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You are here: Home / Arbitration / Court Decisions / Contract Interpretation / FEDERAL COURTS TACKLE STATUTE OF LIMITATIONS ISSUES IN RESPA CAPTIVE REINSURANCE CLASS ACTIONS

FEDERAL COURTS TACKLE STATUTE OF LIMITATIONS ISSUES IN RESPA CAPTIVE REINSURANCE CLASS ACTIONS

September 6, 2013 by Carlton Fields

We have reported on several putative class actions brought by purchasers of private mortgage insurance who allege that insurers, lenders, and captive reinsurers unlawfully entered into reinsurance arrangements in violation of the federal Real Estate Settlement Procedures Act (“RESPA”) and other laws. There have been some recent developments in such cases involving RESPA’s one-year statute of limitations.

In Munoz, as we reported in May, a federal magistrate judge in California recommended certification of a class of purchasers of private mortgage insurance whose insurance was included in defendants’ captive reinsurance arrangements. The magistrate judge recently granted a motion to intervene brought by a putative class member who was excluded from the recommended class because her claims were time-barred. The magistrate had not included such persons in the recommended class because their claims were atypical and class plaintiffs, whose claims were not similarly time-barred, had no interest in asserting tolling of the statute of limitations. In the order granting the motion to intervene the parties were instructed to conduct discovery on and brief the issue of whether certification of a tolling subclass is appropriate. Munoz v. PHH Corp., Case No. 1:08-cv-00759 (USDC E.D. Cal. July 29, 2013).

In Menichino, a Pennsylvania federal district court dismissed without prejudice plaintiff’s putative class action complaint alleging RESPA violations premised on alleged kickbacks relating to defendants’ private mortgage insurance and captive reinsurance arrangements. The court held that plaintiff’s complaint was time-barred by RESPA’s one-year statute of limitations and that plaintiff had failed to allege sufficient facts which, taken as true, would have established that RESPA’s limitations period should be tolled. Menichino v. Citibank, N.A., Case No. 12-0058 (USDC W.D. Pa. July 19, 2013).

The court reached the identical conclusion in Manners, a related case, and similarly dismissed the putative class plaintiff’s claims without prejudice. Manners v. Fifth Third Bank, Case No. 12-0442 (USDC W.D. Pa. July 19, 2013).

This post written by Ben Seessel.

See our disclaimer.

Filed Under: Contract Interpretation

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