Court Opinion

ID: 7803418
Source: CourtListenerOpinion
Date Created: 2022-08-24 23:01:33.829063+00
Date Added: 2024-06-11T16:29:38.294578
License: Public Domain

Filed 8/24/22 Sjobring v. First Am. Title Ins. Co. CA2/3

  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
not certified for publication or ordered published, except as specified by rule 8.1115(a). This opinion has
not been certified for publication or ordered published for purposes of rule 8.1115(a).

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                        SECOND APPELLATE DISTRICT

                                     DIVISION THREE

JEFFREY ALBERT SJOBRING et                                      B293732
al.,
                                                                Los Angeles County
      Plaintiffs and Appellants,                                Super. Ct. Nos. JCCP4751,
                                                                BC382826, BC329482
      v.

FIRST AMERICAN TITLE
INSURANCE COMPANY et al.,

      Defendants and Respondents.

     APPEALS from judgments of the Superior Court of Los
Angeles County, Maren E. Nelson, Judge. Reversed.
     The Bernheim Law Firm, Steven J. Bernheim, Nazo S.
Semerjian; Shernoff Bidart Echeverria, Michael J. Bidart, Steven
M. Schuetze; Friedman Rubin, Richard H. Friedman; The Kick
Law Firm and Taras Kick for Plaintiffs and Appellants.
     Dentons US, Ronald D. Kent, Joel D. Siegel, Susan M.
Walker, Paul M. Kakuske for Defendants and Respondents.
                          INTRODUCTION

       The Insurance Code requires title insurers and title
companies to file a schedule of their rates with the Insurance
Commissioner before charging those rates to the public. (Ins.
Code, §§ 12401.1, 12401.7, 12414.27.)1 The Insurance Code also
prohibits title insurers and title companies from charging rates
for policies and services except in accordance with their filed
rates. (§ 12414.27.)
       These consolidated appeals concern two class action
lawsuits brought against defendants and respondents First
American Title Insurance Company and First American Title
Company (collectively, defendants). One lawsuit was filed by
plaintiff and appellant Jeffrey Albert Sjobring. The other lawsuit
was filed by plaintiff and appellant Wendy Kaufman. We refer to
Sjobring and Kaufman collectively as plaintiffs. Both plaintiffs
obtained policies from defendants to insure the title on a recently
purchased home: an owner’s policy to cover their own interest in
the title, and a loan policy to cover the mortgage-lender’s interest.
Because title insurance policies like these insure the same
property, they are usually less expensive when purchased
together. How much less expensive depends on the range of
defects they insure against—that is, whether the policies are
classified as “standard coverage” or “extended coverage.”
       Plaintiffs allege they were overcharged for their title
insurance policies. Specifically, Sjobring asserts that defendants’
filed rate for an extended coverage loan policy when sold together
with an extended coverage owner’s policy was $125, not the $563

1   Undesignated statutory references are to the Insurance Code.

                                    2
that he was charged. Alternatively, Sjobring asserts that even if
his policy is considered a standard coverage policy, he should
have been charged defendants’ filed rate of $290. For her part,
Kaufman alleges that under defendants’ filed rates, there was no
charge for a loan policy that was sold concurrently with a
standard coverage owner’s policy. Thus, Kaufman should have
only paid $125, not the $710 that she was charged.
       The trial court granted defendants’ motions for judgment
on the pleadings and dismissed both lawsuits. It concluded that
plaintiffs’ allegations amounted to an improper challenge to the
“use” of a rate and implicates “ratemaking.” Accordingly,
defendants were shielded from liability under section 12414.26,
which bars suits under noninsurance laws for any “act done,
action taken, or agreement made pursuant to the authority
conferred” by the rate-filing statutes. (§ 12414.26.)
       On appeal, plaintiffs contend their claims are not barred by
section 12414.26 because the lawsuits do not challenge
defendants’ ratemaking. Nor do they challenge the amount of any
filed rate or coverage classification. Instead, the issue is whether
defendants unlawfully collected more than the filed rates.
Accordingly, whether plaintiffs’ policies are standard or extended
coverage policies is not a question about rate setting. It is a
question about the nature of the policies, which in turn
determines what plaintiffs should have been charged. This is a
question of fact. And because the answer to that question is not
clear from the face of the pleadings and judicially noticed
documents, it cannot be resolved in a motion for judgment on the
pleadings.
       In a recent opinion, the California Supreme Court held that
“[t]he statutory immunity for ‘act[s] done … pursuant to the

                                 3
authority conferred’ ([§] 12414.26) by the rate-filing statutes does
not shield title insurers from suit for charging unauthorized
rates, and the Insurance Commissioner does not have exclusive
jurisdiction over such claims.” (Villanueva v. Fidelity National
Title Co. (2021) 11 Cal.5th 104, 110–111 (Villanueva).) In
conformity with Villanueva, we conclude that plaintiffs do not
challenge defendants’ filed rates or coverage classifications and,
therefore, section 12414.26 does not shield them from suit for
charging unauthorized rates for their title policies. We reverse
the judgments and remand for further proceedings.

