Bezek et al v. First Mariner Bank
Filing
115
MEMORANDUM OPINION. Signed by Judge Stephanie A. Gallagher on 1/20/2023. (ols, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
JILL BEZEK, et al.,
Plaintiffs,
v.
FIRST NATIONAL BANK OF
PENNSYLVANIA,
Defendant.
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Civil No. SAG-17-2902
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MEMORANDUM OPINION
Jill Bezek and Michelle Harris (collectively “Plaintiffs”) represent a class of borrowers
who had a federally related loan serviced by First Mariner Bank (“First Mariner”). Plaintiffs assert
that First Mariner and its employees violated the Real Estate Settlement Procedures Act
(“RESPA”), 12 U.S.C. §§ 2601-2617, by referring loans to a title services provider, Genuine Title,
in exchange for kickbacks. Defendant First National Bank of Pennsylvania (“Defendant”), the
successor in interest to First Mariner by and through its merger with Howard Bank, has filed a
motion asking this Court to grant summary judgment in its favor on all claims and to decertify the
class previously certified on October 2, 2020. ECF 94. Plaintiffs oppose the motion and seek partial
summary judgment establishing Defendant’s successor liability and identifying the class
membership. ECF 97. The parties have also filed motions to seal certain exhibits pursuant to
existing confidentiality orders. ECF 98, 113. Finally, Plaintiffs have filed a motion for leave to file
a surreply, ECF 109, which Defendant has opposed, ECF 112.
This Court has reviewed the parties’ motions, oppositions, replies, and the exhibits attached
thereto. See ECF 99, 101, 102, 106, 114. No hearing is necessary. See Loc. R. 105.6 (D. Md. 2021).
For the reasons below, Defendant’s Motion for Summary Judgment and Decertification will be
granted in part and denied in part. Specifically, while Defendant is entitled to partial summary
judgment with respect to certain class member claims and the appropriate measure of RESPA
damages, the remainder of the motion will be denied. Plaintiffs’ cross motion for summary
judgment will also be granted in part and denied in part. Finally, Plaintiffs’ surreply motion and
the parties’ motions to seal will be granted.
I.
FACTUAL BACKGROUND
At the time of the relevant events, First Mariner was a Maryland corporation and
independently owned bank. ECF 1 ¶ 7; ECF 28 ¶ 7. Genuine Title was a title services company
operating in Maryland. ECF 99-9 ¶¶ 2, 3. Plaintiffs Bezek and Harris are Maryland residents who
refinanced their mortgages with First Mariner. ECF 101-18 at 3; ECF 101-19 at 3. Plaintiffs allege
that, from 2009 through 2014, First Mariner brokers referred 276 loans (including their own) to
Genuine Title for title settlement services as part of an illegal kickback scheme. See ECF 97-1 at
17; ECF 101-1 through ECF 101-9. As explained by Genuine Title’s former president, Jay
Zukerberg, and another Genuine Title employee, Brandon Glickstein, part of Genuine Title’s
regular business model included the payment of cash kickbacks, marketing credits, and other
things of value to lenders in exchange for their referring loans to Genuine Title. ECF 99-13 at
26:13-27:4. 184:7-12; ECF 99-14 at 12:5-11, 15:21-17:13, 29:4-29:11.
Plaintiffs’ refinance loans with First Mariner were both originated by Anthony Sergi, a
loan officer at First Mariner’s Ellicott City and White Marsh branches. ECF 101-18 at 3; ECF 10119 at 3, ECF 99-21 ¶ 3. In a sworn declaration, Sergi stated that in late 2009 or early 2010, he
started receiving payments from Genuine Title in exchange for loan referrals. ECF 99-21 ¶ 14.
While First Mariner borrowers had the right to choose their own title company, Sergi would elect
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the title company when his borrowers declined this choice. Id. ¶¶ 5, 7. Sergi received a payment
of approximately $200 from Genuine Title for each loan he referred to the company. ECF 99-20 ¶
14; ECF 99-21 ¶ 13. 1 This amount was paid directly to Sergi, either by Glickstein or through
companies owned by Glickstein, in the form of personal checks made out to Sergi. ECF 99-20 ¶
12; ECF 99-21 ¶ 13; ECF 99-24 ¶ 8(a). Glickstein stated in a declaration that Genuine Title’s
referral agreement with Sergi was in place “the entire time that Sergei [sic] was employed with
First Mariner” and that “every loan Sergei [sic] assigned and referred to Genuine Title would have
resulted in a kickback,” ECF 99-24 ¶ 8(a); however, Sergi’s later declaration refutes both these
points, ECF 99-21 ¶¶ 10, 13. Sergi said in that same declaration that he did not disclose the
kickback payments to his superiors at First Mariner. ECF 99-21 ¶ 14. He also stated, however, that
he believed his branch manager at First Mariner’s White Marsh branch knew about and may have
received similar kickbacks from Genuine Title. Id. ¶ 15, ECF 99-20 ¶ 13.
Plaintiffs’ loans were referred to Genuine Title by Sergi, after they both declined to choose
their own title companies. ECF 94-2 at 111:7-112:11; ECF 94-4 at 65:4-66:6. Bezek’s refinance
loan closed in December, 2010. ECF 94-3 at 2. Genuine Title charged her $1,675 for title services.
Id. at 3. That total included (among other charges) $910 in title exam and abstract fees, as well as
$480 for title insurance. Id. Harris’s loan closed in October, 2012. ECF 94-5 at 2. Genuine Title
1
The parties have submitted numerous declarations from former employees of First Mariner and
Genuine Title, some of which contain contradictory or inconsistent statements. For example, in his
July 19, 2021 declaration obtained by Plaintiffs, Sergi states that he was paid $200 for each referral,
whereas his August 20, 2021 declaration obtained by Defendant states that he did not receive a
payment for every loan referred to Genuine Title. ECF 99-20 ¶ 14; ECF 99-21 ¶ 13. Of course, in
considering these and other discrepancies, the Court remains mindful that summary judgment may
not be granted when conflicting statements in affidavits raise a genuine issue of material fact. Am.
Metal Forming Corp. v. Pittman, 52 F.3d 504, 507 (4th Cir. 1995).
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charged her $1,802.12 for title services. Id. at 3. That total included $1,200 in title exam and
abstract fees, as well as $267.12 for title insurance. Id.
Plaintiffs also introduced evidence indicating that other First Mariner employees, in
addition to Sergi, accepted cash kickbacks or other items of value from Genuine Title in exchange
for referring loans:
•
Bradley Restivo, a former loan officer at First Mariner’s Bel Air and Loch Raven
branches, stated in declarations that in October, 2012, he began referring loans to
Genuine Title in exchange for marketing credits of around $100-200 per loan from
Glickstein or one of his companies. ECF 94-8 ¶¶ 3, 11; 94-9 ¶¶ 1-3, 10. Glickstein
also stated that Restivo received marketing credits in exchange for loan referrals.
ECF 99-24 ¶ 8(b).
•
Walter Alton, who was employed in 2010 as a loan officer at First Mariner’s Canton
branch, stated in declarations that he received a payment of around $100 from
Glickstein or his companies for each loan he referred to Genuine Title. ECF 99-16
¶¶ 1, 10, 11, 13. Glickstein also stated that Alton received cash payments in
exchange for loan referrals. ECF 99-24 ¶ 8(d).
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Glickstein stated in declarations that Genuine Title had similar referral agreements
to provide cash or marketing credits to First Mariner loan officers Robert Iobbi,
Joseph Buchannan, Tom Bowen, and Jon Cohen. ECF 94-18 ¶ 8; ECF 99-24 ¶
8(c). 2
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In his declaration dated April 28, 2022, Glickstein also identified 15 loans that were
referred by First Mariner to Genuine Title through an intermediary named Brian
Boateng. ECF 94-18 ¶ 9, ex. A. Loan documents indicate that the First Mariner
employees associated with these loans were employed in the bank’s Eldersburg
branch. ECF 101-13. Glickstein averred that “[b]ased on my personal experience
working with Brian Boateng, it is more likely so than not so that the referral of these
loans . . . were [sic] pursuant to” an illegal kickback arrangement. Id. ¶ 9.
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Zukerberg averred that Genuine Title had a cash kickback arrangement in 2012 and
2013 with another First Mariner employee, Angela Pobletts, and that all loans
referred to Genuine Title by Pobletts were labeled “1st Mariner – Theresa
Frederick’s Branch.” ECF 94-16 ¶¶ 4-8. Theresa Frederick was the name of
Pobletts’s loan processor. Id. ¶ 7. Zukerberg also stated that Pobletts was paid on a
monthly basis according to a formula based on the total charges to borrowers on
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Defendant has submitted a declaration from Iobbi in which he denied receiving any kickbacks
from Genuine Title. ECF 94-12 ¶¶ 6-8.
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the loans Pobletts assigned and referred. Id. ¶¶ 4, 5. 3 At deposition, Pobletts
invoked her “constitutional privilege against self-incrimination” and declined to
answer questions. ECF 99-23 at 30:3-31:8.
In a Memorandum Opinion and Order issued on October 2, 2020, this Court granted
Plaintiffs’ Motion to Certify Class pursuant to Rule 23 of the Federal Rules of Civil Procedure.
ECF 47, 48. Specifically, Plaintiffs received certification of the following class of individuals (the
“First Mariner Class”) who allegedly suffered harm under RESPA as a result of the alleged
kickback scheme between First Mariner and Genuine Title:
All individuals in the United States who were borrowers on a federally related
mortgage loan (as defined under the Real Estate Settlement Procedures Act, 12
U.S.C. § 2602) originated or brokered by First Mariner Bank for which Genuine
Title provided a settlement service, as identified in Section 1100 on the HUD-1,
between January 1, 2009 and December 31, 2014. Exempted from this class is any
person who, during the period of January 1, 2009 through December 31, 2014, was
an employee, officer, member and/or agent of First Mariner Bank, Genuine Title
LLC and/or Competitive Advantage Media Group LLC.
