Todd v. Fidelity National Financial, Inc. et al

Filing 146

ORDER ADOPTING 141 RECOMMENDATIONS OF UNITED STATES MAGISTRATE JUDGE: Defendants' 121 Motion to Dismiss Second Amended Complaint Pursuant to FED. R. CIV. P. 12(b)(1), 12(b)(6), and 9(b) is GRANTED as to the first, second, and third claims for relief alleged in the complaint, and those claims are DISMISSED. By Judge Robert E. Blackburn on 9/16/2014. (alowe)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Robert E. Blackburn
Civil Action No. 1:12-cv-666-REB-CBS
UNITED STATES OF AMERICA, ex rel. DALE TODD,
Plaintiffs,
v.
FIDELITY NATIONAL FINANCIAL, INC., et al.,
Defendants.

ORDER ADOPTING RECOMMENDATIONS OF
UNITED STATES MAGISTRATE JUDGE
Blackburn, J.
This matter is before me on the following: (1) the Defendants’ Motion to
Dismiss Second Amended Complaint Pursuant to FED. R. CIV. P. 12(b)(1),
12(b)(6), and 9(b) [#121]1 filed on October 11, 2013; and (2) the corresponding
Recommendation Regarding Defendants’ Motion To Dismiss [#141] filed August
19, 2014. Both the relator, Dale Todd, and the defendants filed objections [#144 &
#145] to the recommendation. I overrule the objections, approve and adopt the
recommendation, grant the motion to dismiss in part and deny it in part.
As required by 28 U.S.C. § 636(b), I have reviewed de novo all portions of the
recommendation to which the parties object. I have considered carefully the
recommendation, the objections, and the applicable law.
In the recommendation [#141], The magistrate judge provides a detailed
1

“[#121]” is an example of the convention I use to identify the docket number assigned to a
specific paper by the court’s case management and electronic case filing system (CM/ECF). I use this
convention throughout this order.

description of the allegations in the complaint and the issues presented in the motion to
dismiss. I summarize the background only briefly. The relator, Dale Todd, was
employed by one or more of the defendants. Defendants Service Link and First
American Title Insurance provided title insurance and other services to the Federal
Home Loan Mortgage Corporation (Freddie Mac) during the relevant time period. Mr.
Todd alleges that Service Link and First American omitted important and required
information from its title commitments and title insurance policies issued to Freddie Mac.
Mr. Todd contends the defendants submitted false or fraudulent claims for payments to
Freddie Mac for substandard title work performed by the defendants. In addition, Mr.
Todd says he raised these issues with his employer but, in the end, no remedial action
was taken. According to Mr. Todd, the defendants retaliated against him because of his
pursuit of his investigation of these issues by demoting him, reducing his pay, and,
ultimately, eliminating his salary.
In his complaint [#109], Mr. Todd asserts three claims alleging violation of the
False Claims Act, 31 U.S.C. §§ 3729 - 3732, based on the alleged submission of false
or fraudulent claims to the government. In addition, he asserts a claim of retaliation
under 31 U.S.C. § 3730(h). Addressing the motion to dismiss, the magistrate judge
concludes that the three claims of Mr. Todd alleging that the defendants submitted false
or fraudulent claims for payments to Freddie Mac for substandard title work must be
dismissed because Freddie Mac was not a government entity at the relevant times. As
noted by the magistrate judge, the precise status of Freddie Mac at the relevant times is
an unsettled question. Recommendation [#141], p. 20. In addition, the magistrate
judge concludes that the allegations in the complaint do not support a claim that the
defendants are liable for the alleged false claims because Freddie Mac was a grantee of

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government funds which funds were lost via payments by the government to the
defendants. On these bases, the magistrate judge recommends that the motion to
dismiss be granted as to the first, second, and third claims for relief.
However, addressing the retaliation claim of Mr. Todd, the fourth claim for relief,
the magistrate judge recommends that the motion to dismiss be denied. The applicable
statute provides:
Any employee, contractor, or agent shall be entitled to all relief necessary
to make that [person] whole, if that employee, contractor, or agent is
discharged, demoted, suspended, threatened, harassed, or in any other
manner discriminated against in the terms and conditions of employment
because of lawful acts done by the employee, contractor, agent or
associated others in furtherance of an action under this section or other
efforts to stop one or more violations of this subchapter.
31 U.S.C. § 3730(h). The defendants contend that Mr. Todd cannot assert a retaliation
claim because his investigation while employed by the defendants was not focused on a
False Claims Act claim. however, an investigation focused on the False Claims Act is
not required to support a retaliation claim under § 3730(h). U.S. ex rel. Yesudian v.
Howard Univ., 153 F.3d 731, 741 (D.C. Cir. 1998). Rather, the investigation need only
implicate illegal activities that would constitute fraud on the United States or warn the
employer of regulatory noncompliance and false reporting of information to a
government agency. McBride v. Peak Wellness Ctr., Inc., 688 F.3d 698, 704 (10th
Cir. 2012). The allegations in the complaint concerning the investigation of Mr. Todd
satisfy this requirement.
The fact that Mr. Todd has not alleged an arguable underlying claim under the
False Claims Act does not necessarily defeat his retaliation claim. “(T)the case law is
clear that a retaliation claim can be maintained even if no FCA action is ultimately
successful or even filed.” U.S. ex rel. Ramseyer v. Century Healthcare Corp., 90

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F.3d 1514, 1522 (10th Cir. 1996). I agree with the magistrate judge that the issues
surrounding the retaliation claim are best addressed in a motion for summary judgment.
THEREFORE, IT IS ORDERED as follows:
1. That the Recommendation Regarding Defendants’ Motion To Dismiss
[#141] filed August 19, 2014, is APPROVED and ADOPTED as an order of this court;
2. That the objections [#144 & #145] of the parties are OVERRULED;
3. That under FED. R. CIV. P. 12(b)(6), the Defendants’ Motion to Dismiss
Second Amended Complaint Pursuant to FED. R. CIV. P. 12(b)(1), 12(b)(6), and
9(b) [#121] filed on October 11, 2013, is GRANTED as to the first, second, and third
claims for relief alleged in the complaint [#109], and those claims are DISMISSED; and
4. That otherwise, the Defendants’ Motion to Dismiss Second Amended
Complaint Pursuant to FED. R. CIV. P. 12(b)(1), 12(b)(6), and 9(b) [#121] filed on
October 11, 2013, is DENIED.
Dated September 16, 2014, at Denver, Colorado.
BY THE COURT:

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