                PROCEDURAL BACKGROUND

1.    Certified Classes and the Operative Pleading in the
      Sjobring Lawsuit
       Sjobring filed his operative fourth amended class action
complaint in Los Angeles Superior Court case No. BC329482 on
November 15, 2010.
       The court certified two classes for the fraud, negligent
misrepresentation, and unfair competition claims. As to class
one,2 the court certified the following class: “All persons who paid
all or part of the premium in a transaction occurring from
January 1, 2003 through October 8, 2006, in which the premium
paid was more than $125 for any First American concurrent loan
policy issued with an Eagle Owner’s Policy issued without
regional exceptions insuring property in California, where the
aggregate liability of the loan policies issued did not exceed the
aggregate liability of the owner’s policy.” The court found a

2 The class certified as class one was labeled class two in Sjobring’s
fourth amended complaint.

                                    4
common question existed as to “whether the Eagle Owner’s Policy
is an extended or standard coverage policy.”
       As to class two,3 the court certified the following class: “All
persons who paid all or part of the premium in a transaction
occurring from January 1, 2003 through October 8, 2007, in
which the premium paid was more than 20 percent of ‘Base Rate
A’ for a First American first concurrent loan policy insuring
property in California, where the aggregate liability under the
loan policies did not exceed the liability under the owner’s policy,
excepting those persons who are members of any class that may
be certified in Kaufman … . Class Two may only seek to claim
that the rate applied to the lender’s policy, as issued, was
improper and should have been charged at the lower C-5 rate.”
2.    Certified Class and the Operative Pleading in the
      Kaufman Lawsuit
      Kaufman filed her operative second amended class action
complaint in Los Angeles Superior Court case No. BC382826 on
November 15, 2010. After demurrer, five causes of action
remained: breach of contract (first cause of action), breach of
implied covenant of good faith and fair dealing (second cause of
action), fraud and deceit (fourth cause of action), unjust
enrichment/restitution (fifth cause of action), and violation of the
Unfair Competition Law (seventh cause of action).
      In their amended answer, defendants raised an affirmative
defense of immunity under section 12414.26, in which they
alleged that the challenged rates and acts were known to,
accepted, and approved by the Department of Insurance. They

3 The class certified as class two was labeled class three in Sjobring’s
fourth amended complaint.

                                    5
also asserted that a scrivener’s error or mistake occurred when
the rates were filed. According to defendants, the rate Kaufman
claimed would allow her and the certified class to obtain the
policies for free, a rate they asserted is inadequate.
       In September 2017, a class was certified for the causes of
action for breach of contract, breach of implied covenant of good
faith and fair dealing, and violation of the Unfair Competition
Law as to: “All persons who paid for a first Eagle loan title policy
in a residential real estate sales transaction in California that
was issued concurrently with an owner’s policy during the period
October 2, 2006 to October 2, 2007, where the aggregate liability
of the loan policies did not exceed the liability of the owner’s
policy.”
       The trial court found the following common questions
existed:
      ◦   Did defendants apply the rate correctly for first
          concurrent Eagle Loan policyholders during the
          class period?
      ◦   Were defendants permitted to charge an
          additional premium for a first concurrent Eagle
          Loan policy during the class period, contrary to
          defendants’ filed rate with the California
          Department of Insurance (CDI)?
      ◦   Did defendants violate section 12414.27 by
          charging a rate that was not filed with the CDI?
      ◦   Was there a scrivener’s error in the filed rate by
          defendants, and if so, what effect, if any, does it
          have on defendants’ liability under the Insurance
          Code?

                                 6
3.    Motions for Judgment on the Pleadings and
      Judicially-Noticed Documents
      Defendants moved for judgment on the pleadings in both
cases. They argued that section 12414.26 precluded the actions as
framed by the pleadings and the class certification motions. As to
Kaufman, defendants also argued that the “no charge” rate she
identified was the result of a scrivener’s error.
      Defendants filed requests and supplemental requests for
judicial notice in support of their motion. The court granted the
requests in part and took judicial notice of the following
documents:
      ◦   statement of decision in Kirk v. First American
          Title Co., Los Angeles Superior Court case
          No. BC372797;
      ◦   unpublished appellate opinion in Kirk v. First
          American Title Company (June 22, 2016,
          B257508) [nonpub. opn.]);
      ◦   Sjobring’s administrative complaint filed with the
          Department of Insurance on November 16, 2012,
          which includes, as an exhibit, the schedule of fees
          on file when Sjobring’s policies were purchased;
      ◦   the existence of defendants’ correspondence with
          the Department of Insurance amending its fee
          schedule, but not the truth of the matters therein;
      ◦   Plaintiffs’ motions for class certification,
          including the legal positions and concessions
          made by Sjobring and Kaufman to secure class
          certification;

                                 7
      ◦   the court’s orders granting class certification.
The court declined to take judicial notice of the remaining
exhibits, ruling they were irrelevant to the issues presented by
the motion.
      The court granted Kaufman’s request to take judicial notice
in part and took judicial notice of certain legislative history of
section 12414.26 and deposition testimony. The court also
granted Sjobring’s request for judicial notice in part and took
judicial notice of the following documents:
      ◦   The demurrer to Sjobring’s Fourth Amended
          Complaint, filed November 24, 2010;
      ◦   Order overruling in part and sustaining in part
          the demurrer to Sjobring’s Fourth Amended
          Complaint, filed February 1, 2011;
      ◦   Defendants’ response to Sjobring’s complaint to
          the Insurance Commissioner, filed on
          December 21, 2012.
The court declined to take judicial notice of the remaining
exhibits, ruling they were irrelevant to the disposition of the
motion and thus moot.
       Finally, the court took judicial notice that it had granted
certification of two classes in Sjobring and one class in Kaufman.
And, on its own motion, the court took judicial notice of the fact
that in Kaufman plaintiffs sought to exclude evidence and
argument offered to show that the Insurance Commissioner
“authorized, ratified, approved or permitted the charges at issue.”
Nevertheless, the court explicitly noted that it “express[ed] no
view as to whether the facts support [defendants’] defense.”

