UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE I. INTRODUCTION

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1 Case :-cv-0-tsz Document Filed 0// Page of Honorable Thomas S. Zilly UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE TIFFANY SMITH, on behalf of herself and others similarly situated, v. Plaintiff, No. :-cv-0-tsz SECOND AMENDED CLASS ACTION COMPLAINT FIRST AMERICAN TITLE INSURANCE COMPANY, a foreign corporation Defendant. I. INTRODUCTION Plaintiff, Tiffany Smith, on behalf of herself and the class of all those similarly situated, as identified below, brings this action against defendant First American Title Insurance Company for breach of contract, breach of the duty of good faith and fair dealing, violations of Washington s Consumer Protection Act, breach of fiduciary duty, and unjust enrichment. II. JURISDICTION AND VENUE. Plaintiff Tiffany Smith is a resident of Selah, Washington.. Defendant First American Title Insurance Company ( First American Title ) provides title insurance, escrow/closing services, and related real estate services to SECOND AMENDED CLASS ACTION COMPLAINT - (No. :-cv-0 TSZ) Phone () -000 Fax () -0

2 Case :-cv-0-tsz Document Filed 0// Page of homeowners and real estate professionals within the State of Washington and, at all times relevant hereto, had and has continuous, systematic contacts within Washington.. Defendant does business in King County, Washington, and throughout the state.. Plaintiff filed this action in King County Superior Court and allege that court has jurisdiction over the parties and the subject matter of this lawsuit. Defendant timely removed this action to this Court under the Class Action Fairness Act, U.S.C. (d).. Venue is proper in this Court. III. FACTUAL ALLEGATIONS. Upon information and belief, defendant First American Title is a corporation with its principal offices located in Santa Ana, California.. Plaintiff and class members either obtained loans on property located in Washington that were secured by deeds of trust or paid off existing loans secured by deeds of trust on their property in Washington, as part of a real property sale and purchase or a refinance, and, as part of these real estate transactions, defendant acted as the escrow agent.. As part of its duties as the escrow agent for the aforementioned transactions, defendant prepared Settlement Statements, also known as HUD-s, which are required by law to list, inter alia, the expenses charged to plaintiff and class members arising out of the aforementioned real estate transactions.. On or about February, 0, plaintiff sold her home and paid off an existing loan to Homecomings Financial, LLC. In the Final Settlement Statement prepared by defendant for plaintiff ( Plaintiff s Settlement Statement ), defendant listed a $ charge for Northwest Post to Northwest Post Closing Center. Northwest Post Closing SECOND AMENDED CLASS ACTION COMPLAINT - (No. :-cv-0 TSZ) Phone () -000 Fax () -0

3 Case :-cv-0-tsz Document Filed 0// Page of Center is not a third party but a division of defendant which, therefore, paid itself, but did not disclose this information to plaintiff. This charge is referred to as the reconveyance fee for the remainder of this complaint.. In Plaintiff s Settlement Statement, defendant also listed charges of $0.00 for Document Fee. According to statements later provided to plaintiff s counsel by defendant, this fee was charged to prepare the Statutory Warranty Deed that was used to convey title to the purchaser.. With respect to the $.00 in fees charged by defendant for the reconveyance fee, Homecomings Financial prepared and recorded on March, 0, all reconveyance documents that were required as part of the real estate transaction. Defendant neither prepared nor recorded the documents nor was it required to do so.. Plaintiff signed Escrow Instructions to defendant which constituted a binding contract between plaintiff and defendant. Those instructions provided, among other things, the following: If there are underlying encumbrances being paid off which require the obtaining of a Fulfillment Deed, Reconveyance, Release or Satisfaction, you [i.e., the defendant] are instructed to pay the demand of the appropriate party and obtain and record such a document.. Plaintiff agreed to pay and did pay defendant a Settlement or Closing Fee in consideration of defendant s performance of all duties specified in the Escrow Instructions. Assuring the recordation of all reconveyance documents is one of the duties specified in the Escrow Instructions, as set forth above. Therefore, defendant breached its contract with plaintiff by collecting from plaintiff an additional fee, above and beyond the Settlement or Closing Fee, for any reconveyance-related services. SECOND AMENDED CLASS ACTION COMPLAINT - (No. :-cv-0 TSZ) Phone () -000 Fax () -0

