Title Insurance Company Defeats Homeowners' Motion for Class Certification


[author: Katie Tinsley]

In Ahmad v. Old Republic National Title Insurance Company, --- F.3d ---, 2012 WL 3264560, *8 (5th Cir. Aug. 13, 2012), the Fifth Circuit Court of Appeals reversed a Texas federal court’s grant of class certification because none of Plaintiff’s proposed questions of common fact or law were common to the class and, therefore, could not predominate at trial. Plaintiffs sought class certification of a group of Texas homeowners claiming the Old Republic National Title Insurance Co. routinely denied the putative plaintiffs a title insurance premium discount required under Texas law. The Texas federal court granted class certification the same day that the Fifth Circuit issued a decision in Benavides v. Chicago Title Insurance, Co., 636 F.3d 699 (5th Cir. 2011), in which the Fifth Circuit denied class certification in a similar lawsuit over the same commonality issues.

The Ahmad Court affirmed its decision in Benavides. The Court recognized the challenge title insurance companies have in determining whether a particular borrower, seeking to refinance their home, was issued a title insurance policy within seven years of the date of the new policy. The insurance company's ad hoc policy involved looking at circumstantial evidence in each borrower’s file to determine whether there was a pre-existing policy.

The Ahmads argued that class certification was appropriate because a set of three “proxy indicators” sufficiently identified that a policy had been previously issued, thus entitling the borrower to the mandatory discount. However, the Court found that the question of common fact, “what evidence is sufficient to qualify a borrower for the [mandatory] credit?” did not invite a “yes” or “no” answer as required by Rule 23. Rather, a fact finder would necessarily engage in a file-by-file review in determining whether the mandatory credit applied. Because the issues were not capable of class-wide determination by class-wide proof, the common questions identified by the Ahmads were not common to the class and could not predominate at trial.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Carlton Fields | Attorney Advertising

Written by:


Carlton Fields on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.