ECF 48, see also ECF 47 at 7-17. This Court also rejected Defendant’s argument that Plaintiffs
lacked Article III standing, concluding that Plaintiffs had alleged sufficient facts indicating that
they suffered an actual injury-in-fact—namely, that they were overcharged for title services as a
result of the kickback scheme. ECF 47 at 5-7. However, the Court noted that “as more factual
development occurs, it may become clear that Plaintiffs were not overcharged for title and
settlement services,” and therefore “[Defendant] may continue to challenge Plaintiffs’ Article III
standing as this litigation proceeds, particularly at the summary judgment stage.” Id. at 7.
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Specifically, Zukerberg stated that the formula was calculated by taking the total charges to the
borrowers on loans referred, subtracting $500-600 for costs and overhead, and then dividing by
2. ECF 94-16 ¶ 4.
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II.
LEGAL STANDARD
Under Federal Rule of Civil Procedure 56(a), summary judgment is appropriate only “if
the movant shows that there is no genuine dispute as to any material fact and the movant is entitled
to judgment as a matter of law.” The moving party bears the burden of showing that there is no
genuine dispute of material fact. See Casey v. Geek Squad Subsidiary Best Buy Stores, L.P., 823
F. Supp. 2d 334, 348 (D. Md. 2011) (citing Pulliam Inv. Co. v. Cameo Props., 810 F.2d 1282,
1286 (4th Cir. 1987)). If the moving party establishes that there is no evidence to support the nonmoving party’s case, the burden then shifts to the non-moving party to proffer specific facts to
show a genuine issue exists for trial. Id. The non-moving party must provide enough admissible
evidence to “carry the burden of proof in [its] claim at trial.” Mitchell v. Data Gen. Corp., 12 F.3d
1310, 1316 (4th Cir. 1993)). The mere existence of a scintilla of evidence in support of the nonmoving party’s position will be insufficient; there must be evidence on which the jury could
reasonably find in its favor. Casey, 823 F. Supp. 2d at 348 (citing Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 251 (1986)). Moreover, a genuine issue of material fact cannot rest on “mere
speculation, or building one inference upon another.” Id. at 349 (quoting Miskin v. Baxter
Healthcare Corp., 107 F. Supp. 2d 669, 671 (D. Md. 1999)).
Summary judgment shall also be warranted if the non-moving party fails to provide
evidence that establishes an essential element of the case. Id. at 352. The non-moving party “must
produce competent evidence on each element of [its] claim.” Id. at 348-49 (quoting Miskin, 107 F.
Supp. 2d at 671). If the non-moving party fails to do so, “there can be no genuine issue as to any
material fact,” because the failure to prove an essential element of the case “necessarily renders all
other facts immaterial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Coleman v. United
States, 369 F. App’x 459, 461 (4th Cir. 2010) (unpublished). In ruling on a motion for summary
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judgment, a court must view all the facts, including reasonable inferences to be drawn from them,
“in the light most favorable to the party opposing the motion.” Matsushita Elec. Indus. Co., Ltd.
v. Zenith Radio Corp., 475 U.S. 574, 587-88 (1986) (quoting United States v. Diebold, Inc., 369
U.S. 654, 655 (1962)).
In addition to the parties’ cross-summary judgment motions, Defendant seeks to decertify
the First Mariner Class. ECF 94. “An order that grants or denies class certification may be altered
or amended before final Judgment.” Fed. R. Civ. P. 23(c)(1)(C). “Indeed, ‘an order certifying a
class must be reversed if it becomes apparent, at any time during the pendency of the proceeding,
that class treatment of the action is inappropriate.” Minter v. Wells Fargo Bank, N.A., No. CIV.A.
WMN-07-3442, 2013 WL 1795564, *2 (D. Md. Apr. 26, 2013) (quoting Stott v. Haworth, 916
F.2d 134, 139 (4th Cir.1990)). However, “commentators have cautioned that courts should be wary
of motions to decertify which simply reargue certification ‘in the absence of materially changed
or clarified circumstances.’” Id. (quoting 3 Newberg on Class Actions § 7:47 (4th ed. 2012)
(alteration adopted)).
“[A] motion to decertify is reviewed against the same standards as a motion to certify (i.e.,
the requirements of [Federal Rule of Civil Procedure 23]).” Id. (citing Chisolm v. TranSouth Fin.
Corp., 194 F.R.D. 538, 544 (E.D. Va. 2000)). Specifically, Rule 23(a) requires that (1) the alleged
class is so numerous that joinder of all members is impracticable, (2) there are questions of law or
fact common to the class, (3) the representatives’ claims are typical of the claims of the class, and
(4) the representatives will fairly and adequately protect the interests of the class. After satisfying
the Rule 23(a) prerequisites, the plaintiffs must show that the proposed class action falls within
one of the categories enumerated in Rule 23(b). E.g., Gunnells v. Healthplan Servs., Inc., 348 F.3d
417, 423 (4th Cir. 2003). Here, Plaintiffs sought and were granted class certification pursuant to
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Rule 23(b)(3). Under that rule, a class may be certified if “the court finds that the questions of law
or fact common to class members predominate over any questions affecting only individual
members, and that a class action is superior to other available methods for fairly and efficiently
adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3).
III.
ANALYSIS
A. Proposed Surreply
As a preliminary matter, this Court will begin by analyzing Plaintiffs’ motion for leave to
file a surreply, ECF 109. Generally, surreplies are not permitted unless ordered by the Court. Local
Rule 105.2(a) (D. Md. 2021); Trimgen Corp. v. Iverson Genetic Diagnostics, Inc., No. CIV.A.
RDB-14-2850, 2015 WL 2165118, at *2 (D. Md. May 7, 2015). “A party moving for leave to file
a surreply must show a need for a surreply.” MTB Servs., Inc. v. Tuckman-Barbee Const. Co., No.
1:12-cv-02109–RDB, 2013 WL 1224484, *6 (D. Md. Mar. 26, 2013). Such a need exists if “a
defendant raises new legal issues or new theories in its reply brief.” Id. Surreplies may also be
allowed “when the moving party would be unable to contest matters presented to the court for the
first time in the opposing party’s reply.” Id. (quoting Khoury v. Meserve, 268 F. Supp. 2d 600, 605
(D. Md. 2003)).
Plaintiffs contend that a surreply is necessary to address three arguments raised for the first
time in Defendant’s reply in support of its motion for summary judgment and decertification: (1)
that Plaintiffs abandoned or waived their claim that Bezek and Harris have standing; (2) that an
exhibit submitted by Plaintiffs purporting to show the 80th percentile cost of title services in various
states is inadmissible; and (3) that Sergi, the First Mariner employee who originated Plaintiffs’
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loans, was employed in a different capacity and at a different First Mariner branch than one
identified by Defendant during the relevant time period. 4
This Court agrees with Plaintiffs that a surreply is necessary to properly address these new
theories and assertions presented in Defendant’s reply brief. In particular, the first and second
issues are central to the parties’ dispute over whether Plaintiffs have introduced sufficient evidence
to establish Article III standing. See Trimgen Corp., 2015 WL 2165118, at *2 (granting a motion
for leave to file a surreply where the Defendant’s newly raised assertions were a “key
consideration” in the court’s jurisdictional analysis). Accordingly, Plaintiffs’ motion for leave to
file a surreply, ECF 109, will be granted. 5
B. Motions for Summary Judgment
1. Named Plaintiffs’ Claims
Defendant seeks summary judgment on Plaintiffs’ individual claims on two grounds. First,
it argues that First Mariner cannot be held vicariously liable for the kickbacks accepted by the
Plaintiffs’ loan officer, Sergi. Second, Defendant asserts that Plaintiffs lack standing because they
have not introduced admissible evidence showing that they suffered an injury-in-fact as a result of
the kickbacks.
i. Vicarious Liability
To prove their RESPA claims pursuant to 12 U.S.C. § 2607(a), Plaintiffs must show “(1)
a payment of a thing of value, (2) given and received pursuant to an agreement to refer settlement
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Though not addressed in the remainder of this opinion, this Court agrees with Plaintiffs that the
evidence indicates that Sergi worked at First Mariner’s White Marsh branch—not its Bel Air
branch—and was briefly a sales manager in 2014. ECF 99-20 ¶ 3; ECF 99-21 ¶ 2,3.
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In addition to Plaintiff’s surreply, ECF 109-1, this Court has also considered the arguments set
forth in Defendant’s opposition and supplemental response to the surreply, ECF 112, and
Plaintiff’s reply in support of its motion for leave to file a surreply, ECF 114.
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business, and (3) an actual referral.” Fangman v. Genuine Title, LLC, No. RDB-14-0081, 2016
WL 6600509, at *12 (D. Md. Nov. 8, 2016) (citing Galiano v. Fidelity Nat’l Title Ins. Co., 684
F.3d 309, 314 (2d Cir. 2012)). 6 Defendant argues that Plaintiffs cannot show that First Mariner—
as opposed to Sergi, acting on his own and without his superiors’ knowledge—accepted any
kickback or was party to any referral agreement with Genuine Title in connection with Plaintiffs’
loans. Plaintiffs respond that even if First Mariner did not sanction the kickbacks or directly benefit
from them, it is nonetheless vicariously liable for Sergi’s actions.
The Supreme Court has looked to the general common law of agency to determine whether
an employer may be vicariously liable for its employees’ violations of federal law. See Meyer v.
Holley, 537 U.S. 280, 285-86 (2003). “To determine these common law principles, courts have
traditionally looked to the Restatement of Agency.” Hodgin v. UTC Fire & Sec. Americas Corp.,
Inc., 885 F.3d 243, 252 (4th Cir. 2018); see also Christiana Trust v. Riddle, 911 F.3d 799, 803 (5th
Cir. 2018) (applying Restatement (Third) of Agency to a RESPA vicarious liability claim). Under
the Third Restatement, “[a]n employer is subject to vicarious liability for a tort committed by its
employee acting within the scope of employment.” Restatement (Third) of Agency § 7.07(1)
(2006). An employee acts within the scope of employment when “performing work assigned by
the employer or engaging in a course of conduct subject to the employer’s control.” Id. at §7.07(2).