                                  8
       The court granted defendants’ motions for judgment on the
pleadings. It concluded that “the gravamen of [p]laintiffs’ theory
in both cases is that the rates were improperly used as to the
policies at issue. This amounts to a challenge to the ‘use’ of a rate
and implicates ‘ratemaking,’ a function that, under the statutory
scheme, falls initially to the CDI.”
       The court explained: “Plaintiffs do not contend that
[defendants] charged a rate that was not filed and became
effective. Instead, they contend that a different rate should have
been charged. [¶] The Court recognizes that there is no published
case directly on point as to whether a party alleging rate
ambiguity may bring a direct action or must challenge the rate
under Article 6.5. It is also recognized that there is a factual
dispute between the parties as to whether [defendants] in fact
charged a rate they filed with respect to the policies at issue.
However, resolution of that factual issue requires the Court to
interpret the policies and the rates. Under the statutory scheme
this is the exclusive function of the CDI in the first instance,
subject to review by the Court.”
       In particular, as to Sjobring, the court explained “in
asserting that [defendants] used the wrong filed rate and asking
the Court to determine that his rate is the correct one, Sjobring
asks the Court to determine the proper ‘use’ of a rate and to
engage in rate regulation. This is the function of the CDI, at least
initially.”
       As to Kaufman: “In making these determinations the Court
is called upon to determine whether the policy sold to Kaufman
was a ‘Standard’ or ‘Extended’ policy and to determine what
effect, if any, the claimed scrivener’s error has on the proper rate
to be charged, including whether the rate as posted would be

                                  9
considered inadequate under section 12401.3 and Article 5.5.
[Fn. omitted.] Put another way, the parties each ask the Court to
determine that her/their position as to the effect of the claimed
scrivener’s error is correct. [¶] In addition, … [Kaufman] alleges
that alternatively, there was another less-expensive pricing
structure that could have been applied. [Citation.] In either
event, Kaufman’s claims implicate the ‘making and use’ of a rate
under Section 12401.3.”
      In conclusion, the court held: “Sjobring and Kaufman as
now understood challenge the use of a filed rate and require the
Court to engage in rate setting, rate regulation, and a
determination of the proper ‘use’ of rates. As the Court
understands the statutory scheme and the case law[,] a civil
action on this basis is precluded prior to an action brought under
Section 6.5 of the Insurance Code.”
      The court entered judgments of dismissal from which
plaintiffs filed timely notices of appeal.

                        CONTENTIONS

       Plaintiffs contend that immunity under section 12414.26 is
limited to conduct authorized by articles 5.5 and 5.7 of the
Insurance Code. Those articles do not authorize title insurers to
charge more than their filed rates. To the contrary, such conduct
is expressly prohibited by section 12414.27. Whether defendants
charged more than the filed rates depends, in turn, on whether
plaintiffs’ policies provided standard or extended coverage and
courts routinely interpret insurance policies. Because those
classifications are not clear from the face of the pleadings and
judicially noticed documents, it is a question of fact that cannot
be resolved by motions for judgment on the pleadings. Plaintiffs
also contend that administrative proceedings before the

                                10
Insurance Commissioner are not a consumer’s exclusive remedy
for the charging of an unauthorized rate.
       Defendants contend they are immune from suit under
section 12414.26 because the lawsuits challenge acts done
pursuant to authority conferred by article 5.5—namely, rate
setting and the classification of title insurance policies. And
Villanueva doesn’t assist plaintiffs because that case dealt with a
title insurer that charged rates without filing them with the
Insurance Commissioner. Defendants also argue that article 6.7’s
administrative process is the sole remedy for claims that fall
within section 12414.26’s immunity provision.

                          DISCUSSION

1.    Standard of Review
       “ ‘The standard of review for a motion for judgment on the
pleadings is the same as that for a general demurrer: We treat
the pleadings as admitting all of the material facts properly
pleaded, but not any contentions, deductions or conclusions of
fact or law contained therein. ... We review the complaint de novo
to determine whether it alleges facts sufficient to state a cause of
action under any theory. [Citation.]’ [Citation.]” (Burd v. Barkley
Court Reporters, Inc. (2017) 17 Cal.App.5th 1037, 1042.) We will
not, however, credit the allegations in the complaint where they
are contradicted by facts that either are subject to judicial notice
or are evident from exhibits attached to the pleading. (Hill v. Roll
Internat. Corp. (2011) 195 Cal.App.4th 1295, 1300.) We review de
novo whether a cause of action has been stated as a matter of
law. (Moore v. Regents of University of California (1990) 51 Cal.3d
120, 125.) We do not review the validity of the trial court’s

