United States District Court, E.D. Arkansas, Jonesboro Division
SAVOIL KING and DOROTHY KING, for themselves and all Arkansas residents similarly situated PLAINTIFFS
HOMEWARD RESIDENTIAL, INC. and OCWEN LOAN SERVICING, LLC DEFENDANTS
motion to certify class [Doc. No. 114] is denied because the
proposed class definition does not satisfy Federal Rule of
Civil Procedure 23.
Dorothy and Savoil King first filed this class action
complaint on July 28, 2014, asserting claims under the
Arkansas Deceptive Trade Practices Act (“ADTPA”)
and unjust enrichment. On May 9, 2017, notice of Savoil
King's death was filed [Doc. No. 147], and so plaintiff
Dorothy King is henceforth referred to in the singular. King
claims she purchased a home in 1994, her mortgage was
serviced by Homeward Residential Inc.
(“Homeward”) and Ocwen Loan Servicing, LLC
(“Ocwen”), and the mortgage contract expressly
gave her servicer the right to purchase insurance for
King's home and charge her for (“force
place”) it if she allowed the insurance on the home to
lapse or become inadequate. Second Amended Class Action
Complaint ¶ 2, Doc. No. 110. King claims that, despite
having insurance coverage on her home, the defendants
wrongfully force placed insurance on her home twice, once for
a period of approximately two years. Id.
¶¶ 35, 44, 45.
essence, King brings two entirely distinct claims. First,
defendants knew that she did not let her insurance lapse, so
she should not have been “double-billed” for
insurance. Id. ¶¶ 20, 45. Second,
the force place insurance premiums were “excessively
high” as a result of collusive and anti competitive
practices on the part of the defendants, who were motivated
by kickbacks. Id. ¶¶ 19, 27, 45. In
support of the second claim, King has consistently
represented that “the claims here are not that the
rates are excessively high, ” see, e.g., Doc.
No. 126, at 2, but instead that she is merely challenging
Homeward's decision to purchase insurance from QBE when
the premiums charged by QBE were excessively higher than the
premiums charged by other insurers. See, e.g., Doc.
No. 138 at 1-2; see also Doc. No. 35, at 5 (holding
that, King is “not challenging insurance rates”).
But, King's complaint clearly claims that she was charged
an “excessively high premium.” Second Amended
Class Action Complaint ¶ 45.
claims under the ADTPA and for unjust enrichment were
dismissed. Ultimately, the Kings amended their class action
complaint [Doc. No 49] to assert a claim for breach of
contract, and that claim was dismissed as well [Doc. No. 56].
The Kings appealed. The only issue on appeal was whether
their claim for unjust enrichment was properly dismissed,
see Doc. No. 75, at 1, and the Eighth Circuit Court
of Appeals vacated the dismissal of the unjust enrichment
claim and remanded. Id. at 3.
remand, King is proceeding on theories of unjust enrichment
and conversion based on the allegations in her second amended
class action complaint, and she moves for class certification
[Doc. No. 114]. She wants an injunction, restitution, and
punitive damages. King admits that defendants have returned
her force place insurance premiums to her but appears to be
requesting the payment of interest on those payments.
See Doc. No. 138, at 3 (“Defendants only
returned the money it had taken from Dr. King after
wrongfully force-placing insurance on her on two separate
occasions, and after she was forced to file this lawsuit
against them to get them to stop.”).
class action is an exception to the usual rule that
litigation is conducted by and on behalf of the individual
named parties only. To come within the exception, a party
seeking to maintain a class action must affirmatively
demonstrate his compliance with Rule 23.” Comcast
Corp. v. Behrend, 133 S.Ct. 1426 (2013) (internal
quotations omitted). Thus, class certification is only
appropriate when the four threshold requirements of Rule
23(a) are satisfied. Wal Mart Stores, Inc. v. Dukes,
564 U.S. 338, 349 (2011). These requirements- numerosity,
commonality, typicality, and adequate representation-
“effectively limit the class claims to those fairly
encompassed by the named plaintiff's claims.”