The scope of employment “has been defined to include all those acts falling within the employee’s
or agent’s general line of work, when they are motivated—at least in part—by an intent to benefit
the corporate employer.” United States v. Singh, 518 F.3d 236, 249 (4th Cir. 2008)); see also
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In full, 12 U.S.C. § 2607(a) provides that: “No person shall give and no person shall accept any
fee, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise,
that business incident to or a part of a real estate settlement service involving a federally related
mortgage loan shall be referred to any person.”
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Bowen v. Adidas Am., Inc., No. 3:18-3118-JFA, 2020 WL 13076108, at *9 (D.S.C. Feb. 27, 2020);
United States v. Automated Med. Labs., 770 F.2d 399, 406-07 (4th Cir.1985) (stating that scope of
employment “has been broadly defined to include acts on the corporation’s behalf in performance
of the agent’s general line of work”). Conversely, “an act of a servant is not within the scope of
employment if it is ‘within an independent course of conduct not intended by the employee to
serve any purpose of the employer.’” United States v. Hilton, 701 F.3d 959, 970 (4th Cir. 2012)
(quoting Restatement, supra, § 7.07(2)).
Defendant argues that the kickbacks Sergi received from Genuine Title were part of an
independent course of conduct undertaken solely for his personal benefit. Specifically, Defendant
notes that the kickbacks were paid to Sergi in the form of personal checks made out to him, and
that Sergi stated in one of his declarations that he never disclosed the agreement to First Mariner.
ECF 94-7 ¶ 14. Defendant further contends that First Mariner did not in any way benefit from the
arrangement between Sergi and Genuine Title, because Plaintiffs’ mortgage loans were already
approved and would have closed regardless of which title company was ultimately used. ECF 102
at 10. Finally, Defendant argues that company policy expressly required Sergi to comply with
RESPA, see ECF 94-6, Ex. 1 at 3, Ex. 2 at 3, meaning his actions could not logically be within the
scope of his duties.
Defendant’s arguments are insufficient to establish, as a matter of law, that Sergi’s
kickback-referral arrangement was outside the scope of his employment. See Ashland Facility
Operations, LLC v. N.L.R.B., 701 F.3d 983, 990 (4th Cir. 2012) (“Generally, whether an agency
relationship exists is a factual determination.”); Richardson v. All. Residential Co., No. CV ELH18-1114, 2020 WL 2061512, at *8 (D. Md. Apr. 29, 2020) (“[T]he existence of an agent-principal
relationship and the scope of an agent’s authority are factual questions and so are ordinarily within
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the purview of the factfinder.”). As an initial matter, an employee’s actions may be within the
scope of employment “even if . . . such acts were against corporate policy or express instructions.”
United States v. Basic Constr. Co., 711 F.2d 570, 573 (4th Cir. 1983); see also Richardson, 2020
WL 2061512, at *8 (“Notably, the Restatement teaches that ‘conduct is not outside the scope of
employment merely because an employee disregards the employer’s instructions.’” (quoting
Restatement, supra, § 7.07 cmt. c.)). Therefore, the fact that First Mariner required Sergi to comply
with RESPA is not determinative of whether his conduct was outside the scope of his employment.
Rather, the appropriate inquiry is whether Sergi’s conduct (1) fell within his general line of work
and (2) was undertaken at least in part for First Mariner’s benefit. See Singh, 518 F.3d at 249;
Bowen, 2020 WL 13076108, at *9; Restatement, supra, § 7.07(2).
To the first point, Plaintiffs have pointed to evidence indicating that Sergi’s illegal referrals
occurred within, or were incidental to, his general line of work with First Mariner. As First
Mariner’s corporate representative testified, the job of loan officers such as Sergi was “to originate
loans.” ECF 101-10 at 59:4-5. Thus, First Mariner employee incentive plans, which are attached
to Sergi’s declaration, state that the job duties of loan originators included “coordinating with”
various third parties “to ensure that each of the Originators’ loans is processed, approved and
closed in a timely manner.” ECF 94-6, Ex. 2 at 3. Sergi likewise stated in his declaration that his
job duties included (among other things) “ordering title services from a title company and
coordinating with that title company to get the loan closed.” Id. ¶ 3. At the same time, First
Mariner’s incentive plan stated that Sergi’s performance of his duties was “subject to [First
Mariner] direction and control,” and that he performed his “duties for and on behalf of [First
Mariner],” id., Ex. 2 at 3. See Restatement, supra, §7.07(2) (scope of employment includes
“performing work assigned by the employer or engaging in a course of conduct subject to the
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employer’s control”). Thus, a reasonable factfinder could conclude that Sergi was performing
work assigned to him as a loan officer—namely, originating and closing mortgage loans—when
he referred Plaintiffs’ loans to Genuine Title in exchange for an illegal kickback.
Moreover, the record evidence is sufficient to allow a reasonable factfinder to conclude
that Sergi’s illegal referrals were made, at least in some in part, for First Mariner’s benefit. See
Adams v. Hyannis Harborview, Inc., 838 F. Supp. 676, 691 (D. Mass. 1993), aff’d sub nom., Adams
v. Zimmerman, 73 F.3d 1164 (1st Cir. 1996) (“[T]he servant need not be acting for the ‘exclusive
benefit’ of the principal, it is enough that the agent intended his acts to produce some benefit to
himself and to the principal second.” (quotation omitted)). While the evidence indicates that
kickbacks were paid to Sergi personally, First Mariner nonetheless received a tangible benefit from
the referral—namely, the performance of title services that were essential to closing the Plaintiffs’
loans. This is true regardless of whether the closing services could have been provided by another
title company. While Sergi’s illegal referral agreement may have been primarily motivated by his
own financial benefit, the relevant question is whether the referral was “intended by the employee
to serve any purpose of the employer.” Restatement, supra, § 7.07(2). Because a reasonable
factfinder could conclude that the answer to that question is “yes,” this Court cannot say, as a
matter of law, that Sergi’s actions were outside the scope of his employment. See Quick v. Peoples
Bank of Cullman Cty., 993 F.2d 793, 797 (11th Cir. 1993) (holding bank vicariously liable for loan
officers’ issuance of fraudulent loans, where the loan officer “had been assigned the function of
making loans, and his activities did further that aspect of the Bank's business”); Adams, 838 F.
Supp. at 691 (bank director acted within the scope of employment when he sold unregistered
securities to plaintiff because the bank director’s job duties included bringing in business to the
bank). Defendant is not entitled to summary judgment on this issue.
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ii. Standing
Defendant next argues that Plaintiffs lack Article III standing because they have not
introduced competent evidence establishing that they suffered a concrete injury. See Planmatics,
Inc. v. Showers, 137 F. Supp. 2d 616, 620 (D. Md. 2001) (“On a motion for summary judgment, a
district court may only consider evidence that would be admissible at trial.” (citations omitted)).
Standing is a doctrine rooted in the traditional understanding of an Article III “case or
controversy.” Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016). Standing consists of three
elements: “The plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the
challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial
decision.” Id. (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992)). The burden is on the
plaintiff to establish these elements. Id. To establish injury in fact, “a plaintiff must show that he
or she suffered ‘an invasion of a legally protected interest’ that is ‘concrete and particularized’ and
‘actual or imminent, not conjectural or hypothetical.’” Id. at 339 (quoting Lujan, 504 U.S. at 560).
Importantly, “a plaintiff must demonstrate standing ‘with the manner and degree of evidence
required at the successive stages of the litigation.’” TransUnion LLC v. Ramirez, 141 S. Ct. 2190,
2208 (2021) (quoting Lujan, 504 U.S. at 561). “In response to a summary judgment request, the
named plaintiff [in a class action] is obliged to ‘set forth by affidavit or other evidence specific
facts’ that, when taken as true, establish each element of Article III standing.” Baehr v. Creig
Northrop Team, P.C., 953 F.3d 244, 252 (4th Cir. 2020) (quoting Lujan, 504 U.S. at 561).
Since Spokeo, it is clear that plaintiffs may not satisfy the strictures of Article III by alleging
“a bare procedural violation.” 578 U.S. at 341. Rather, plaintiffs must have suffered a concrete
harm as a result of the “defendant’s statutory violation that is the type of harm Congress sought to
prevent when it enacted the statute.” Baehr, 953 F.3d at 253 (quoting Curtis v. Propel Prop. Tax
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Funding, LLC, 915 F.3d 234, 240-41 (4th Cir. 2019)). The Fourth Circuit has explained that under
RESPA, “the deprivation of impartial and fair competition between settlement services providers”
is not the kind of harm Congress sought to prevent and, thus, will not confer Article III standing.
Id. at 254. Rather, “the harm it sought to prevent is the increased costs . . . for settlement services.”
Id. (holding that deprivation of fair competition “untethered from any evidence that the deprivation
increased settlement costs—is not a concrete injury under RESPA”); see also Edmondson v. Eagle
Nat’l Bank, Civil No. SAG-16-3938, 2020 WL 3128955, at *3 (D. Md. June 12, 2020).
Thus, to survive Defendant’s motion for summary judgment, Plaintiffs must point to
competent evidence showing they were charged higher costs for their respective title services as a
result of the kickbacks paid to Sergi. Plaintiffs’ briefing makes clear that they seek to rely to a
significant degree on data compiled by Wells Fargo Bank, N.A. (“Wells Fargo”), reflecting the
80th percentile of title costs for every loan closed and funded by Wells Fargo’s retail lending unit
in 2009. ECF 101-24 at 80:13-84:19. Specifically, Plaintiffs seek to submit as evidence a chart
reflecting these 80th percentile amounts for each state. See ECF 99-45 (hereinafter “the 80th
Percentile Chart” or “the Chart”). The Chart was distributed to Wells Fargo’s retail loan processing
employees in March 2010 for use as a reference when analyzing title costs for certain types of
loans. Id.; ECF 101-24 at 139:4-12, 151:5-10. Another version of the Chart using updated data
was distributed internally by Wells Fargo in 2013. ECF 102-2 at 90:7-11. If the title charges on a
Wells Fargo retail loan exceeded the 80th percentile amount for the state where the loan was issued,
this signaled to Wells Fargo employees that the cost of the title services was unreasonable. Id. at
153:1-14. Plaintiffs claim the 80th Percentile Chart provides an “objective measure” of the
customary and reasonable costs of title services throughout the relevant period. ECF 97-1 at 40.