                                11
reasoning, however, and will affirm its ruling if it was correct on
any theory. (Hill, at p. 1300.)
      The scope of the immunity provision in section 12414.26 is
a matter of statutory interpretation that we consider de novo.
(See People v. Prunty (2015) 62 Cal.4th 59, 71.) As with any case
involving statutory interpretation, our primary goal is to
ascertain and effectuate the lawmakers’ intent. (Villanueva,
supra, 11 Cal.5th at p. 114.) To determine intent, we first
examine the statutory language and give the words their
ordinary meaning. (Ibid.) If the statutory language is
unambiguous, its plain meaning controls. (Mays v. City of Los
Angeles (2008) 43 Cal.4th 313, 321.)
2.    Title Insurance Regulation
        A “rate” is “the charge or charges … made to the public by a
title insurer, an underwritten title company or a controlled
escrow company, for all services it performs in transacting the
business of title insurance.” (§ 12340.7.) “The Insurance Code
requires all title insurers to file a schedule of their rates with the
Commissioner. (Ins. Code, § 12401.1.) … Once rates are filed,
regulated entities are required to wait 30 days before using them.
(Ins. Code, §§ 12401.1, 12401.7.) This regulatory approach—
commonly known as ‘file and use’—allows entities to implement
their filed rates without the need for formal prior approval.
[Citations.]” (Villanueva, supra, 11 Cal.5th at p. 113.) Title
insurers may not charge more than their filed rates. (§ 12414.27
[title insurers may only charge “in accordance with rate filings
which have become effective pursuant to Article 5.5”].)
        As relevant here, article 5.5 (§§ 12401–12401.10) “governs
title insurance rate filing and regulation. Among other things,
article 5.5 requires title insurers to ‘establish basic classifications

                                  12
of coverages and services’ as a basis for their rates (Ins. Code,
§ 12401.2; see id., § 12401.3, subd. (d)) and to then file those rates
with the Commissioner (id., § 12401.1). The article forbids rates
that are excessive, inadequate, or discriminatory. (Id., § 12401.3,
subd. (a).) It generally prohibits title insurers from charging
unfiled rates or rates before their effective date, 30 days after
filing. (Id., §§ 12401.1, 12401.7; see id., §§ 12401.71, 12401.8
[specifying exceptions].) In addition, article 5.5 permits insurers
to consult with each other and with industry organizations and
share information and loss experience data (id., § 12401.4), data
that is central to the insurers’ ability to set rates [citation].
Finally, the article permits entities under the same management
to act in concert. (Ins. Code, § 12401.6.)” (Villanueva, supra, 11
Cal.5th at p. 115.) Article 5.7 regulates insurance advisory
organizations, through which “insurers may obtain a much
deeper pool of loss experience data than they would otherwise
have at their disposal.” (Ibid.)
       Section 12414.26, in turn, affords title insurers some level
of immunity from challenges to actions they take under this
scheme. The statute provides: “No act done, action taken, or
agreement made pursuant to the authority conferred by
Article 5.5 (commencing with Section 12401) or Article 5.7
(commencing with Section 12402) of this chapter shall constitute
a violation of or grounds for prosecution or civil proceedings
under any other law of this state heretofore or hereafter enacted
which does not specifically refer to insurance.”
       Recently, in Villanueva, supra, 11 Cal.5th at pp. 117–118,
the California Supreme Court rejected a title company’s
expansive view of its immunity from suit under section 12414.26.
Although Villanueva does not expressly define the scope of

                                 13
section 12414.26 immunity, the opinion makes clear that even at
its broadest, immunity does not extend beyond conduct
authorized by articles 5.5 and 5.7. (Villanueva, at pp. 115–117.)
        In Villanueva, the plaintiff and his wife had refinanced the
mortgage on their home, with Fidelity National Title Company
(Fidelity) providing escrow services. (Villanueva, supra, 11
Cal.5th at p. 111.) For its services, Fidelity charged the couple an
escrow fee, an overnight delivery fee, a courier fee, and a fee for
preparing a new deed. (Ibid.) Villanueva later sued Fidelity,
asserting that the delivery, courier, and draw deed fees were
illegal because they had never been filed with the Insurance
Commissioner. (Ibid.)
        The court granted the motion for class certification, and,
following a bench trial, determined that “Fidelity was required to
file its rates with the Commissioner, that document delivery was
a service for which a rate filing was required, and that Fidelity
had not filed its delivery service rate. The court further
determined that, for the first two years of the class period,
Fidelity had no rate on file for drawing deeds or document
preparation, and thus during that period, the fee for drawing up
a deed was also illegal.” (Villanueva, supra, 11 Cal.5th at p. 111.)
        The court of appeal reversed in part and ordered the trial
court to dismiss the suit. (Villanueva, supra, 11 Cal.5th at
p. 112.) It concluded that the class claims were barred. First,
Fidelity was immune from suit under section 12414.26 because
the statute extends to all “ ‘ “ratemaking-related activities,” ’ a
category that includes the charging of unfiled rates. [Citations.]
Second, the court held that the statutory scheme affords
consumers charged unfiled rates only one avenue of redress: an
administrative complaint submitted to the Commissioner … .”

