Spencer Alpert v. Nationstar Mortgage LLC ( 2020 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
SPENCER ALPERT, No. 19-35867
Plaintiff-Appellant,
D.C. No.
v. 2:15-cv-01164-
RAJ
NATIONSTAR MORTGAGE LLC, a
Delaware limited liability company;
HARWOOD SERVICE COMPANY, a ORDER
Delaware corporation, CERTIFYING
Defendants-Appellees, QUESTIONS
TO THE
and WASHINGTON
SUPREME
AMERICAN SECURITY INSURANCE COURT
COMPANY, a Delaware corporation;
STANDARD GUARANTY INSURANCE
COMPANY; ASSURANT, INC., a
Delaware corporation,
Defendants.
Filed December 31, 2020
2 ALPERT V. NATIONSTAR MORTGAGE
Before: Ronald M. Gould and Michelle T. Friedland,
Circuit Judges, and Stephen R. Bough, * District Judge.
Order
SUMMARY **
Certification of Questions to Washington Supreme
Court
The panel filed an order deferring submission and
certifying the following questions to the Washington State
Supreme Court:
1. Should the filed rate doctrine apply to
claims by a Washington homeowner against
a loan servicer arising from the placement of
lender placed insurance on the Washington
homeowner’s property where the servicer
purchased the insurance from a separate
insurance company who filed the insurance
product with the Washington State Office of
the Insurance Commissioner?
2. In the event the filed rate doctrine does
apply to this type of transaction, do the
damages requested by Plaintiff fall outside
*
The Honorable Stephen R. Bough, United States District Judge for
the Western District of Missouri, sitting by designation.
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
ALPERT V. NATIONSTAR MORTGAGE 3
the scope of the filed rate doctrine, or rather
do they “directly attack agency-approved
rates,” such that they are barred under
McCarthy Finance, Inc. v. Premera, 347 P.3d
872, 875 (Wash. 2015)?
COUNSEL
Jason Anderson, Emerald City Law Firm PC, Seattle,
Washington, for Plaintiff-Appellant.
Justin D. Balser and Taylor T. Haywood, Akerman LLP,
Denver, Colorado; Bryan T. Brown, Akerman LLP, Dallas,
Texas; for Defendants-Appellees.
ORDER
This case concerns whether the filed rate doctrine applies
to a claim that a mortgage lender overcharged for force
placed insurance when it passed through to a borrower the
rate approved by the governing regulatory agency. The filed
rate doctrine is a judicially created doctrine that bars
plaintiffs from suing based on allegedly unreasonable rates
if those rates were agency-approved. See McCarthy Fin.,
Inc. v. Premera, 347 P.3d 872, 875 (Wash. 2015). The filed
rate doctrine “provides, in essence, that any ‘filed rate’—a
rate filed with and approved by the governing regulatory
agency—is per se reasonable and cannot be the subject of
legal action against the private entity that filed it.” Id.(quoting Tenore v. AT&T Wireless Servs., 962 P.2d 104, 108
(Wash. 1998)).
4 ALPERT V. NATIONSTAR MORTGAGE
Although it is clear that under Washington law the filed
rate doctrine applies to regulated entities and their
customers, see id., it is less clear whether the filed rate
doctrine extends to situations in which an intermediary (not
the regulated entity) charges the filed rate to its customers,
thus barring those customers from asserting legal claims that
they were overcharged because the intermediary paid less
than the filed rate.
I.
Before addressing the certified questions, we summarize
the relevant facts. Spencer Alpert, a homeowner in
Washington State, was required by his mortgage agreement
to maintain a hazard insurance policy on his property. When
Alpert’s insurance policy lapsed, Nationstar Mortgage LLC,
his mortgage loan servicer, purchased hazard insurance for
the property and charged Alpert for it at a rate approved by
the Washington State Office of Insurance Commissioner
(“OIC”). Mortgage documents authorized Nationstar to
purchase insurance and charge Alpert for it.
Alpert alleges that the insurance price he was charged,
while accurately reflecting the rate approved by state
regulators, did not represent Nationstar’s true cost of the
insurance. He asserts that Nationstar has an arrangement
with the insurance companies through which Nationstar
receives kickbacks in the form of commissions, such that the
real cost of the insurance policy to Nationstar was
substantially less than what Alpert was charged. Alpert
argues that Nationstar’s recovery of amounts through
kickbacks or commissions is a breach of the mortgage
contract and that this practice violates Washington consumer
protection laws.