According to the Chart, the 80th percentile cost for title exam, search, and abstract fees for Wells
15
Fargo’s retail refinance loans issued in Maryland in 2009 was $497. ECF 99-45 at 2. By
comparison, Plaintiffs Bezek and Harris paid $910 and $1,200, respectively, in title exam and
abstract fees. ECF 94-3 at 3; ECF 94-5 at 3.
Initially, Defendant asserts that Plaintiffs have abandoned any argument that they suffered
a concrete injury, because they did not address the issue in their opposition to Defendant’s
summary judgment motion. See ECF 102 at 15; Johnson v. United States, 861 F. Supp. 2d 629,
634 (D. Md. 2012) (“Because the [plaintiffs] . . . failed to address the issue in any way in opposing
summary judgment, they abandoned this argument.”). This Court disagrees. In their opposition,
Plaintiffs directly reference the 80th Percentile Chart as a basis for establishing their injury in fact.
Specifically, Plaintiff’s opposition states that “[t]he title and settlement service charges on both
Class Representatives[’] loans also exceed [the 80th percentile] benchmark by several multiples
and are not ‘reasonable and customary.’” ECF 97-1 at 40. While this point was interspersed within
Plaintiffs’ broader analysis of the class members’ injuries and could have been highlighted more
prominently, Plaintiff certainly did not “fail[] to address the issue” so as to constitute
abandonment. Johnson, 861 F. Supp. 2d at 634.
Defendant next argues that the 80th Percentile Chart is not admissible because it is not
probative of whether Genuine Title overcharged Plaintiffs as a result of the kickbacks paid to Sergi.
ECF 102 at 16-18; ECF 112 at 5-6. Under the Federal Rules of Evidence, all “relevant” evidence
is admissible unless otherwise provided for by the United States Constitution, an Act of Congress,
or another applicable rule. Fed. R. Evid. 402; United States v. Abel, 469 U.S. 45, 51 (1984).
Evidence is relevant if it “has any tendency to make . . . more or less probable” a “fact [that] is of
consequence in determining the action.” Fed. R. Evid. 401. Defendant contends the Chart is not
relevant in this case because: (i) it only reflects data from loans funded and closed by Wells Fargo,
16
not First Mariner or any other bank; (ii) its sample loan population was limited to retail loans only;
(iii) Wells Fargo was unable to disclose various details regarding the data sample, including the
number of loans in the sample and how many different Maryland counties were represented; and
(iv) the sample only included loans from 2009, whereas Plaintiffs’ loans closed in 2010 and 2012,
respectively. ECF 102 at 16. While these points are certainly pertinent to how much weight a
factfinder may eventually give the Chart, they fail to show that the Chart is not relevant under the
expansive definition of Rule 401. To the contrary, the statistical measures in the Chart make it
more probable that Plaintiffs were overcharged (perhaps significantly so) for their title services.
ECF 94-3 at 3; ECF 94-5 at 2; ECF 99-45 at 2. Thus, the Chart satisfies the low bar for relevancy
set by Rule 401.
Defendant also contends that the Chart is inadmissible because it fails to satisfy Federal
Rule of Evidence 1006 and, alternatively, is hearsay not subject to any exception. Plaintiffs
respond that the Chart is a business record admissible under Federal Rule of Evidence 803(6).
This Court first agrees with Plaintiffs that Rule 1006 is inapplicable. That rule requires that
a party seeking to use a “a summary, chart, or calculation to prove the content of voluminous
writings, recordings, or photographs that cannot be conveniently examined in court . . . must make
the originals or duplicates available for examination or copying, or both, by other parties at a
reasonable time and place.” Fed. R. Evid. 1006. Defendant contends that Plaintiffs fail to satisfy
this rule because they cannot make the 80th Percentile Chart’s underlying source data—which
Wells Fargo no longer has access to, ECF 102-2 at 91:11-21, 92:16-20—available for copying or
examination. However, Rule 1006 applies to summary charts which are submitted “as a surrogate
for underlying voluminous records that would otherwise be admissible into evidence.” United
States v. Simmons, 11 F.4th 239, 262 (4th Cir. 2021) (quotation omitted). This may occur, for
17
example, when a party itself seeks to create and introduce a chart summarizing voluminous
business records excepted from the hearsay rule. See United States v. Laguerre, 119 Fed. App’x
458, 460-61 (4th Cir. 2005) (applying Rule 1006 to such a scenario). Here, however, the 80th
Percentile Chart is the actual business record at issue. It was created by Wells Fargo—not
Plaintiffs—and used by Wells Fargo’s retail loan employees as a reference for analyzing the
reasonableness of title costs. Several courts have concluded that such “summary” business records
offered pursuant to Rule 803(6) are not subject to the requirements of Rule 1006. See, e.g., U-Haul
Int’l, Inc. v. Lumbermens Mut. Cas. Co., 576 F.3d 1040, 1045-46 (9th Cir. 2009) (declining to
apply Rule 1006 to computer-generated summaries of insurance claim payments, where “the
summaries themselves constituted the business records” and were not merely “summaries of other
evidence”); Remy Holdings Int’l, LLC v. Fisher Auto Parts, Inc., No. 5:19-CV-00021, 2022 WL
193742, at *9 (W.D. Va. Jan. 21, 2022) (finding Rule 1006 “inapplicable” where the balance
spreadsheets offered “are the actual business records” and were “not stand-ins for underlying
records that must otherwise be admissible”); Taboas v. Fiddler, Gonzalez & Rodriguez, PSC, 39
F. Supp. 3d 188, 193-94 (D.P.R. 2014) (“Because the charts are productivity reports offered as
independent business records produced and kept within the ordinary course of [Defendant’s]
business and admissible under Federal Rule of Evidence 803(6), the charts are the writings at issue,
not summaries of other evidence.” (cleaned up)); see also 6 Weinstein’s Federal Evidence §
1006.08 (2021) (“Rule 1006 does not apply when the summaries themselves constitute the
business records.”). This Court agrees with these authorities and concludes that Rule 803(6)—and
not Rule 1006—governs the Chart’s admissibility.
That leaves the question of whether the 80th Percentile Chart satisfies the requirements of
Rule 803(6). The business records exception applies if: “(A) the record was made at or near the
18
time by—or from information transmitted by—someone with knowledge; (B) the record was kept
in the course of a regularly conducted activity of a business, organization, occupation, or calling,
whether or not for profit; (C) making the record was a regular practice of that activity; (D) all these
conditions are shown by the testimony of the custodian or another qualified witness . . . ; and (E)
the opponent does not show that the source of information or the method or circumstances of
preparation indicate a lack of trustworthiness.” Fed. R. Evid. 803(6). Defendant argues that
Plaintiffs cannot satisfy sections (C) and (E)—that is, the 80th Percentile Chart was not made
regularly by Wells Fargo and lacks sufficient indicia of trustworthiness.
With respect to regularity, Defendant points to testimony by Wells Fargo’s deponent
indicating that the bank only made two versions of the 80th Percentile Chart during the period
relevant to this litigation: once in 2010 (using 2009 data) and again in 2013 (using 2012 data). The
charts were not otherwise revised in the interim. According to Defendant, two updates in three
years is insufficient to show that creating the charts was a regular practice of Wells Fargo. See
Gen. Ins. Co. of Am. v. U.S. Fire Ins. Co., 886 F.3d 346, 358 (4th Cir. 2018) (“A qualified witness
must be able to testify that the record was ‘kept in the course of a regularly conducted business
activity and also that it was a regular practice of that business activity to make the record.’”
(emphasis added) (quoting United States v. Komasa, 767 F.3d 151, 156 (2d Cir. 2014)). However,
the 80th Percentile Chart was certainly used by Wells Fargo loan employees regularly throughout
the relevant time period. In fact, Wells Fargo’s deponent testified that it became part of the bank’s
standard procedure to reference the title costs for certain loans against the 80th percentile data. ECF
112-1 at 139:11-12. Furthermore, the integration of the 80th percentile data as part of Wells Fargo’s
retail loan process “was never revoked” after 2010, and the measure was used consistently by bank
employees throughout the relevant time period. Id. at 147:16-17, 151:16-21, 219:1-3. Under the
19
circumstances, this Court is satisfied that the consistent use of the 80th Percentile Chart by Wells
Fargo employees, and those employees’ ongoing reliance on its data throughout the relevant time
period, is sufficient to satisfy the regularity requirement in Rule 803(6)(C). See United States v.
Reese, 666 F.3d 1007, 1017 (7th Cir. 2012) (excluding evidence under Rule 803(6)(C) where
“[t]here was no adequate showing that it was a regular practice to make this sort of record, to
maintain it, or to rely upon it.” (emphasis added)). 7
Additionally, Defendant has failed to show that “the source of information or the method
or circumstances of preparation [of the 80th Percentile Chart] indicate a lack of trustworthiness.”
Fed. R. Evid. 803(6)(E). Defendant once again emphasizes the uncertain scope of the data sample
used to create the Chart, concluding that, without the ability to examine the underlying data set,
the Chart “is simply not reliable.” ECF 112 at 5. But the Chart was relied upon consistently by
Wells Fargo employees, who referenced it throughout the relevant time period as an objective
measure for determining when title costs for certain types of loans were too high. Once again,
Defendant’s objections are best directed to the weight that a factfinder may ultimately give to the
80th Percentile Chart, not whether the numbers in the Chart are a trustworthy reflection of the cost
of title services paid on Wells Fargo-funded retail loans. See, e.g., United States v. Wein, 521 F.
App’x 138, 140 (4th Cir. 2013) (concluding that the defendant’s claim the lack of testimony
regarding the accuracy or completeness of comments entered by customer service representatives
7
One widely respected evidence treatise has counseled that “Rule 803(6) should be interpreted so
that the absence of routineness does not result in exclusion of the record when all other
requirements of the rule are satisfied unless ‘the source of information’ or ‘the method or
circumstances of preparation’ indicate ‘a lack of trustworthiness.’” 1 Weinstein's Evidence Manual
§ 16.07 (2022). As discussed below, this Court concludes that neither the source of the 80th
percentile amounts nor the method of their calculation indicates a lack of trustworthiness.