                                 14
(Villanueva, at p. 112.) The Supreme Court granted review on
both questions.
        The issue, as framed by the Supreme Court, was “whether,
if a title insurer charges rates without filing them, a consumer
can challenge the charges as unlawful in court.” (Villanueva,
supra, 11 Cal.5th at p. 110.) Fidelity argued the answer was no.
(Id. at p. 114.) First, Fidelity claimed section 12414.26 immunizes
ratemaking from civil suit under noninsurance laws. Second, it
argued that under other provisions of the Insurance Code,
unfiled-rate claims are within the exclusive jurisdiction of the
Insurance Commissioner. (Ibid.) Villanueva rejected both
arguments. (Id. at pp. 114–126 [rejecting immunity argument],
126–133 [rejecting jurisdiction argument].)
        As to section 12414.26, Villanueva held that immunity
“does not extend to the charging of unfiled rates because [articles
5.5 and 5.7] confer no such authority; on the contrary, the
referenced articles expressly prohibit the charging of unfiled
rates.” (Villanueva, supra, 11 Cal.5th at p. 117.) Instead,
section 12414.26 is “best understood as an effort to reconcile the
tension between what is explicitly allowed by articles 5.5
(Ins. Code, § 12401 et seq.) and 5.7 (Ins. Code, § 12402 et seq.)
and what is potentially disallowed by other noninsurance
statutes, most prominently the Cartwright Act and other
antitrust acts. It creates a safe harbor for actions authorized by
articles 5.5 and 5.7 and harmonizes title insurance law with
background state laws governing business competition and other
matters. The [legislative] history offers no hint that either
section 12414.26 or its predecessor immunity provisions were
ever thought to categorically immunize all ratemaking activity—
even unauthorized activity—from suit.” (Villanueva, at pp. 121–

                                15
122.) In short, the Supreme Court held that immunity does not
extend beyond activity authorized by articles 5.5 and 5.7.4
       As for the scope of that authorization, Villanueva explains
that article 5.5 “contemplates that title insurers may: (1) charge a
filed rate after its effective date (Ins. Code, §§ 12401.1, 12401.7);
(2) charge a filed rate before its effective date if the new rate
results in a rate reduction (id., § 12401.71, subd. (a)); and (3) for
unusual risks or services, impose surcharges in excess of those
set forth in the rate filing, provided the surcharges are
reasonable and approved in writing in advance (id., § 12401.8).
Setting aside ‘miscellaneous charges’ (id., § 12340.7), the
imposition of any charge that does not fit within these categories
would not be authorized by article 5.5.” (Villanueva, supra, 11
Cal.5th at p. 115.) Thus, in the matter before it, the court
concluded: “The rates charged here, which were never filed with
the Commissioner, do not fall into any of these categories. Far
from being authorized, they are expressly prohibited. (See Ins.
Code, §§ 12401.1, 12401.7, 12414.27.)” (Id. at pp. 115–116.)
3.       Types of Title Insurance
      Title insurance policies fall into two broad types. An
“owner” policy covers the buyer’s interest in real property. A
“loan” or “lender” policy covers a mortgage lender’s interest in the
same property, in the title, and in its lien position.5 The policies

4In light of our holding that section 12414.26 does not shield
defendants from plaintiffs’ claims, we need not and do not decide the
question the Supreme Court left open: whether section 12414.26
immunity is limited to antitrust liability for concerted actions. (See
Villanueva, supra, 11 Cal.5th at pp. 117–123.)
5   We use “loan policy” and “lender policy” interchangeably.

                                    16
are usually issued concurrently when a lender finances part of
the purchase price. Typically, the property buyer pays for a loan
policy to cover the mortgage lender. The owner policy may be
paid for by the buyer, the seller, or both, depending on the terms
of the sale agreement. In general, because it covers the same
property, a lender’s policy is cheaper when bundled with an
owner’s policy—but how much cheaper depends on the type of
coverage.6
       There are two basic forms of title insurance policies
available in California: California Land Title Association (CLTA)
policies and American Land Title Association (ALTA) policies.
The policies are priced based on whether they provide “standard”
or “extended” coverage. Defendants classify all CLTA policies and
some ALTA policies as standard coverage. Other ALTA policies
can be either standard or extended coverage depending on
whether they are issued with regional exceptions (standard) or
without regional exceptions (extended).7
       Defendants also offer a policy called the EAGLE Owner’s
Policy, which is a trade name for the CLTA/ALTA Homeowner’s
Policy. The CLTA/ALTA Homeowner’s Policy, available to
purchasers of owner-occupied family residences of up to four

6 According to Kaufman’s complaint, the owner’s title policy is issued
for the purchase price, and the loan policy for the amount of the loan.
Although the total amount of insurance sold under the two policies
thus exceeds the purchase price, insurance companies are not usually
liable for more than the value of the property, which is typically the
purchase price at the time of the sale. Thus, a concurrent loan policy
whose liability amount does not exceed the amount of the owner’s
policy does not increase the risk for the insurer.
7“Regional exceptions” refers to a subset of exceptions from coverage.
Examples include easements not shown by public records.

                                   17
units, provides simplified policy language and coverage for risks
not included in standard policies. (Croskey et al., Cal. Practice
Guide: Insurance Litigation (The Rutter Group 2021) ¶ 6:2630.)
4.    Title Policies at Issue
       As we discuss below, because the nature of an owner’s
policy—that is, whether it is a standard coverage policy or an
extended coverage policy—determines the price defendants
charged for a concurrently-issued lender’s policy, the
fundamental issue in these class actions is whether certain
owners’ policies issued by defendants were standard or extended
coverage policies. Defendants contend their policy classifications
are intrinsic to their filed rates; filed rates are immune from
challenge under section 12414.26; interpreting the nature of the
policies could result in a challenge to their rates; therefore, their
policy classifications are also immune from challenge. For their
part, plaintiffs argue defendants read the immunity statute too
broadly, and the nature of the policy is a question of fact. They
seek to understand the classifications, not attack them. That is,
plaintiffs argue we may look at the filed rates and see if
defendants complied with them.
      4.1.   Sjobring
      During the Sjobring class period, the cost of an extended
coverage lender’s policy, when purchased with a standard
coverage owner’s policy, was 30 percent of Base Rate A plus $125.
Yet when the same policy was purchased with an extended
coverage owner’s policy, the charge was a flat $125.
      The EAGLE Owner’s Policy was not defined as either
standard or extended coverage in the schedule of fees filed with

