Henson v. Fid. Nat'l Fin., Inc.

MELISSA HENSON and KEITH TURNER,on Behalf of Themselves and All Others Similarly Situated, Plaintiffs v. FIDELITY NATIONAL FINANCIAL, INC., Defendant

CASE NO. 1:13-CV-01452-AWI-JLT

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA

Dated: February 18, 2014

ORDER GRANTING DEFENDANT'S

MOTION TO CHANGE VENUE AND

TRANFERRING VENUE TO THE

CENTRAL DISTRICT OF CALIFORNIA

(Document #6)

I. INTRODUCTION

MELISSA HENSON and KEITH TURNER (collectively, "Plaintiffs") bring this class action against FIDELITY NATIONAL FINANCIAL, INC. ("Defendant") alleging violations of Sections 8(a) and 8(b) of the Real Estate Settlement Procedures Act ("RESPA"). Defendant has filed a motion pursuant to Federal Rule of Civil Procedure 12(b)(3) challenging venue. Defendant requests that the Court dismiss this action pursuant to 28 U.S.C. Section 1406(a). Alternatively, Defendant requests that the Court transfer this action to the Central District of California ("CDC") pursuant to either 28 U.S.C. Section 1406(a) or 1404(a). Alternatively, Defendant contends this action should be dismissed pursuant to the 12(b)(6) motion. For the reasons set forth below, Defendant's 12(b)(3) motion will be GRANTED and the case will be transferred to the CDC. The 12(b)(6) motion will be DENIED without prejudice.

II. BACKGROUND

The complaint alleges that Plaintiffs and the purported class members each utilized the services of at least one of several named title and/or escrow companies in connection with the purchase and/or refinancing of their homes. Compl. at ¶¶6-7. The complaint alleges that Defendant is the parent corporation of the title and/or escrow companies that provided settlement services to Plaintiffs. Compl. at ¶¶6-7. The title and/or escrow companies include Fidelity National Title Company, Chicago Title Company, Ticor Title Company, Security Union Title Company, Alamo Title Company, Lawyers Title Company, and Commonwealth Land Title Company. Compl. at ¶7. The complaint alleges that "in connection with the handling of the processing and closing of [the] real estate settlements] and escrows performed by [the] subsidiaries] of the Defendant," Plaintiffs were required to pay fees for overnight delivery services by delivery companies chosen by the title and escrow companies. Compl. at ¶6. The delivery companies that the complaint alleges were used include UPS, Federal Express, and OnTrac. Compl. at ¶6. Plaintiffs allege that Defendant directed its subsidiaries to utilize those selected delivery companies for delivery services related to Plaintiffs' real estate settlements and escrows and that Plaintiffs were charged for those services. Compl. at ¶¶6-7. The complaint alleges that throughout this time Defendant had in effect "master agreements" with each delivery company regarding the real estate transaction delivery services. Compl. at ¶14.

The complaint alleges that Plaintiff Henson purchased a home located in Bakersfield, CA; the date of closing was February 15, 2012. Compl. at ¶22. Chicago Title Company handled the escrow for Plaintiff Henson's purchase and loan transaction. Compl. at ¶23. Plaintiff Henson was charged an "Overnight Delivery Fee" of $13.71 by UPS. Compl. at ¶23. Plaintiff Henson paid the charge when escrow closed on February 15, 2012. Compl. at ¶23.

The complaint alleges that Plaintiff Turner refinanced his home located in Los Angeles, CA; the date of closing was September 11, 2012. Compl. at ¶24. Lawyers Title Company handled the escrow for Plaintiff Turner's refinancing. Compl. at ¶24. Plaintiff Turner was charged a total of $19.98 for "overnight delivery services" by both Federal Express and OnTrac. Compl. at ¶24. Plaintiff Turner paid the charges when escrow closed on September 11, 2012. Compl. at ¶24.

Plaintiffs allege violations of RESPA's prohibition against kickbacks and splitting unearned fees. Compl. at ¶¶13-21, 25; see also 12 U.S.C. §2607. The complaint alleges that Defendant was provided a portion of the delivery charges paid by Plaintiffs pursuant to a master agreement with the delivery company as a referral fee or kickback in violation of RESPA Section 8(a) or provided to Defendant as a fee for services not actually rendered by Defendant in violation of RESPA Section 8(b). Compl. at ¶¶14, 18-21, 40-41.

III. LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(3) allows a defendant to move for dismissal of the case on the basis of improper venue. See Fed. R. Civ. P. 12(b)(3); Abrams Shell v. Shell Oil Co., 165 F.Supp.2d 1096,1102 (C.D. Cal. 2001). The plaintiff bears the burden of showing that venue is proper in the chosen district. Koresko v. Realnetworks, Inc., 291 F.Supp.2d 1157, 1160 (E.D. Cal. 2003); American Homecare Fed'n v. Paragon Sci. Corp., 27 F.Supp.2d 109, 112 (D. Conn. 1998); see also Piedmont Label Co. v. Sun Garden Packing Co., 598 F.2d 491, 496 (9th Cir. 1979) (holding that plaintiff bears the burden to show proper venue in context of summary judgment).