20
during phone calls “does not affect the admissibility of the records [under Rule 803(6)] and is
directed to the weight of the evidence”).
Finally, Defendants contend that that the Chart is inadmissible because the information
purportedly reflected therein is itself hearsay. ECF 112 at 4-5. “Double hearsay in the context of a
business record exists when the record is prepared by an employee with information supplied by
another person.” United States v. Gwathney, 465 F.3d 1133, 1141 (10th Cir. 2006) (cleaned up),
cert. denied, 550 U.S. 927 (2007). In such cases, “[a]ny information provided by another person,
if an outsider to the business preparing the record, must itself fall within a hearsay exception to be
admissible.” Id.; see also Fed. R. Evid. 805 (“Hearsay within hearsay is not excluded . . . if each
part of the combined statements conforms with an exception to the rule.”). In this case, Wells
Fargo created the Chart using data from HUD-1 forms prepared by the title companies that
provided services for each loan. Defendants accordingly argue that because Plaintiffs have not
shown that data listed on the HUD-1 forms falls within a hearsay exception, the Charts must be
excluded. However, when a custodian incorporates records created by a third-party into their own
business records and relies on those records in conducting their business, “[s]uch evidence may
properly be considered by the Court under the business records exception.” Bey v. Midland Credit
Mgmt., Inc., No. GJH-15-1329, 2016 WL 1226648, at *5 (D. Md. Mar. 23, 2016) (citing Brawner
v. Allstate Indem. Co., 591 F.3d 984. 987 (8th Cir. 2010); United States v. Adefehinti, 510 F.3d
319. 326 (D.C. Cir. 2007)). In this case, Wells Fargo’s deponent testified that the bank took HUD1s for all of its funded loans into custody. ECF 112-1 at 127:7-17. Indeed, federal law required
Wells Fargo to retain each HUD-1 form for five years after settlement. 12 C.F.R. §1024.10(e).
Finally, Wells Fargo relied on the HUD-1 forms and the data included in them to run its business—
including, in this case, to determine when certain borrowers were being overcharged for title
21
services. ECF 112-1 at 139.8-140:7. Because the HUD-1 forms are themselves business records
that were incorporated into Wells Fargo’s records and relied upon by the Bank, they may be
considered. The 80th Percentile Chart based on the data from those HUD-1 forms is also therefore
admissible.
In short, the Chart is relevant evidence and is an admissible business record pursuant to
Rule 803(6). Of course, it will be up to a factfinder to ultimately determine how much weight to
afford the Chart—alongside any other evidence Plaintiffs seek to rely on, see, e.g., ECF 97 at 3741—in determining whether Plaintiffs were overcharged for their title services as a result of Sergi’s
kickback arrangement. For the purposes of summary judgment, however, Plaintiffs have “‘set forth
by affidavit or other evidence specific facts’ that, when taken as true, establish” an injury-in-fact
sufficient to support Article III standing. Baehr, 953 F.3d at 253 (citing Lujan, 504 U.S. at 561).
2. Class Issues
Defendant and Plaintiffs have both moved for summary judgment on issues regarding the
First Mariner Class claims. Defendant seeks summary judgment on the claims of 54 class
members, arguing that Plaintiffs have not shown any evidence of a RESPA violation with respect
to those members’ claims. ECF 94-1 at 22-24; ECF 102 at 18-23. Plaintiffs, in turn, have crossmoved for summary judgment cementing the 276 loans that comprise the First Mariner class.
i.
Class Membership
Though not chronological, the Court will first address Plaintiff’s cross-motion for summary
judgment with respect to class membership. In their motion for class certification, Plaintiffs
identified 330 First Mariner loans that potentially fell within the First Mariner Class definition:
this is, individuals that (1) received federally related loans brokered by First Mariner during the
relevant time period, and (2) received settlement services from Genuine Title. See ECF 34-8, ECF
22
34-9. Having now reviewed the HUD-1 settlement statements for these transactions during
discovery, Plaintiff claims it is “able to identify with certainty” 276 loans which meet the First
Mariner Class definition. ECF 97-1 at 17. Plaintiffs thus move for summary judgment identifying
the 276 transactions that comprise the First Mariner Class and excluding those loans that do not
meet the class definition. Defendant opposes summary judgment on this issue because, in its view,
Plaintiffs’ motion does not seek a “judgment” within the meaning of Rule 56.
Rule 56(a) permits a party to “move for summary judgment, identifying each claim or
defense — or the part of each claim or defense — on which summary judgment is sought.” Fed.
R. Civ. P. 56(a). Plaintiffs’ motion on this issue, however, does not describe a “claim” or “defense”
(or part thereof) related to the RESPA violations alleged in this action. Instead, Plaintiffs seek a
factual ruling from this Court that a specific number of prospective class members satisfy the class
definition in this Court’s certification Order. ECF 48 at 2. This is not an appropriate use of Rule
56(a). Furthermore, any attempt by Plaintiffs to rely on Rule 56(g) is also misplaced. Rule 56(g)
allows a party to seek an order “stating any material fact . . . that is not genuinely in dispute and
treating that fact as established in the case.” Fed. R. Civ. P. 56(g). But Rule 56(g) relief is only
available “if the court does not grant all the relief requested by the motion” under Rule 56(a). Fed.
R. Civ. P. 56(g). In other words, Rule 56(g) is inapplicable unless a party makes a proper Rule
56(a) motion. See Steeped, Inc. v. Nuzee, Inc., Case No. 19-cv-03763-HSG, 2020 WL 6891832,
*2 (N.D. Cal. Nov. 24, 2020) (stating that Rule 56(g) “becomes relevant only after the court has
applied the summary-judgment standard . . . to each claim, defense, or part of a claim or defense,
identified by the motion”); U.S. Equal Emp. Opportunity Comm’n v. CACI Secured
Transformations, LLC, No. CV JKB-19-2693, 2021 WL 1840807, at *14 (D. Md. May 7, 2021)
23
(“A court can deny a motion seeking to establish only facts as an improper Rule 56(g) motion,
even if it is styled as a 56(a) motion.”).
Furthermore, and as a practical matter, this Court concludes that issuing a judgment on the
scope of the First Mariner Class is unnecessary at this stage. The parties do not dispute that the
loans of 276 individuals meet the class definition in the Court’s certification order. As for loans
that the parties agree do not meet the class definition, they are no longer part of the instant action
and will not be bound by any adjudication thereof. 8 While this Court must ultimately make a
finding of the class membership to be bound by any judgment in this case, this determination will
rely on a variety of factors, including whether adequate notice was provided or whether any
individuals requested exclusion from the class. See Fed. R. Civ. P. 23(c)(3)(B). This Court
therefore declines to delineate the specific scope of the First Mariner Class at this stage of the
litigation.
ii.
Lack of Evidence
Defendant seeks summary judgment as to the claims of 54 First Mariner Class members,
arguing that Plaintiffs have failed to introduce evidence that the First Mariner loan officers who
originated those loans received any kickback from Genuine Title. Essentially, Defendant argues
that Plaintiffs’ have only generated proof of a kickback on loans directly attributable to eight First
Mariner employees: Sergi, Restivo, Alston, Iobbi, Buchanan, Bowen, Cohen, and Pobletts. For all
other loans in the First Mariner Class, Defendant claims it is entitled to summary judgment. For
the reasons discussed below, this Court agrees that Defendant is entitled to summary judgment on
some—but not all—of the 54 loans at issue.
8
This Court thus agrees with Plaintiffs that Defendant is not entitled to summary judgment on
any non-class claims, to the extent its motion may be interpreted as seeking such relief. See ECF
94-1 at 22-24; 97-1 at 18-19.
24
First, Defendant contends that Plaintiffs have failed to introduce evidence that certain loans
originated from First Mariner’s White Marsh branch were subject to Genuine Title’s kickback
arrangement with Pobletts. As discussed above, Zukerberg stated in his affidavit that Genuine Title
had a cash kickback arrangement with Pobletts and that all loans referred to Genuine Title by
Pobletts were labeled “1st Mariner – Theresa Frederick’s Branch.” ECF 94-16 ¶¶ 4-7. Defendant
thus acknowledges that Zukerberg’s affidavit provides sufficient evidence at this stage with respect
to the 67 First Mariner Class loans for which Pobletts is listed as the client contact or that are
labeled “1st Mariner – Theresa Frederick’s Branch.” The parties dispute, however, whether this
evidence suffices to overcome summary judgment for other class loans from the White Marsh
branch that are not otherwise directly attributed to Pobletts. Plaintiffs claim that Pobletts was a
“branch manager,” and therefore Zukerberg’s testimony alone constitutes evidence that “Genuine
Title paid a kickback on each First Mariner loan assigned and referred from” the White Marsh
branch. ECF 97-1 at 24. As Defendant correctly points out, Zukerberg’s affidavit referred to
Pobletts as a “loan officer,” not a branch manager. ECF 94-16 ¶ 4. However, Defendant
acknowledges in its reply that it believes “Pobletts was, at some point, a branch manager at its
White Marsh branch.” ECF 102 at 19 n.13. Indeed, one exhibit includes an email from Pobletts
sent on December 16, 2013, in which her signature block lists her as a branch manager in White
Marsh. ECF 101-16 at 2. Furthermore, Zukerberg’s testimony states that a referral fee was paid to
Pobletts “for all 1st Mariner borrowers’ loans assigned and referred by them that closed with
Genuine Title in 2012 and 2013.” ECF 94-16 at ¶ 8. Viewing the evidence in the light most
favorable to Plaintiffs, there is a genuine dispute as to whether Pobletts received a kickback in
connection with all the loans referred from the White Marsh branch to Genuine Title in 2012 and
25
2013. Defendants are not entitled to summary judgment with respect to the disputed White Marsh
claims.