                                 18
the Insurance Commissioner.8 But according to Sjobring’s
complaint, it was addressed in a different, dedicated fee summary
provided to the public. The summary defines the EAGLE policy
as: “An expanded title policy for owners and lenders on one-to-
four family residences, including condominiums. It includes
additional protection and is the best overall coverage available
today.” The publication also describes it as “an extended coverage
owner’s policy which includes coverage for certain future
risks … .”
       In 2004, Sjobring purchased a home from Patrick Kirk for
$650,000. Defendants issued an EAGLE Owner’s Policy without
regional exceptions and policy limits of $650,000, paid for by
Kirk. They charged Kirk $1,648, the amount listed in the EAGLE
policy fee summary.9 At the same time, defendants issued a 1992
ALTA Loan Policy without regional exceptions and policy limits
of $441,000, paid for by Sjobring, to cover the mortgage lender.
Defendants’ filed fee schedule classified the ALTA Loan Policy as
an extended coverage policy. They charged Sjobring $563 for this
policy.
       For class one, Sjobring contends that his EAGLE Owner’s
Policy was an extended coverage policy. Because his lender’s
policy also provided extended coverage, he argues he should have
been charged $125 rather than $563. Defendants claim that the
owner’s policy was a standard coverage policy, and as such,

8Nor does the filed fee schedule define the CLTA/ALTA Homeowner’s
Policy as either standard or extended coverage.
9The Kirk transaction is the subject of a different lawsuit. As noted,
the court below took judicial notice of the appellate opinion in that
case, Kirk v. First American Title Company, supra, B257508.

                                   19
Sjobring was charged the correct amount. Because Sjobring was
charged the filed rate, defendants contend they are immune from
suit under section 12414.26.
       For class two, Sjobring contends that if his owner’s policy is
a standard, rather than extended, coverage policy, he was still
overcharged. In that case, he argues, the lender’s policy was not
full extended coverage but partial extended coverage.
       Partial extended coverage takes a standard coverage policy
and removes some, but not all, of the regional exceptions. The
total charge for such a policy depends on which regional
exceptions are deleted, but the maximum charge is 20 percent of
Base Rate A. This is less than the formula for an extended
coverage lender’s policy issued alongside a standard coverage
owner’s policy: 30 percent of Base Rate A + $125. Sjobring alleges
that although the partial-extended-coverage rate appears in the
fee schedule submitted to the Insurance Commissioner, it does
not appear in the fee summaries provided to the public. He also
alleges that this rate was available to him, and, had defendants
applied it, he would have been charged only $290 rather than
$563.
      4.2.   Kaufman
       By the time Kaufman bought her house, defendants had
modified their fee schedule. The rates for extended coverage loan
policies remained the same as for Sjobring: 30 percent of Base
Rate A plus $125 when sold with a standard owner’s policy but a
flat $125 when sold with an extended owner’s policy. But for
standard coverage loan policies sold alongside an owner’s policy
of any type, the filing stated that “there shall be no charge for”
the policy. The fee schedule had also been amended to define

                                 20
standard coverage to include the EAGLE Owner’s Policy and
EAGLE Loan Policy.10
       In December 2006, Kaufman purchased a Simi Valley
home. Defendants issued an EAGLE Owner’s Policy with limits
of $774,000 and an EAGLE Loan Policy with limits of $580,000.
Kaufman paid for both policies: $1,284.25 for the owner’s policy
and $710 for the lender policy.
       Kaufman contends that both policies are defined in the fee
schedule as standard coverage policies. As such, instead of paying
$710 for the lender policy, she should have received it for no
additional charge.
       Alternatively, Kaufman argues that under defendants’ rate
filing, there was a less expensive pricing structure available for
both her owner’s and loan policies, found in Section E of the rate
schedule.11 She contends she should have been charged these
lower rates.
       Defendants assert that Kaufman’s entire case is based on a
scrivener’s error contained in the fee schedule filed in October
2006, in which they erroneously listed the EAGLE Loan Policy as
standard rather than extended coverage. They do not separately
address her alternative contention about Section E.

10 As discussed, when Sjobring bought his house, the fee schedule’s list
of standard and extended policies did not mention EAGLE policies.
11This section of the rate schedule was neither attached to the
complaint nor among the documents judicially noticed by the court
below. According to the Kaufman complaint, the Department of
Insurance does not publish the fee schedules filed by title insurers.

