They were against it before they were for it: Fladell (Part 3 of 3)

December 19, 2014

Insurance LawThe settlement approved by the Federal Court in Fladell explicitly included absent class members’ claims and potential claims involving things like “alleged ‘backdating,’ or alleged excessiveness of any Lender-Placed Insurance Policies”.  Fladell v. Wells Fargo Bank, N.A., 2014 WL 5488167 *7 (S.D. Fla. October 29, 2014).  However, that is not what the Fladell defendants said the previous December:

It also appears that Plaintiffs have abandoned all claims insofar as they seek relief for alleged “backdating,” [or] “excess insurance” ….

DE 108 at page 18 n.19

Class counsel, like class representatives, are required in any class action to be persons who fairly and adequately represent the interests of the class in the given class action.   This is required by Federal Rule 23.  Most of the plaintiffs’ attorneys listed in the Fladell case, however, are from Florida.  One law firm is from Little Rock, Arkansas, and another firm is from Marietta, Georgia.

Nothing in the record reveals how these absolutely capable and admittedly experienced counsel are persons who fairly and adequately represent the interests of class members who might be residents and citizens of California, Utah, or Washington State – or of any other State in which the Fladell settlement is raised to preclude LFPI claims.

Parenthetically, at least one set of defendants’ similarly capable and experienced lawyers are listed as being from San Francisco, California.

Moreover, as the Fladell defendants pointed out in their opposition to class certification, the Judicial Panel on Multidistrict Litigation refused to “centralize” LFPI cases against Wells Fargo in one lawsuit, including but not limited to Fladell, “because,” as the defendants said in Fladell, …

… the cases “involve different originating lenders, mortgage agreements with materially different terms concerning force-placed insurance, and differing disclosures to borrowers at the time the force-placed insurance policies were placed” ….  In re Wells Fargo Bank, N.A., Mortg. Corp. Force-Placed Hazard Ins. Litig., 2013 WL 4041553, *2 (J.P.M.L. Aug. 7, 2013).

DE 108 at page 3 n.4.   The defendants have now changed their mind and disagree with the Judicial Panel on Multidistrict Litigation.  More to the point, they began disagreeing with the Panel when they switched their litigation positions.

When the defendants switched their litigation positions, they asked the District Court in Fladell to approve their settlement agreement and to grant it preclusive, res judicata effect over every other LFPI claim pending or which might in the future be filed against them in every other case in the nation.

Before concluding, it is worth considering that the Fladell Order Granting Final Approval to Class Action Settlement entered on October 29, 2014, for which the defendants claim res judicata effect, was written by the defendants.

It is the same in all material textual respects as their settlement agreement.  The District Judge did not change the wording when he signed it as an apparent Order of the Court.  (The Fladell defendants filed their settlement agreement at least two times, once when they requested preliminary Court approval of it, and once again when they requested final Court approval of it.

So, once again, a question like the question which was previously asked toward the beginning of this article must be asked here at the conclusion:

 Can a party purchase the right to raise res judicata in other cases by settling an alleged class action for more claims and more classes than the plaintiffs in that case pursued, where the same party thereafter obtained a Court’s approval of that class action settlement, and  where that same party previously objected to certifying claims and classes in opposition to the plaintiffs’ motion for certification in that case, a motion and opposition which were never adjudicated by the Court because the defendants settled before the Court ruled on the pending motion and opposition?