Second, the parties dispute whether Plaintiffs have introduced evidence of a kickback
arrangement regarding loans originated by First Mariner employees Tammi Lewis, Daniel Gough,
and Tracie Duerr. Plaintiffs argue these loans are attributable to Sergi’s kickback arrangement,
pointing to (1) a statement from Glickstein’s declaration that Sergi received a kickback from “each
loan that Sergei’s [sic] group assigned and referred,” ECF 99-24 ¶ 8(a), and (2) emails and loan
documents indicating that Lewis, Gough, and Duerr each worked at the Ellicott City branch where
Sergi was employed, see ECF 101-17. However, in Sergi’s declaration obtained by Plaintiffs, he
identified himself as a “loan officer.” ECF 99-20 ¶ 1. He also stated in a later declaration that he
was not a group leader, was not part of any group during his time at First Mariner, and worked
exclusively as a loan officer except for a brief period in 2014 when he was a sales manager. 9 ECF
99-21 ¶¶ 2, 3. More importantly, the fact that Lewis, Gough, and Duerr worked at one of the
branches where Sergi was employed as a loan officer is insufficient, on its own, to create a genuine
dispute as to whether they referred loans in collaboration with Sergi or as part of his “group.” The
cited documents in no way indicate that Lewis, Gough, and Duerr worked with Sergi on specific
loans or were otherwise subject to his control. See ECF 101-17. Thus, Plaintiffs have failed to
introduced evidence linking loans originated by Lewis, Gough, and Duerr to Sergi’s kickback
arrangement with Genuine Title, and Defendant is entitled to summary judgment on the
corresponding class member claims.
9
Each of the loans that Lewis, Gough, and Duerr were responsible for closed in 2012 or earlier,
before Sergi became a sales manager.
26
Third, the parties contest whether several loans originated by First Mariner employees
Robert Gullace, Chris Perrin, Robert Hoover, and Ken Miller are attributable to Bowen. In his
April 28, 2022 declaration, Glickstein stated that “[t]here was a Referral Agreement related to Tom
Bowen[,] a loan officer, branch manager and sales manager employed by First Mariner[,]” and
further that Bowen was paid a $100-$200 marketing credit “[f]or each loan that a loan officer in
[his] group out of First Mariner’s Bel Air branch, or Tom Bowen, assigned and referred to Genuine
Title.” ECF 94-18 ¶ 8(a). Plaintiffs have pointed to First Mariner documents which indicate that
Bowen was the sales manager for Gullace, Perrin, Hoover, and Miller. ECF 101-14 at 4, 6.
Furthermore, Plaintiffs have introduced an email exchange between Glickstein and Bowen, in
which Glickstein asks for “a roster of all the [loan officers] within your office that will be sending
orders our way” so that Glickstein can “make sure they are properly on boarded.” ECF 99-26 at 2.
Bowen responds by sending Glickstein the names of Gullace, Perrin, Hoover, and Miller. Id. Taken
together, Plaintiffs’ evidence is sufficient to create a genuine dispute as to whether the loans sent
to Genuine Title by these four individuals were also part of Bowen’s kickback arrangement.
Therefore, Defendants are not entitled to summary judgment on these claims.
Fourth, Defendants seek summary judgment with respect to several class member loans
originated by Ryan Lowry. In opposition, Plaintiffs point to bank documents which purportedly
show that Lowry was the sales manager at First Mariner’s White Marsh Branch and the branch
manager at First Mariner Bel Air Branch where Bowen and Restivo were housed. See ECF 10114 at 3, 5. Plaintiffs also rely on Restivo’s declaration that “[t]he branch manager at My Branches
knew the Genuine Title business model of using a Referral Agreement to obtain business. As such,
I believe that he knew that myself and others were being compensated for the referral of 1st Mariner
27
borrowers to Genuine Title.” ECF 99-18 ¶ 12. Even assuming the veracity of this statement, 10 it
establishes only that Lowry may have known that Restivo and others were receiving kickbacks for
referrals to Genuine Title—not that Lowry himself received any such kickbacks. Thus, Plaintiffs
have pointed to no evidence that such an agreement was in place with respect to the class member
loans originated by Lowry. Defendant is therefore entitled to summary judgment on those class
member claims.
Fifth, Defendants challenge the evidentiary basis for a collection of First Mariner Class
claims which were originated by employees of First Mariner’s Eldersburg, Maryland branch. To
support these claims, Plaintiffs rely primarily on Glickstein’s April 28, 2022 declaration, in which
he identifies 15 loans originated by employees of the Eldersburg branch 11 that were referred to
Genuine Title through an intermediary named Brian Boateng. ECF 94-18 ¶ 9, ex. A. Glickstein’s
declaration further states that, “Based on my personal experience working with Brian Boateng, it
is more likely so than not so that the referral of these loans . . . were pursuant to an agreement to
provide a thing of value to First Mariner bank in exchange for the referral of loans to Genuine
Title.” ECF 94-18 ¶ 9. Defendant claims it does not know who Brian Boateng is, and further that
Glickstein’s statement fails to satisfy the requirement under Federal Rule of Civil Procedure
56(c)(4) that “[a]n affidavit or declaration used to support or oppose a motion must be made on
personal knowledge.” However, Glickstein’s declaration states that he worked with Boateng “in
10
Notably, in a subsequent declaration, Restivo stated that his sales manager—not his branch
manager—was aware that he was receiving marketing credits in exchange for Genuine Title
referrals. ECF 99-19 ¶ 11. Restivo added that he “[did] not know whether my branch manager was
aware” of the arrangement, and further stated that he had “no personal knowledge of whether my
branch manager knew of others at [First Mariner] receiving any kickback, fee, or anything else of
value for loan referrals to Genuine Title.” Id.
11
Though Glickstein’s declaration does not refer to the Eldersburg branch, other evidence
indicates that that First Mariner employees listed for each loan worked out of that branch. See ECF
94-18 at ex. A; ECF 101-13.
28
connection with several lenders” and it is based on this “personal experience” that he concludes
that it is likely that the 15 Eldersburg branch loans identified in the declaration were the product
of a kickback arrangement. This portion of the declaration therefore satisfies Rule 56(c)(4)’s
“personal knowledge” requirement and is sufficient to create a triable issue of fact regarding
whether the Eldersburg loans were referred subject to an illegal kickback arrangement. Ultimately,
it will be up to a jury to weigh Glickstein’s testimony at trial on this point, along with any other
evidence Plaintiffs may present.
Finally, Plaintiffs oppose summary judgment with respect to several loans attributed to
First Mariner employees Mark McNicholas, Anne Niederberger, and Denise DeCarolis on the
grounds that these individuals worked in the same branch or the same group as Iobbi, Buchanan,
or Alton. Once again, however, the fact that these individuals worked at the same branch as other
First Mariner employees who admitted to, or have been accused of, receiving kickbacks from
Genuine Title is insufficient, without more, to create a genuine dispute as to whether they also
participated in such a referral arrangement. See supra at 26. Defendant is entitled to summary
judgment with respect to these particular class claims.
In sum, this Court will grant summary judgment to Defendant on certain of the First
Mariner Class claims, in accordance with the analysis above. However, summary judgment will
be denied on the remainder of the disputed class claims, including those relating to the White
Marsh and Eldersburg branches.
3. Method of Calculating Damages
Defendant next seeks summary judgment on the method of calculating damages for a
RESPA violation. The amount of damages a successful RESPA plaintiff is entitled to is governed
by 12 U.S.C. § 2607(d)(2), which states:
29
Any person or persons who violate the prohibitions or limitations of this section
shall be jointly and severally liable to the person or persons charged for the
settlement service involved in the violation in an amount equal to three times the
amount of any charge paid for such settlement service.
Defendant argues that Plaintiffs’ RESPA damages are limited to three times the amount that each
borrower was overcharged for title and settlement services as a result of the alleged kickbacks.
Plaintiffs, on the other hand, argue that the plain language of the statute entitles them to treble the
amount of all settlement services charged by Genuine Title, regardless of whether a specific charge
was actually increased as a result of the kickback.
As the parties acknowledge, there is a split in authority regarding what amount of damages
should be trebled under § 2607(d)(2). Plaintiffs rely largely on analysis from a previous case in
this Court, Robinson v. Fountainhead Title Grp. Corp., 447 F. Supp. 2d 478 (D. Md. 2006). There,
the Court held that a RESPA plaintiff had adequately alleged in her complaint that she suffered an
overcharge as a result of a kickback and therefore had standing to bring her RESPA claim. Id. at
488. Alternatively, however, the Court concluded that such an overcharge was not necessary to
establish standing. Id. at 488-89. In reaching this latter conclusion, Robinson endorsed the
reasoning of another district court, Kahrer v. Ameriquest Mortgage Co., 418 F. Supp. 2d 748 (W.D.
Pa. 2005), which concluded that the seemingly expansive language of RESPA’s damages
provision—providing for recovery of three times the amount of any charge paid for settlement
services, as opposed to merely the amount of an overcharge—strongly indicated that allegations
of an overcharge were not necessary to show an injury-in-fact under the statute. Id. Ultimately,
Robinson agreed with Kahrer that the damages provided under RESPA “appear to encompass all
of the charges associated with the services provided rather than only treble the amount of any
overpayment.” Id. at 488 (quoting Kahrer, 418 F. Supp. 2d at 753).
30
Importantly, however, Robinson preceded Baehr. There, the Fourth Circuit, relying on the
Supreme Court’s decision in Spokeo, expressly held that a RESPA plaintiff must allege and prove
an overcharge in order to have standing to recover monetary damages. Baehr, 953 F.3d at 254-56
(“Congress specified in RESPA that by prohibiting kickbacks, the harm it sought to prevent is the
increased costs that ‘tend’ to result from kickbacks’ interference with the market for settlement
services.”). The Fourth Circuit rejected the plaintiffs attempted reliance on Robinson, reasoning
that Robinson was “pre-Spokeo” and, further, that the plaintiffs in Robinson had in fact alleged
injuries due to overcharges. Id. at 255. Thus, to the extent that Robinson held that a RESPA
plaintiff need not allege an overcharge to have standing, that holding has been overruled by Baehr.
Robinson’s brief discussion of RESPA’s damages provision as part of its now-repudiated standing
analysis is of little persuasive value here.
Ultimately, this Court agrees with Defendant that the best reading of § 2607(d)(2) is that a
damages award for a RESPA violation consists of three times the amount of the overcharge. “When
interpreting a statute, we begin with the plain language.” In re Total Realty Mgmt., LLC, 706 F.3d
245, 251 (4th Cir. 2013). Here, the statute provides for damages “in an amount equal to three times
the amount of any charge paid for such settlement service.” § 2607(d)(2) (emphasis added).