                                   21
5.    Plaintiffs do not challenge acts authorized by
      section 12414.26.
       As discussed, section 12414.26 states: “No act done, action
taken, or agreement made pursuant to the authority conferred by
Article 5.5 (commencing with Section 12401) or Article 5.7
(commencing with Section 12402) of this chapter shall constitute
a violation of or grounds for prosecution or civil proceedings
under any other law of this state heretofore or hereafter enacted
which does not specifically refer to insurance.”
       Villanueva held that to the extent the statute immunizes
conduct other than concerted action, it applies only to activity
authorized by articles 5.5 and 5.7. (Villanueva, supra, 11 Cal.5th
at pp. 115–116.) As relevant here, article 5.5 provides that
insurers may charge a filed rate after its effective date.
(§§ 12401.1, 12401.7; Villanueva, at p. 115.) It does not authorize
insurers to charge more than the filed rate or to charge rates they
have not filed.
       Defendants argue that Villanueva is inapplicable to our
facts because it addressed a situation in which rates for the
charged fees had not been filed at all. For example, in Villanueva,
defendant Fidelity was charging its customers a “delivery service
fee” but did not have a charge called “delivery service fee” on file
with the Insurance Commissioner. (Villanueva, supra, 11 Cal.5th
at p. 111.) Because a title insurer cannot charge a fee before filing
it with the Commissioner, Fidelity’s actions were not authorized
under the statute. And because its actions were unauthorized,
Fidelity was not immune from suit under section 12414.26.
(Villanueva, at pp. 115–116.) Villanueva’s holding, however, was
not limited to situations involving unfiled rates for certain fees—
it broadly and expressly held that section 12414.26’s immunity

                                 22
“does not shield title insurers from suit for charging unauthorized
rates[.]” (Villanueva, at p. 111.) Indeed, the court emphasized
that the legislative history “offers no hint that either section
12414.26 or its predecessor immunity provisions were ever
thought to categorically immunize all ratemaking activity—even
unauthorized activity—from suit.” (Id. at p. 122.)
       Defendants also assert that article 5.5 allows them to set
and file rates, then charge those rates after 30 days. They did so.
As such, defendants argue they are immune from plaintiffs’
challenge to their “making and use of [their] filed rates, including
these coverage classifications (i.e., ‘Standard’ vs. ‘Extended’
coverage title policies) … .” Plaintiffs, they claim, are asking us to
remake their coverage classifications and filed rates by
reinterpreting them.
       Defendants’ argument rests on the premise that they, in
fact, classified plaintiffs’ policies the way defendants claim. First,
as to Sjobring, they contend they classified his owner’s policy as
standard coverage, and he is seeking to reclassify it as extended
coverage. But that is not Sjobring’s argument. He does not assert
that defendants misclassified the policy; he contends that the
policy was always classified as extended coverage, and they
charged him for the wrong thing.
       Second, as to Kaufman, and discussed in more detail below,
defendants assume that her owner’s policy was classified as
extended coverage in the filed rate schedule and contend that
Kaufman wants to reclassify it as a standard policy. But that is
not Kaufman’s argument. Her argument is that the fee schedule
itself—the schedule defendants prepared and filed—classifies the
policy as a standard policy. She seeks only to hold defendants to
their filing.

                                 23
       Further, it is not at all clear from the pleadings and the
judicially noticed documents that defendants classified the
policies the way that they claim. As to Sjobring, the fee schedule
does not state whether the EAGLE Owner’s Policy is either
standard or extended. Nor does it classify the underlying policy—
the CLTA/ALTA Homeowner’s Policy—as either standard or
extended. As such, it is an open question whether defendants
filed a rate for that policy at all—but if they did, it is not clear
what the rate was or was supposed to be. And by the time
Kaufman bought her EAGLE Owner’s Policy under the revised
rate schedule, the filing did mention the policy—but classified it
as a standard policy. Kaufman seeks to hold defendants to that
classification.12
       More importantly, there is a difference between challenging
a filed rate with the Insurance Commissioner and challenging the
amount charged to an individual consumer for a particular policy
by contending that the rate charged to the individual exceeded
the filed rate. These lawsuits do not challenge defendants’ act of
filing any rate with the Commissioner. Nor do they challenge the
amount of any filed rate. Instead, they contend that defendants
unlawfully charged plaintiffs more than the filed rates. And
determining whether the underlying policies are standard or
extended coverage policies does not involve rate setting; the
determination involves questions about the nature of the policies,
which in turn establishes what should have been charged.
       Defendants also suggest that it is irrelevant whether the
amounts they ultimately charged for various policies were for the
amounts listed for those policies in the schedule of fees because

12   We discuss the effect of the claimed scrivener’s error post.

                                      24
only they get to decide whether a policy is a standard or extended
coverage policy. We disagree. Villanueva provided the following
example, which is illustrative here: “Consider, for example, the
case of an insurer that deviates from its filed rates to impose
higher rates for African–Americans seeking title insurance for
home purchases in particular neighborhoods. Such a policy would
surely relate to ratemaking: The insurer effectively has two rate
schedules, one for African–Americans and another for those of
other races. Such a policy would also be clearly illegal—not only
under general antidiscrimination laws like the Unruh Civil
Rights Act [citation] and the California Fair Employment and
Housing Act [citation], but also under article 5.5 itself.
[Citations.]” (Villanueva, supra, 11 Cal.5th at p. 124.) In this
example, the insurer has rates on file but is not actually charging
the filed rates. That conduct is not authorized by the statute.
Thus, the insurer is not immune from suit. Under defendants’
argument, however, the fact that the insurer is not charging the
filed rates would be irrelevant because courts could not even
consider the question.
        We also note that plaintiffs’ claims do not rest on the
premise that defendants violated any statute contained in
article 5.5 or article 5.7. Instead, plaintiffs argue defendants
violated section 12414.27, which prohibits a title insurance
company from charging something other than the rate already on
file.13 Section 12414.27 is found in article 6.9. Because