4 Case :-cv-0-tsz Document Filed 0// Page of. The reconveyance fee charged by defendant was unreasonable, unnecessary, excessive and impermissible.. With respect to the Document Fee, the Escrow Instructions acknowledge that the Seller herein deposit with defendant the Warranty Deed and Excise Tax Affidavit, which defendant is instructed to record, file, release, and/or deliver when you [i.e., the defendant] have all necessary funds and/or other documents as follows Thus, handling of the Statutory Warranty Deed is a duty specified in the Escrow Instructions and therefore should not have been subject to an additional charge beyond the Settlement or Closing Fee.. In addition, there is no record in plaintiff s escrow file of the true cost of any service allegedly covered by the Document Fee. Upon information and belief, defendant did not perform any services to support the Document Fee, or overcharged or imposed an unreasonable charge for any such service.. Upon information and belief, other members of the putative class were similarly charged or overcharged for reconveyance fees and/or other reconveyance related fees and for Document Fees. IV. CLASS ALLEGATIONS. Plaintiff seeks to represent a class consisting of all persons who, within the applicable statute of limitations, had an escrow transaction with defendant in connection with a real estate transaction in Washington State and who were charged fees by defendant for either (a) reconveyance related services or (b) a Document Fee.. Plaintiff brings this action on behalf of herself and all other persons similarly situated pursuant to Superior Court Civil Rule (b)() or, alternatively, Civil Rule (b)(). The class that plaintiff seeks to represent is composed of potentially thousands of individuals. SECOND AMENDED CLASS ACTION COMPLAINT - (No. :-cv-0 TSZ) Phone () -000 Fax () -0

5 Case :-cv-0-tsz Document Filed 0// Page of. Joinder of all members of the class as defined herein is impractical.. There are common issues of law and fact affecting the class with respect to the application of the law pertaining to plaintiff s claims of breach of contract, breach of the duty of good faith and fair dealing, violation of the Washington Consumer Protection Act, breach of fiduciary duty, unjust enrichment, and violation of applicable regulations, and the determination of damages therefrom, because of defendant s conduct.. Plaintiff s claims are typical of the claims of the class since plaintiff and all class members sustained damages arising from defendant s wrongful conduct in violation of law as stated in this Complaint.. Plaintiff will fairly and adequately protect the interests of the class. Plaintiff does not have interests that are antagonistic to or in conflict with those of the members of the class that plaintiff seeks to represent.. The interests of the class are adequately represented by plaintiff and her counsel. Plaintiff has retained counsel competent and experienced in class and consumer litigation.. This action seeks to enjoin the practices at issue and provide for restitution of fees illegally collected.. This action is also maintainable as a class action because the questions of law and fact common to the members of the class predominate over any questions affecting only individual members and because a class action is superior to other available methods for the fair and efficient adjudication of the controversy. Specifically, all four of the criteria set forth in Civil Rule (b)() have been satisfied in this case. First, the members of the class have little, if any, interest in individually controlling the prosecution of separate actions. SECOND AMENDED CLASS ACTION COMPLAINT - (No. :-cv-0 TSZ) Phone () -000 Fax () -0

6 Case :-cv-0-tsz Document Filed 0// Page of Second, plaintiff s counsel is not aware of any other litigation concerning the controversy already commenced by members of the class. Third, it is desirable to concentrate the litigation of these claims in this forum given their relationship to the State of Washington. Fourth, few difficulties likely will be encountered in the management of the class action. V. FIRST CAUSE OF ACTION: BREACH OF CONTRACT. Plaintiff restates and realleges paragraphs through above.. Plaintiff s and class members Escrow Instructions with defendant constitute contracts, which define the rights of the parties including what charges, if any, defendant may assess in connection with its services. These instructions did not permit defendant to charge the additional reconveyance or Document Fees described herein or to impose the excessive fees identified herein.. Defendant breached its contractual duties to plaintiff and class members by collecting additional fees for services that were not performed, that were part of its specified duties under the Escrow Instructions, or that were in excess of the true or reasonable costs incurred in performing such services. 0. As a proximate result of the breaches of Escrow Instructions by defendant, plaintiff and class members have been wronged in that plaintiff and the class paid the excessive fees set forth herein. Plaintiff and the class are entitled to restitution of excessive fees collected. VI. SECOND CAUSE OF ACTION: BREACH OF DUTY OF GOOD FAITH AND FAIR DEALING. Plaintiff restates and realleges the allegations contained in paragraphs through 0 above. SECOND AMENDED CLASS ACTION COMPLAINT - (No. :-cv-0 TSZ) Phone () -000 Fax () -0

7 Case :-cv-0-tsz Document Filed 0// Page of. By virtue of the foregoing, defendant breached its duty of good faith and fair dealing in connection with its interpretation and implementation of the terms of its Escrow Instructions and/or contracts between plaintiff and class members and defendant. In particular, Defendant s contract with plaintiff provided, If there are underlying encumbrances being paid off which require the obtaining of a Fulfillment Deed, Reconveyance, Release or Satisfaction, you [i.e., the Defendant] are instructed to pay the demand of the appropriate party and obtain and record such a document. Defendant breached its duty of good faith and fair dealing in connection with its interpretation and implementation of this term of the contract by charging an extra fee, beyond its Settlement or Closing Fee, to perform the reconveyance services it agreed to perform as part of its contract with plaintiff. Defendant s contract also provided, with respect to the Warranty Deed, that Defendant is instructed to record, file, release, and/or deliver [the Deed] when you [i.e., the Defendant] have all necessary funds and/or other documents as follows. Defendant again breached its duty of good faith and fair dealing in connection with its interpretation and implementation of this term of the contract by assessing an additional charge to plaintiff beyond the Settlement or Closing Fee for its handling of the Warranty Deed.. As a proximate result of the breaches of defendant s duty of good faith and fair dealing, plaintiff and class members have been wronged in that plaintiff and the class paid the excessive fees set forth herein. Plaintiff and the class are entitled to restitution of excessive fees collected. VII. THIRD CAUSE OF ACTION: VIOLATION OF THE CONSUMER PROTECTION ACT, RCW.. Plaintiff restates and realleges the allegations contained in paragraphs through above. SECOND AMENDED CLASS ACTION COMPLAINT - (No. :-cv-0 TSZ) Phone () -000 Fax () -0