“Such” in this case refers back to “the settlement services involved in the violation.” Id. (emphasis
added). Plaintiffs, however, seek to treble the amount paid for all of their settlement services,
regardless of whether any of those charges were actually increased by an illegal kickback. This
includes charges for title insurance premiums, even though title insurance rates are set by
regulation in Maryland and the charges to a borrower cannot be altered by the title company. See
Md. Code. Ann., Ins., §§ 11-403(a)(1), (c); 11-407(b). This Court joins the numerous others who
have rejected Plaintiffs’ proposed reading of § 2607(d)(2). See Durr v. Intercounty Title Ins. Co.
31
of Ill., 14 F.3d 1183 (7th Cir.1994) (rejecting a demand for trebled damages on all settlement
services under RESPA); Morales v. Attorneys’ Title Ins. Fund, Inc., 983 F. Supp. 1418, 1427 (S.D.
Fla. 1997) (“[A] better reading of the statute is that the damage award consist of three times the
amount which violates RESPA.”); Moore v. Radian Group, Inc., 233 F. Supp. 2d 819, 826 (E.D.
Texas 2002); Mullinax v. Radian Guar., Inc., 311 F. Supp. 2d 474, 486 (M.D.N.C. 2004).
Defendant’s interpretation of § 2607(d)(2) is also consistent with RESPA’s purpose.
Specifically, Congress passed RESPA to protect consumers from “unnecessarily high settlement
charges caused by certain abusive practices” through “the elimination of kickbacks or referral fees
that tend to increase unnecessarily the costs of certain settlement services.” 12 U.S.C. § 2601; see
also Baehr, 953 F.3d at 254. It is difficult to see how RESPA’s goal of preventing increased
settlement charges is served by allowing a defendant to collect damages for charges, such as
insurance premiums, that are not in any way increased by an alleged kickback. Moreover, such an
approach is arguably at odds with Baehr, which specified that the injury-in-fact that gives a
plaintiff standing to bring a RESPA claim is the increased costs—i.e., the overcharge—that result
from an illegal kickback. Baehr, 953 F.3d at 254-56. 12 Under Plaintiffs’ proposed reading, the
12
For this reason, Plaintiffs’ reliance on Kahrer, which explicitly rejected the reasoning of Durr,
Morales, and Moore, is misplaced. Kahrer, like the other cases discussed above, was ultimately a
case about standing. Specifically, the district court concluded that the language of § 2607(a)
allowed a plaintiff to collect damages beyond any actual overcharge, and therefore a plaintiff did
not need to allege an overcharge to show standing. Kahrer, 418 F. Supp. 2d at 751-56. But
Kahrer’s standing holding is not compatible with binding Fourth Circuit case law stating that the
“injury” which Congress sought to address with RESPA is the increased costs resulting from
kickbacks. See Baehr, 953 F.3d at 254-56. Moreover, Kahrer’s analysis implicitly acknowledges
that standing and damages are intertwined. See TransUnion, 141 S.Ct. at 2208 (“[P]laintiffs must
demonstrate standing for each claim that they press and for each form of relief that they seek.”).
Essentially, Plaintiffs ask for a damages remedy that is divorced from the injury that gives them
standing to bring their RESPA claims. This Court concludes that the better reading of § 2607(d)(2)
is the one that harmonizes RESPA’s remedial structure with the standing requirements of Article
III.
32
amount of damages available to a RESPA plaintiff would be determined completely by the amount
paid for title services (with larger loans subject to higher title insurance premiums and, by
extension, greater damages), regardless of the amount of any actual overcharge. This Court rejects
such an approach, and instead agrees that “[t]ying (and trebling) the recoverable damages to that
portion of the charge for the settlement service ‘involved in the violation’ advances the purposes
of RESPA while respecting Article III’s command that a private plaintiff must suffer an actual
injury before invoking the jurisdiction of a United States District Court.” Moore, 233 F. Supp. 2d
at 825.
In sum, this Court agrees with Defendant that pursuant to § 2607(d)(2), the damages
Plaintiffs may seek are treble the amount (if any) that they were overcharged by Genuine Title as
a result of the alleged illegal kickbacks. Defendant is entitled to summary judgment on this issue.
4. Successor Liability
Plaintiffs seek summary judgment establishing Defendant’s successor liability for
Plaintiffs’ claims against First Mariner. In opposition, Defendant does not attempt to argue that it
did not expressly assume First Mariner’s RESPA liability when it merged with First Mariner’s
successor in interest, Howard Bank. Rather, Defendant merely contends that “[s]uccessor liability
is not an independent cause of action,” and that any grant of summary judgment on this issue, prior
to determining First Mariner’s underlying liability, would be “premature.” ECF 102 at 33-34.
Defendant’s arguments misapprehend Rule 56. As discussed above, Rule 56(a) expressly
permits a party to seek summary judgment on any “claim or defense – or the part of each claim or
defense . . . .” Fed. R. Civ. P. 56(a); see also CACI Secured Transformations, 2021 WL 1840807,
at *14 (noting that Rule 56 “contemplates the possibility that summary judgment may be entered
on less than a full claim and on one or fewer than all of the elements necessary to establish a claim”
33
(quotation omitted)). In contrast to Plaintiffs’ request for judgment on whether the 276 First
Mariner Class members satisfy the class definition, see supra at 22-24, Defendant’s successor
liability is an essential aspect of the legal claims made by Plaintiffs and the Class, see ECF 81 ¶¶
7, 120, as well as a potential defense. Furthermore, Plaintiffs’ request for summary judgment is
based on the undisputed content of two merger agreements, and therefore presents a purely legal
issue. Defendant has not challenged the relevant terms in the merger agreements or argued that
their terms are susceptible to more than one meaning. Accordingly, Plaintiffs’ request for summary
judgment on the issue of successor liability is proper under Rule 56(a).
Furthermore, this Court agrees with Plaintiff that, under the terms of the merger
agreements, Defendant expressly assumed liability for First Mariner’s alleged violations of
RESPA. Specifically, First Mariner’s merger agreement with Howard Bank, which was entered
into on August 14, 2017, included a clause stating that Howard Bank “shall succeed to and assume
all the rights and obligations of First Mariner in accordance with” Maryland law. ECF 99-1, at ¶
1.1. Maryland law provides that, in the event of a consolidation or merger, “[t]he successor is liable
for all the debts and obligations of each nonsurviving corporation.” Md. Code Ann., Corps. &
Ass’ns § 3-114(f)(1); see also Ramlall v. MobilePro Corp., 30 A.3d 1003, 36 (Md. Ct. Spec. App.
2011) (“In Maryland, the General Assembly has imposed the condition that when two corporations
merge, the debts and obligations of the predecessor corporation become the debts and obligations
of the successor corporation.”). Similarly, Howard Bank’s merger agreement with Defendant
contained a clause stating that Defendant “shall be responsible for all the liabilities of every kind
and description, of each of [Defendant] and Howard Bank existing immediately prior to”
34
completion of the merger. ECF 99-5, at ¶ 6. 13 The merger became effective on or about February
5, 2022. ECF 99-6, at 4; ECF 77, at ¶ 5. Thus, under the plain terms of the merger agreement,
Defendant at that time expressly assumed “all the liabilities” of Howard Bank—including Howard
Bank’s liability for Plaintiffs’ and the First Mariner Class’s RESPA claims, which it assumed as
part of its merger with First Mariner.
Plaintiffs are thus entitled to summary judgment on the issue of whether Defendant, as First
Mariner’s successor in interest, can be held liable for Plaintiffs’ and the class’s RESPA claims,
should they ultimately be proven.
C. Motion to Decertify the First Mariner Class
In addition to seeking summary judgment on the issues discussed above, Defendant’s
motion asks this court to decertify the First Mariner Class. Specifically, Defendant asserts that
“[c]ircumstances have changed significantly” since this Court certified the First Mariner Class in
October, 2020, such that the class can no longer satisfy the requirements of Rule 23. ECF 94-1 at
29. As noted above, “an order certifying a class must be reversed if it becomes apparent, at any
time during the pendency of the proceeding, that class treatment of the action is inappropriate.”
Minter, 2013 WL 1795564 at *2 (quoting Stott, 916 F.2d at 139). At the same time, “decertification
is a drastic step, not to be taken lightly.” Alig v. Quicken Loans Inc., No. 5:12-CV-114, 2017 WL
5054287, at *10 (N.D.W. Va. July 11, 2017) (quoting 3 Newberg on Class Actions § 7:37 (5th ed.
2013)). “Courts thus consistently hold that ‘there must be some development or change in
circumstances to merit revisiting a class certification decision.’” Id. (quoting In re J.P. Morgan
13
The merger agreement between Howard Bank and Defendant was governed by Maryland and
Pennsylvania law. ECF 99-4, at § 1.1, 1.3(a). Like Maryland, Pennsylvania law provides that all
debts, obligations, and liabilities of a merging association are assumed by the surviving
association. See 15 Pa.C.S. § 336(a)(4); LTV Steel Co., Inc. v. Workers’ Comp. Appeal Bd.
(Mozena), 754 A.2d 666, 677 (Pa. 2013).
35
Chase Cash Balance Litig., 255 F.R.D. 130, 133 (S.D. N.Y. 2009)); Minter, 2013 WL 1795564 at
*2.
i.
Adequacy of Representation and Overbreadth
Initially, Defendant makes two preliminary arguments in favor of decertification, both of
which are unavailing. First, Defendant contends that the class lacks adequate representation
pursuant to Rule 23(a)(4) because Defendant is entitled to summary judgment on the named
Plaintiffs’ claims. See 3 Newberg and Rubenstein on Class Actions § 7:38 (6th ed.) (“[I]f a class
lacks adequate representation, it is susceptible to decertification.”) However, for the reasons
described above, this Court has already denied Defendant’s summary judgment motion with
respect to Plaintiffs’ claims. See supra at 9-22. Second, Defendant briefly argues that this Court
should decertify the class as impermissibly overbroad. ECF 94-1 at 30. But while Defendant
contends that no evidence of an illegal referral exists with respect to “dozens” of First Mariner
Class loans, this Court has already concluded that Defendant is only entitled to summary judgment
on a small portion of the disputed class member claims. For the remainder of the class claims,
which constitute the vast majority of the 276 loans that undisputedly satisfy the class definition,
Plaintiffs have introduced evidence sufficient to create a genuine dispute that the loans were
referred to Genuine Title pursuant to an illegal kickback scheme. Thus, the relative breadth of the
First Mariner Class provides no basis for decertification.
ii.