Id. (internal quotations omitted). The proposed
class must also fit within one of the three subsections of
Rule 23(b). Comcast Corp., 133 S.Ct. at 1432.
proposed class includes all citizens of Arkansas who a) had a
mortgage or deed of trust securing a loan on real estate
within the state of Arkansas, b) where the loan was serviced
by Homeward, c) where Homeward force placed insurance on such
property and demanded the premiums be paid to it, and d) who,
from June 5, 2009, through the date of entry of an order
certifying the class, paid or who still owe premiums for the
force place insurance secured by Homeward. Motion to Certify
Class, Doc. No. 114, at 2. The proposed class excludes anyone
who has filed a claim in court for damages based upon similar
allegations, anyone employed by any defendant, and the
presiding judge over this action and his immediate family
members. Id. Essentially, the proposed class
includes anyone who had insurance force placed by Homeward
since June 5, 2009, regardless of whether his or her
insurance policy had lapsed and regardless of what type of
real estate the mortgage or deed of trust secured. King says
as many as 3, 900 class members fitting this class definition
have been identified.
is not a contested issue and it does not likely pose a
problem for King's proposed class. Numerosity requires
that “the class is so numerous that joinder of all
members is impracticable.” Fed.R.Civ.P. 23(a)(1).
Classes containing as few as 25 and 35 members have been
certified. Dirks v. Clayton Brokerage Co. of St. Louis,
Inc., 105 F.R.D. 125, 131 (D. Minn. 1985).
typicality, and adequacy, however, do present problems for
King's proposed class. See Dukes, 564 U.S. at
376 n. 5 (discussing that commonality, typicality, and
adequacy requirements tend to merge); Pipes v. Life
Inv'rs Ins. Co. of Am., 254 F.R.D. 544, 549 (E.D.
Ark. 2008) (typicality has a qualitative aspect related to
commonality and adequacy that requires a named representative
to be a member of the class she seeks to represent). In
addition to requiring “questions of law or fact common
to the class, ” Fed.R.Civ.P. 23(a)(2), commonality is
interpreted to require that “the plaintiff demonstrate
that the class members have suffered the same injury.”
See Dukes, 564 U.S. at 349-50 (internal quotations
omitted). The class members' claims “must depend
upon a common contention” the truth or falsity of which
“will resolve an issue that is central to the validity
of each one of the claims in one stroke.” Id.
at 350. “In general, typicality is established if the
claims of all the class members arise from the same event or
course of conduct, or are based on the same legal
theory.” Haney v. Recall Center, 282 F.R.D.
436, 440 (W.D. Ark. 2012). Because adequacy merges with the
requirement that a class representative possess the same
interest and suffer the same injury as the class members, a
representative that fails commonality and typicality also
fails adequacy. See Nelson v. Wal-Mart Stores, Inc.,
245 F.R.D. 358, 371 (E.D. Ark 2007).
has maintained from the beginning of this litigation that
Homeward wrongfully forced insurance on her and other
potential class members who did not allow their insurance to
lapse, which resulted in her being
“double-billed” for insurance. See,
e.g., Second Amended Class Action Complaint ¶ 35
(“Defendants force this insurance in disregard of the
fact that the Kings and other members of the Class have
homeowners's insurance in place.”). Even if this
common contention is resolved in favor of King, it may only
demonstrate that she is entitled to recover the entirety of
the premiums wrongfully charged and perhaps the interest on
those wrongfully charged premiums. The resolution of that
issue would settle nothing in regard to members of the
proposed class whose insurance lapsed and who had insurance
forced on them as a result, as permitted under their
contracts with defendants. Id. ¶ 2. This latter
category of class members who were not
“double-billed” may only be entitled to a portion
of the premium paid, if ...