United States District Court, District of Columbia
Henry L. KLEIN, pro se, and on Behalf of All Others Similarly Situated, Plaintiff,
AMERICAN LAND TITLE ASSOCIATION, et al., Defendants.
[Copyrighted Material Omitted]
Henry L. Klein, New Orleans, LA, pro se.
Christopher A. Cole, Crowell & Moring, LLP, David Blair Killalea, Jennifer A. Sincavage, Manatt, Phelps & Phillips, LLP, David Marion Foster, Fulbright & Jaworski, L.L.P., Matthew T. Eggerding, Locke Lord Bissell & Liddell LLP, Washington, D.C., Kevin J. Arquit, Patrick T. Shilling, Barry R. Ostrager, Simpson, Thacher & Bartlett LLP, James Ian Serota, Greenberg Traurig, David G. Greene, Kevin J. Walsh, Locke Lord LLP, New York, NY, for Defendants.
REGGIE B. WALTON, District Judge.
Plaintiff Henry L. Klein, an attorney proceeding pro se, brings this putative class action against defendants American Land Title Association (" ALTA" ), Fidelity National Financial Group (" Fidelity" ), First American Title Insurance Company (" First American" ), Stewart Title Guaranty Company (" Stewart Title" ), and Old Republic Title Insurance Company (" Old Republic" ), challenging a title insurance policy drafted by ALTA and widely-utilized by title insurers. See Amended Complaint (" Am. Compl." ) ¶¶ 8-14. Currently before the Court is the defendants' motion to dismiss. Upon careful consideration of the parties' submissions, the Court concludes for the following reasons that the defendants' motion must be granted.
The following factual recitation is taken from the amended complaint and the undisputed facts in the record. Klein is a member of Levy Gardens Partners 2007 L.P. (" Levy Gardens" ). Am. Compl. ¶ 12. Levy Gardens owned property in New Orleans, Louisiana (the " Property" ), on which it planned to construct a 100-unit multifamily housing development in the wake of Hurricane Katrina. Id. ¶ 15. To finance the project, Levy Gardens obtained loans from First NBC Bank and the Louisiana Office of Community Development (the " Community Development Office" ). See id. ¶ 8; Defs.' Mem. at 3. Klein is a " guarantor of [the] two loans." Am. Compl. ¶ 8.
In connection with the two loans, on October 7, 2008, Levy Gardens purchased three title insurance policies from Commonwealth Land Title Insurance Company (" Commonwealth" ), a subsidiary of Fidelity National and a non-party to this case.
See id. ¶¶ 8, 12 n. 2. Two of those policies are at issue here: Loan Policy No. L-14-0005193, issued in favor of First NBC Bank, and Loan Policy No. L-14-0005195, issued in favor of the Community Development Office (collectively, the " Lender Policies" ). Id. The Lender Policies are form-policies that were drafted by ALTA and are widely-used by title insurance companies in the United States. See id. ¶¶ 8-9. The policies insured First NBC Bank and the Community Development Office against title defects. See Defs.' Mem., Declaration of Patrick T. Shilling, Exhibit (" Ex." ) 1 (Loan Policy of Title Insurance for Policy Number L14-0005193) and Ex. 2 (Loan Policy of Title Insurance for Policy Number L14-0005195). The policies also included zoning endorsements that, subject to certain conditions, covered losses incurred in the event that the Property was not zoned to permit a multifamily housing development as of October 7, 2008. Am. Compl. ¶ 15.
As it turned out, a zoning ordinance passed in 1985 prohibited multifamily dwellings on the Property. Id. ¶ 17. In subsequent litigation, a Louisiana state court enjoined Levy Gardens from completing the project due to the 1985 zoning ordinance. See Levy Gardens Partners 2007, L.P. v. Commonwealth Land Title Ins. Co., 706 F.3d 622, 627-28 (5th Cir.2013) (outlining the procedural history of the state court litigation). Levy Gardens then sued Commonwealth in Louisiana federal court, seeking reimbursement under its title insurance policy for the losses it incurred as a result of the zoning restriction. See id. at 627-28. The district court held, and the Fifth Circuit affirmed, that although Levy Gardens was entitled to coverage under the insurance policy, Section 8 of the policy limited Levy Gardens' recovery to the diminution in value of the Property attributable to the 1985 zoning ordinance, rather than covering all losses caused by the ordinance (" Section 8 liability limitation" ). Id. at 627-28, 633-34.
Klein instituted this lawsuit on June 26, 2012. The defendants are title insurers (First American, Stewart Title, and Old Republic), a holding company that owns interests in title insurers (Fidelity), and an industry trade group (ALTA). See Defs.' Mem. at 1. Klein brings this action on behalf of himself and " all other similarly-situated guarantors of loans as to which the members of [the title insurance industry] have issued ... ALTA Loan Policies" that include the Section 8 liability limitation. Am. Compl. ¶ 9. His amended complaint consists primarily of excerpts from the Louisiana litigation between Levy Gardens and Commonwealth, and a rambling narrative criticizing the title insurance industry. He does not label his claims or segregate them into separate counts, so it is difficult to discern what causes of action he is asserting. As best as the Court can tell, however, he appears to allege that the defendants conspired to include ...