Predominance
The primary basis of Defendant’s decertification motion is that certification of the First
Mariner Class is no longer appropriate under Rule 23(b)(3). Once again, that rule requires the
Court to find “that the questions of law or fact common to class members predominate over any
questions affecting only individual members.” Fed. R. Civ. P. 23(b)(3). To satisfy predominance,
36
common questions must have a significant “bearing on the central issue in the litigation.” EQT
Prod. Co. v. Adair, 764 F.3d 347, 366 (4th Cir. 2014). In other words, the requirement is met where
all class members’ claims “depend upon a common contention,” and establishing “its truth or
falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.”
Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). As this Court stated in its Memorandum
Opinion granting Plaintiffs’ motion for class certification, “the essence of each proposed class
member’s claim against First Mariner is that First Mariner referred them to Genuine Title for
settlement services because Genuine Title promised to, and actually did, provide cash or other
kickbacks to First Mariner in accordance with a prior common agreement.” ECF 47 at 10.
Defendant presents several arguments for why the requirements of Rule 23(b)(3) are no
longer satisfied in this case, including that (1) RESPA liability cannot be established by common
proof, (2) the allegedly illegal referrals are not typical class-wide, (3) individual issues regarding
standing and RESPA damages predominate, and (4) individual questions regarding Defendant’s
statute of limitations defense predominate. For the reasons explained below, however, none of
these assertions provides a basis for decertifying the First Mariner Class.
First, Defendant contends that discovery has failed to result in any evidence of a
widespread or common kickback scheme between Genuine Title and First Mariner, and therefore
RESPA liability cannot be established by common proof. In essence, Defendant insists that the
evidence introduced is limited to the isolated conduct of “eight rogue employees,” and therefore
First Mariner’s liability necessarily turns on individual inquiries into the conduct of those
employees. ECF 94-1 at 31-32. As an initial matter, the number of employees involved in the
purported kickback arrangement is disputed, and Plaintiffs have introduced evidence that Genuine
Title’s relationship with First Mariner extended beyond the eight “rogue employees” to other
37
individuals at multiple First Mariner branches. Moreover, as the Court observed when certifying
the class, “[t]he nature of the alleged conduct of all the loan officers . . . is largely the same.” ECF
47 at 12. Thus, the Court is not convinced that Defendant’s vicarious liability for its employees’
conduct will hinge on burdensome individual inquiries. Vicarious liability undoubtedly will,
however, turn on common questions of whether those employees were acting within the scope of
their employment when they allegedly referred loans to Genuine Title as part of a kickback
arrangement. And Defendant has offered no reason to believe that any of the employees identified
by Plaintiffs are uniquely situated, such that individual issues will predominate in any vicarious
liability analysis.
Next, Defendant argues that determining whether First Mariner employees actually
“referred” any class loan to Genuine Title in violation of RESPA will require “an inherently
individualized analysis of the circumstances by which Genuine Title came to provide settlement
services in connection with that particular loan.” ECF 94-1 at 33. See 12 U.S.C. § 2607(a);
Fangman, 2016 WL 6600509, at *12 (requiring a RESPA plaintiff to prove an “actual referral” of
settlement business in exchange for a thing of value). This argument essentially repeats contentions
raised and addressed at the certification stage, and Defendant identifies no changed circumstances
that would merit decertification. See Alig, 2017 WL 5054287, at *10 (“A motion to decertify is
not, however, to be treated as another bite at the apple in the absence of changed circumstances.”)
Furthermore, courts have broadly construed what constitutes a referral in the RESPA context,
emphasizing that a referral “need not be the exclusive or even the primary reason that influenced
a home buyer’s choice of a real estate service provider.” Edwards v. First Am. Corp., 798 F.3d
1172, 1184 (9th Cir. 2015); Palombaro v. Emery Fed. Credit Union, No. 1:15-cv-792, 2017 WL
3437559, at *11-12 (S.D. Ohio Aug. 10, 2017) (finding common questions regarding whether
38
referrals occurred predominated even where a class member may have chosen Genuine Title prior
to a referral). Given this broad definition and the evidence Plaintiffs have adduced of a common
kickback scheme between Genuine Title and various First Mariner employees, this Court is
convinced that class-wide questions on whether the class members were referred to Genuine Title
predominate over any potential individual issues. Furthermore, Defendant’s related contention that
Plaintiffs’ claims are not sufficiently typical under Rule 23(a)(3) because other class claims
involve different loan officers or other forms of kickbacks has already been addressed by this Court
at the certification stage and, in any event, is meritless. See Broussard v. Meineke Discount Muffler
Shops, Inc., 155 F.3d 331, 338 (4th Cir. 1998) (explaining that class certification primarily requires
the class representative to have the “same interest” and “same injury” as other class members);
Palombaro, 2017 WL 3437559 at *7 (finding the typicality requirement met where proposed
RESPA class members worked with different loan officers because “[d]ifferences in the form or
amount of kickback are not relevant to whether [the defendant’s] overall conduct, if otherwise
uniform and proven, is culpable”).
Additionally, Defendant makes two related assertions that individualized inquiries
regarding class member standing and damages destroy predominance. With respect to standing,
Defendant points to the Supreme Court’s recent holding in TransUnion that “[e]very class member
must have Article III standing in order to recover individual damages,” 141 S.Ct. at 2208, and
contends that Plaintiffs have failed to identify a “coherent way to prove, on a class-wide basis, that
class members paid increased settlement costs because of purported kickbacks.” ECF 94-1 at 36.
However, as this Court recently noted in a related case, “the fact that Plaintiffs may have been
overcharged by different amounts as a result of the kickbacks at issue neither destroys their
standing nor the predominance of the common legal and factual issues related to their claims.”
39
Brasko v. Howard Bank, No. 1:20-CV-3489-SAG, 2022 WL 951771, at *3 (D. Md. Mar. 29,
2022); see also id. (“Surely the Supreme Court did not hold in TransUnion that a class may not be
certified if its members have suffered different amounts of monetary harm.”) Of course, under
TransUnion, Plaintiffs must ultimately prove that each class member has Article III standing.
However, Plaintiffs have proposed evidence reflecting multiple, common measures by which to
determine whether an individual class member was overcharged for title services, including the
Wells Fargo’s 80th Percentile Chart. See ECF 105-1 (reflecting evidence Plaintiffs’ seek to rely on
to establish standing for each class member). If Plaintiffs’ arguments prevail, comparing these
objective numbers against the title costs listed on the class members’ HUD-1 forms should be a
relatively streamlined endeavor, particularly given the manageable size of the First Mariner Class.
Likewise, this Court is not convinced at this stage that the need to account for lender credits on
certain loans is sufficient to overcome common questions in determining whether the class
plaintiffs were indeed overcharged for title services.
For similar reasons, this Court disagrees with Defendant that the need for individualized
damage assessments makes class treatment untenable. The Fourth Circuit has made clear that
“Rule 23 contains no suggestion that the necessity for individual damage determinations destroys
commonality, typicality, or predominance, or otherwise forecloses class certification.” Gunnells,
348 F.3d at 427-28. To the contrary, “Rule 23 explicitly envisions class actions with such
individualized damage determinations.” Id. at 428. While this Court’s holding that RESPA
damages are limited to the amount of any overcharge undoubtedly means that some individual
analysis will be required to ascertain any damages, this fact alone is insufficient to decertify the
First Mariner Class, where common issues continue to predominate regarding Defendant’s liability
for violations of RESPA. See id. (“If common questions predominate over individual questions as
40
to liability, courts generally find the predominance standard of Rule 23(b)(3) to be satisfied.”
(quotation omitted)).
Finally, Defendant reprises its argument raised at certification regarding the diligence
exercised by each borrower in bringing their claims, contending that application of its statute of
limitations defense to individual class members will be “unwieldy.” ECF 94-1 at 39-40. However,
this Court has already concluded at the certification stage that, given the First Mariner Class’s
relatively limited size and geographic scope, “it can assess, collectively, whether the available
information and media reporting related to prior litigation and enforcement proceedings would
have prompted a reasonable person to uncover the facts substantiating Plaintiffs’ RESPA claims.”
ECF 47 at 11-12. See also Dobbins v. Bank of America, N.A., Civil No. SAG-17-0540, 2020 WL
5095855, at *7 (D. Md. Aug. 28, 2020); Edmondson, 2020 WL 3128955, at *5-7. And while this
Court left open the possibility that it might revisit this issue if later factual development revealed
that certain class members were uniquely situated so that disparate inquiries into due diligence
would be required, Defendant has pointed to no such facts that would undercut or alter this Court’s
prior ruling.
In sum, none of the supposedly changed circumstances identified by Defendant destroy
predominance or otherwise require decertification of the First Mariner Class. Defendant’s motion
to decertify will therefore be denied.
IV.
CONCLUSION
For the foregoing reasons, Plaintiffs’ Motion for Leave to File a Surreply, ECF 109, is
GRANTED. Defendant’s Motion for Summary Judgment and Decertification, ECF 94, is
GRANTED IN PART and DENIED IN PART. Although Defendant is entitled in partial summary
judgment in accordance with the analysis set forth above, the remainder of the motion (including
41
its request to decertify the First Mariner Class) will be denied. Plaintiffs’ cross motion for partial
summary judgment, ECF 97, is GRANTED IN PART on the issue of successor liability and
DENIED IN PART on the issue of class membership. Finally, the parties’ respective motions to
seal certain exhibits which are subject to confidentiality orders issued by this Court, ECF 98, 113,
will be GRANTED. A separate order follows.
Dated: January 20, 2023
/s/
Stephanie A. Gallagher
United States District Judge
42
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