). (Editors’ Note: See the CAFA Law Blog analysis of Abrego posted on May 25, 2006). 

Ticor attributed the overcharge to a computer glitch. It presented evidence that the total amount in controversy could not exceed $25,000.00 Even if the court awarded treble damages, the $5 million threshold could not be met. The court dismissed the putative class. (K. Ferachi)