ALPERT V. NATIONSTAR MORTGAGE 5
Nationstar and Harwood Service Company (the wholly
owned Nationstar subsidiary that received these
“commissions”) contend that the filed rate doctrine bars
Alpert from suing based on an allegedly unreasonable rate if
that rate is approved by the governing regulating agency,
regardless of the fact that the filed rate was charged to Alpert
by an intermediary (Nationstar) and not charged by an
insurance company or some other entity regulated by the
Washington State OIC.
Accordingly, we are faced with the issue of whether,
under Washington law, the filed rate doctrine applies to
situations in which the filed rate is charged by an
intermediary and not the regulated entity that filed the rate.
Washington law has not addressed this issue.
II.
Because this critical question of state law is not settled,
we have concluded that the appropriate course of action is to
certify questions regarding this issue to the Washington State
Supreme Court, and we respectfully request that it provide
the answer. 1 See Lehman Bros. v. Schein, 416 U.S. 386, 391
(1974) (noting that federal certification of state law
questions “helps build a cooperative judicial federalism,”
and is “particularly appropriate” for novel or unsettled
1
While no party filed a motion requesting certification of questions,
we have the authority to certify questions sua sponte. See Parents
Involved in Cmty. Sch. v. Seattle Sch. Dist., 294 F.3d 1085, 1086 (9th
Cir. 2002) (“[W]e have an obligation to consider whether novel state-
law questions should be certified—and we have been admonished in the
past for failing to do so.” (citation omitted)); Wash. Rev. Code
§ 2.60.030(1) (“Certificate procedure may be invoked by a federal court
upon its own motion . . . .”).
6 ALPERT V. NATIONSTAR MORTGAGE
questions of state law). Resolution of the certified questions
is necessary to our decision.
III.
We respectfully certify to the Washington State Supreme
Court the following questions:
1. Should the filed rate doctrine apply to
claims by a Washington homeowner
against a loan servicer arising from the
placement of lender placed insurance on
the Washington homeowner’s property
where the servicer purchased the
insurance from a separate insurance
company who filed the insurance product
with the Washington State Office of the
Insurance Commissioner?
2. In the event the filed rate doctrine does
apply to this type of transaction, do the
damages requested by Plaintiff fall
outside the scope of the filed rate
doctrine, or rather do they “directly attack
agency-approved rates,” such that they
are barred under McCarthy Finance, Inc.
v. Premera, 347 P.3d 872, 875 (Wash.
2015)?
We do not intend our framing of these questions to
restrict the Washington State Supreme Court's consideration
of any issues that it determines are relevant. The
Washington State Supreme Court may, in its discretion,
reformulate the questions. See Broad v. Mannesmann
Anlagenbau AG, 196 F.3d 1075, 1076 (9th Cir. 1999).
ALPERT V. NATIONSTAR MORTGAGE 7
If the Washington State Supreme Court accepts review
of the certified questions, we designate Alpert as the party to
file the first brief pursuant to Washington Rule of Appellate
Procedure (“WRAP”) 16.16(e)(1). If the Washington State
Supreme Court accepts review and issues a decision, we will
then decide this case in accord with its decision on the
certified questions.
IV.
The clerk of our court is hereby ordered to transmit
forthwith to the Washington State Supreme Court, under
official seal of the United States Court of Appeals for the
Ninth Circuit, a copy of this order and all relevant briefs and
excerpts of record pursuant to Washington Revised Code
Sections 2.60.010 through 2.60.030 and WRAP 16.16. The
record contains all matters in the pending case deemed
material for consideration of the local law questions certified
for answer.
Further proceedings in our court are stayed pending the
Washington State Supreme Court’s decision whether it will
accept review, and if so, receipt of the answer to the certified
questions. Submission is deferred in this case, and the clerk
is directed to close this docket administratively, pending
further order from this court.
When the Washington State Supreme Court decides
whether to accept the certified questions (or orders briefing
on the questions), the parties shall file a joint report
informing us of the decision. The parties shall also file a
joint status report notifying us when briefing has been
completed, and when a date is set for oral argument before
the Washington State Supreme Court. The parties shall file
a joint status report every six months after the date that the
Washington State Supreme Court accepts the certified
8 ALPERT V. NATIONSTAR MORTGAGE
questions (or orders briefing thereon), or more frequently if
circumstances warrant.
QUESTIONS CERTIFIED and SUBMISSION
DEFERRED.