Supreme Court rules that consumers overcharged by title companies may bring suit

By Douglas K. Marsico, Esq.

The Pennsylvania Supreme Court has ruled that title companies which overcharge for title insurance may be liable to consumers under the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL). These penalties include payment of up to triple the actual financial damages and attorney fees.

In White vs. Conestoga Title Company, White claimed that she was overcharged for her title insurance when she refinanced her home. Specifically, she was charged the reissue rate (90 percent of the basic rate) for the title insurance policy instead of the reduced refinance rate (80 percent of the reissue rate). This resulted in an overpayment of $101.65.

White filed a class action on behalf of other similarly situated consumers who were overcharged by Conestoga. White claimed that "Conestoga engaged in a pervasive, long-standing scheme of deception in which it willfully refused to apply its Reissue and Refinance Rates to the financial detriment of hundreds of purported class members."

Based on the allegations, White asserted common law claims for damages and unjust enrichment, and a claim under the UTPCPL. The trial court dismissed the claims reasoning that White had an exclusive administrative remedy provided by the Insurance Department Act of 1921. Under that act, an aggrieved party has a remedy available by filing a complaint with the insurance department. Under Pennsylvania's Statutory Construction Act of 1972, when a statute provides a remedy for the breach of a statutory obligation, that remedy is exclusive. Thus, since the Insurance Department Act of 1921 provided White with an administrative remedy, the court lacked jurisdiction to hear her claims.

On appeal, the Pennsylvania Supreme Court reversed. The court agreed that the administrative remedies under the Insurance Department Act of 1921 precluded White from bringing a civil action under Pennsylvania common law for actual damages and unjust enrichment were barred. However, White was not barred from bringing an action for a distinct statutory cause of action as provided for in the UTPCPL. The court explained that the Statutory Construction Act of 1972 provision related to exclusive administrative remedies only applied to common law remedies. It did not apply to a remedy provided by a statute, such as the UTPCPL.

The case has now been remanded back to the trial court where White and others in her class can pursue her claims under the UTPCPL. If successful, the title company may be exposed to triple damages and payment of attorney fees.

Mr. Marsico is an attorney with Caldwell & Kearns which serves as general counsel to PAR. A portion of his practice is dedicated to providing advice and counsel to real estate licensees and representing and defending real estate salespersons and brokers in civil lawsuits and licensing claims across the Commonwealth. He routinely counsels employers on employee relations issues as one of the voices of the PAR Legal HotLine.