The opinion of the court was delivered by: William M. Skretny Chief Judge United States District Court
Named plaintiffs, Howard and Bonnie Partell, bring this putative class action alleging that Defendant, Fidelity National Title Insurance Corporation ("FNTIC"), unlawfully overcharged them and other consumers for title insurance.*fn2 They assert common-law claims for money "had and received"*fn3 and unjust enrichment, as well as a claim under New York's General Business Law ("GBL") § 349.
FNTIC now moves to dismiss the complaint in its entirety. For the following reasons, that motion is denied.
A. Facts*fn4 In November of 2003, the Partells secured a mortgage on their home in the amount of $88,000. (Am. Compl., ¶ 6; Docket No. 14.) Three years later, the Partells refinanced their mortgage and obtained a new loan in the amount of $115,000 from Capital One Home Loans, LLC ("Capital One"). (Id., ¶ 7.) As part of that loan agreement, the Partells were required to purchase a title insurance policy protecting Capital One. This condition, called a loan or lender's title policy, is a typical condition imposed by lenders. It protects the lender against defects in title or outstanding liens, but does not benefit the borrower, who must obtain a separate policy. Fulfilling their obligation under the agreement, the Partells paid $653.00 for a lender title policy, which was issued by Defendant, FNTIC. (Id., ¶ 8.)
New York State, however, strictly regulates the premiums that title insurance companies, like FNTIC, are permitted to charge. (Id., ¶ 18.) The Title Insurance Rate Manual for New York State ("Rate Manual") contains rates filed with, and approved by, the New York Superintendent of Insurance; title insurers may not charge rates for lender title insurance policies that deviate from those filed rates. (Id., ¶ 18; N.Y. Ins. Law § 2314.) Although not specifically conceded in the complaint, it appears that the rate FNTIC charged -$653.00-would have been correct if the policy were not issued for a refinanced mortgage.
But because the Partells refinanced their home, and the title remained in their name, Section 14 of the Rate Manual requires that the policy be discounted by 50%.*fn5 (Id., ¶ 20.) The Partells, and, allegedly, others like them, were not provided this mandatory discount. (Id., ¶¶ 12, 37--39.) The Partells further allege that FNTIC knew that the title insurance at issue pertained to a refinanced home, but that FNTIC applied the full rate anyway. (Id., ¶ 29.)
This litigation followed.
On April 27, 2012, FNTIC removed this case, originally filed in New York State Supreme Court, to this Court. (Docket No. 1.)
On May 4, 2012, FNTIC filed a motion to dismiss. (Docket No. 6.) Shortly thereafter, however, the Partells amended their complaint (Docket No. 14), prompting FNTIC to renew their motion to dismiss as against the amended complaint (Docket No. 15). Briefing on that motion concluded on July 13, 2012, at which time this Court took the motion under advisement.
A. Motion to Dismiss Standard -- Rule 12(b)(6)
Rule 12(b)(6) allows dismissal of a complaint for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). Federal pleading standards are generally not stringent; Rule 8 requires only a short and plain statement of a claim. Fed. R. Civ. P. 8(a)(2). But the plain statement must "possess enough heft to show that the pleader is entitled to relief." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S. Ct. 1955, 1966, 167 L. Ed. 2d 929 (2007).
When determining whether a complaint states a claim, the court must construe it liberally, accept all factual allegations as true, and draw all reasonable inferences in the plaintiff's favor. ATSI Commc'ns, 493 F.3d at 98. Legal conclusions, however, are not afforded the same presumption of truthfulness. See Iqbal, 556 U.S. at 678 ("The tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.").
"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). Labels, conclusions, or a "formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555. Facial plausibility exists when the facts alleged allow for a reasonable inference that the defendant is liable for the misconduct charged. Iqbal, 556 U.S. at 678. The plausibility standard is not, however, a probability requirement: the pleading must show, not merely allege, that the pleader is entitled to relief. Id. at 678; Fed. R. Civ. P. 8 (a)(2). Well-pleaded allegations must nudge the claim "across the line from conceivable to plausible." Twombly, 550 U.S. at 570.
Courts therefore use a two-pronged approach to examine the sufficiency of a complaint, which includes "any documents that are either incorporated into the complaint by reference or attached to the complaint as exhibits." Blue Tree Hotels Inv. (Can.), Ltd. v. Starwood Hotels & Resorts Worldwide, Inc., 369 F.3d 212, 217 (2d Cir. 2004). This examination is context specific and requires that the court draw on its judicial experience and common sense. Iqbal, 556 U.S. at 679. First, statements that are not entitled to the presumption of truth-such as conclusory allegations, labels, and legal conclusions-are identified and stripped away. See Id. ...