When there are multiple parties and/or multiple claims in an action, the plaintiff must establish that venue is proper as to each defendant and as to each claim. Pacer Global Logistics, Inc. v. AMTRAK, 272 F.Supp.2d 784, 788 (E.D. Wis. 2003); Bearse v. Main St. Invs., 170 F.Supp.2d 107, 116 (D. Mass. 2001); Payne v. Marketing Showcase, Inc., 602 F.Supp. 656, 658 (N.D. Ill. 1985). Unlike a motion for dismissal under Rule 12(b)(6), the court may consider supplemental written materials and consider facts outside of the pleadings in deciding a Rule 12(b)(3) motion to dismiss without transforming the motion into a motion for summary judgment. See Agueta v. Banco Mexicano, S.A., 87 F.3d 320, 324 (9th Cir. 1996); Travelers Cas. And Sur. Co. of Am. v. Telstar Constr. Co., 252 F.Supp.2d 917, 922 (D. Ariz. 2003). Furthermore, the court need not accept the plaintiff's pleadings as true, but the court must draw all reasonable inferences and resolve all factual conflicts in favor of the non-moving party. See American Home Assurance Co. v. TGL Container Lines, Ltd., 347 F.Supp.2d 749, 755 (N.D. Cal. 2004).

If venue is improper, the district court has the discretion to dismiss the case under Rule12(b)(3) or transfer the case in the interests of justice to an appropriate jurisdiction under 28 U.S.C. Section 1406(a). See King v. Russell, 963 F.2d 1301, 1304 (9th Cir. 1992); Kawamoto v. CB Richard Ellis, Inc., 225 F.Supp.2d 1209, 1212 (D. Haw. 2002). However, even where venue is proper, the district court may still transfer the case to another jurisdiction where it may have been brought for the convenience of the parties and witnesses and in the interests of justice under 28 U.S.C. Section 1404(a). See Kawamoto, 225 F.Supp.2d at 1212.

IV. DISCUSSION

Defendant challenges Plaintiffs' choice of the Eastern District of California ("EDC") as a proper venue for this case. "Except as otherwise provided by law," the venue statute found at 28 U.S.C. Section 1391 governs venue for civil actions in federal district courts. 28 U.S.C. §1391(a). RESPA contains its own venue and statute of limitations provision, which states:

Any action pursuant to the provisions of section 2605, 2607, or 2608 of this title may be brought in the United States district court or in any other court of competent jurisdiction, for the district in which the property involved is located, or where the violation is alleged to have occurred, within 3 years in the case of a violation of section 2605 of this title and 1 year in the case of a violation of section 2607 or 2608 of this title from the date of the occurrence of the violation.

12 U.S.C. §2614. Venue for a RESPA claim is therefore proper in two possible districts: (1) The district where the property is located, and (2) The district where the RESPA violation allegedly occurred. Venue must be proper for all named plaintiffs in a class action. See Abrams Shell, 165 F.Supp.2d at 1107 n. 5. Proper venue for the RESPA claims cannot be determined solely by relying on the subject properties' location because Plaintiff Henson's property is located in Bakersfield—which is in the EDC—and Plaintiff Turner's property is located in Los Angeles—which is in the CDC. It is clear that venue is proper in this Court for Plaintiff Henson's claims because her property is located within this District and Division. The same cannot be said for Plaintiff Turner. The Court must determine where the alleged RESPA violation(s) occurred in order to determine whether this District and Division is a proper venue for Plaintiff Turner's claims.

Plaintiffs argue that this District is the proper venue for both Plaintiffs regardless of their respective properties' location because the RESPA violation on which their claims rely occurred in the EDC. Plaintiffs argue that the EDC "is the only district where jurisdiction and venue exists over both of the [P]laintiffs' claims." Pl. Opp. to MTCV, at p. 4 (italics added, underline in original). The complaint alleges violations of 12 U.S.C. Sections 2607(a) and (b). Compl. at ¶¶13-21, 25. Section 2607(a) provides that "[n]o person shall give and no person shall accept any fee, kickback, or thing of value pursuant to any agreement or understanding . . . that business incident to or a part of a real estate settlement service . . . shall be referred to any person." 12 U.S.C. §2607(a). Section 2607(b) provides that "[n]o person shall give and no person shall accept any portion, split, or percentage of any charge made or received for the rendering of a real estate settlement service . . . other than for services actually performed." 12 U.S.C. §2607(b). According to Plaintiffs, the RESPA violation that forms the basis of this complaint and establishes venue in this District is the referral to Defendant's subsidiaries that ultimately led to the unlawful payments made to Defendant. Pl. Opp. to MTCV, at p. 2, 4.

A. The Referral is Not a RESPA Violation

Defendant allegedly circulated a number of "Rate Compliance Memoranda" ("RC Memoranda") from its compliance...