8 Case :-cv-0-tsz Document Filed 0// Page of. Defendant s practice of requiring plaintiff and the class members to pay for reconveyance related fees or excessive Document Fees constitutes an unfair and deceptive act and practice, which is unlawful and in violation of the Washington Consumer Protection Act, RCW.. In addition, this practice violates WAC -0D-00(), as amended and recodified at WAC -0-0().. By including such excessive and/or unnecessary fees on the Settlement Statement, and by representing or implying that such fees were necessary to complete the real estate transactions involved, defendant s practices had the capacity to deceive reasonable consumers into believing that they must pay these excessive fees before the consumers real estate transactions could or would be completed. These practices are unfair and deceptive under the Consumer Protection Act. Further, defendant unfairly and deceptively claimed that the reconveyance fees were charged to Northwest Post Closing Center without advising plaintiff and the class that it was, in fact, paying itself.. Pursuant to RCW..00, plaintiff and the class seek an injunction against defendant to enjoin further violations of the practices alleged herein together with equitable restitution, incidental damages, costs of suit and reasonable attorney s fees. Plaintiff and the class also seek an award of exemplary damages in the amount of three times the amount of restitution paid. VIII. FOURTH CAUSE OF ACTION: VIOLATION OF FIDUCIARY DUTY. Plaintiff restates and realleges the allegations contained in paragraphs through above.. Defendant owed a fiduciary duty to plaintiff and class members to act with scrupulous honesty, skill and diligence as their escrow agent SECOND AMENDED CLASS ACTION COMPLAINT - (No. :-cv-0 TSZ) Phone () -000 Fax () -0

9 Case :-cv-0-tsz Document Filed 0// Page of 0. By virtue of the foregoing, defendant has breached this fiduciary duty to plaintiff and class members.. As a proximate result of the breaches of defendant s fiduciary duty, plaintiff and class members have been wronged in that plaintiff and the class paid the excessive fees set forth herein. Plaintiff and the class are entitled to be made whole by the restitution of excessive fees collected. IX. RELIEF SOUGHT. WHEREFORE, plaintiff requests relief as follows: A. That the Court certify the identified class pursuant to Civil Rule (b)() or (b)() with plaintiff as the class representative and the undersigned as class counsel; B. That the Court enter an injunction permanently forbidding defendant from committing the practices alleged herein in the future or declare the same unlawful; C. That the Court also enter a judgment in favor of plaintiff and the class against defendant for incidental recovery of damages, directing reimbursement of fees illegally collected, and awarding exemplary damages pursuant to RCW..00; D. That the Court award plaintiff and the class their costs, including reasonable attorneys fees pursuant to RCW..00 and applicable contracts; E. For pre-judgment interest at the highest allowable rate on all liquidated sums, and post-judgment interest on the entire judgment amount awarded at the highest allowable rate; and F. That the Court award such other and further relief that the Court deems just and equitable. SECOND AMENDED CLASS ACTION COMPLAINT - (No. :-cv-0 TSZ) Phone () -000 Fax () -0

10 Case :-cv-0-tsz Document Filed 0// Page of DATED this th day of June,. /s/ Adam J. Berger Martin S. Garfinkel, WSBA # Adam J. Berger, WSBA # BERRY & BECKETT, PLLP Guy W. Beckett, WSBA # 0 Bellevue Avenue Seattle, WA () - phone () - fax WILLIAMSON & WILLIAMS Rob Williamson, WSBA # Agate Street NE Bainbridge Island, WA 0 () 0- phone () 0- fax Attorneys for Plaintiff SECOND AMENDED CLASS ACTION COMPLAINT - (No. :-cv-0 TSZ) Phone () -000 Fax () -0

11 Case :-cv-0-tsz Document Filed 0// Page of CERTIFICATE OF SERVICE I hereby certify that on June,, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following: Stephen M. Rummage, WSBA # Kenneth E. Payson, WSBA # Davis Wright Tremaine LLP Third Ave, Ste 0 Seattle, WA -0 Charles A. Newman Jason E. Maschmann SNR DENTON LLP One Metropolitan Square North Broadway, Ste 000 St. Louis, Missouri -0 Dated at Seattle, Washington this th day of June,. /s/ Adam J. Berger Martin S. Garfinkel, WSBA # Adam J. Berger, WSBA # Third Avenue, Suite 00 Seattle, WA Phone: () -000 Fax: () -0 berger@sgb-law.com SECOND AMENDED CLASS ACTION COMPLAINT - (No. :-cv-0 TSZ) Phone () -000 Fax () -0