13Section 12414.27 provides: “no title insurer, underwritten title
company or controlled escrow company shall charge for any title policy
or service in connection with the business of title insurance, except in
accordance with rate filings which have become effective pursuant to

                                   25
section 12414.26 applies only to statutes found in articles 5.5 and
5.7, plaintiffs’ challenge is outside the scope of the immunity
statute. And because section 12414.26 does not shield defendants
from suit for charging unauthorized rates, we need not
distinguish between statutory and common law claims. Our
analysis applies to both.
6.    Whether defendants charged Kaufman the correct rate
      and whether they committed a scrivener’s error are
      disputed factual issues.
       As we explained before, Kaufman purchased an EAGLE
Loan Policy alongside her EAGLE Owner’s Policy. The fee
schedule classified that policy as a standard coverage policy. And,
according to the fee schedule, “there shall be no charge for” a
standard coverage loan policy when purchased with an owner’s
policy of any type. Instead of providing the loan policy at no
additional charge, however, defendants charged Kaufman $710.
Accordingly, defendants did not charge their filed rate for the
policy, and, under Villanueva and section 12414.27, the rate was
unauthorized. Because defendants charged Kaufman an
unauthorized rate, section 12414.26 does not shield defendants
from Kaufman’s lawsuit.
       Defendants’ argument to the contrary—that they in fact
charged Kaufman their filed rate—rests on the premise that the
loan policy was an extended coverage policy, and they committed
a scrivener’s error when they classified the policy as standard
coverage. Neither the complaint nor the judicially noticed facts
establish this premise, however.

Article 5.5 (commencing with Section 12401) of this chapter or as
otherwise authorized by such article … .”

                                  26
       In general, a motion for judgment on the pleadings will
only be granted based on affirmative defenses where the face of
the complaint and matters judicially noticed disclose that the
action is necessarily barred by the defense. (Cf. Stella v. Asset
Management Consultants, Inc. (2017) 8 Cal.App.5th 181, 191
[discussing demurrers].) Defendants have not made that
showing. Indeed, although defendants point to correspondence
with the Department of Insurance purporting to establish the
scrivener’s error—and the court took judicial notice that
correspondence was exchanged on the topic—the court did not
take judicial notice of the truth of the matters in the
correspondence. Thus, the allegations in the pleading and the
judicially noticed matters did not show that there was a
scrivener’s error in the relevant rate filing. And to the extent
defendants suggest that Kaufman has conceded there was a
scrivener’s error, their failure to develop that argument has
forfeited the issue. (See, e.g., Benach v. County of Los Angeles
(2007) 149 Cal.App.4th 836, 852 [failure to develop claim with
reasoned legal argument and supporting authority forfeits the
issue].)
7.    The Insurance Commissioner does not have exclusive
      jurisdiction over this matter.
       Finally, defendants contend that the administrative process
in article 6.7 (§§ 12414.13–12414.19) is the sole remedy for claims
that fall within section 12414.26’s immunity provision. We
disagree. First, as discussed, the claims in this case do not fall
within section 12414.26’s immunity provision—at least not at
this stage of proceedings. Second, Villanueva squarely rejected
this argument. (Villanueva, supra, 11 Cal.5th at pp. 126–133; see
id. at p. 126 [“we agree … that administrative proceedings are

                                27
not a ratepayer’s exclusive remedy for the charging of an unfiled
rate”].)
       As Villanueva explains: “Article 6.7 (Ins. Code,
§§ 12414.13–12414.19) of the chapter covering title insurance
provides for administrative proceedings before the Commissioner
in the event of disputes over charged rates or rating plans or
systems. First, a ‘person aggrieved by any rate charged ... by a
title insurer ... may request such person or entity to review the
manner in which the rate, plan, system, or rule has been applied
with respect to insurance or services afforded him. Such
request ... shall be written.’ (Id., § 12414.13.) If unable to obtain
satisfaction from the insurer, the aggrieved consumer may then
turn to the Commissioner: ‘Any person aggrieved by the action of
any such person or entity in refusing the review requested, or in
failing or refusing to grant all or part of the relief requested, may
file a written complaint and request for hearing with the
commissioner, specifying the grounds relied upon.’ (Ibid.) Under
this provision, a written complaint to the regulated entity is a
necessary prerequisite to a written complaint to the
Commissioner; it is only if the written complaint fails that a
person is ‘aggrieved’ and entitled to seek a hearing with the
Commissioner. (Ibid.) But nothing in either Insurance Code
section 12414.13 or the remainder of article 6.7 suggests that a
complaint to the Commissioner is exclusive of any other remedy
that might be available to the consumer, including remedies
otherwise available in judicial proceedings.” (Villanueva, supra,
11 Cal.5th at p. 127.)
       Villanueva reasoned that comparable statutes “show[ ] that
the Legislature knows how to prescribe exclusivity when it so
intends. The Legislature used no comparable language here. In

                                 28
describing a consumer’s right to file a complaint with the
Commissioner, the Legislature used the permissive ‘may’ rather
than the mandatory ‘shall.’ (See Ins. Code, § 16 [governing
interpretation of the two terms].) And the Legislature included no
other language expressly making proceedings before the
Commissioner the exclusive avenue of recourse. In the absence of
such language, we infer the Legislature did not intend such a
result.” (Villanueva, supra, 11 Cal.5th at p. 128.)
       Furthermore, as in Villanueva, the parties here seek
“restitution on a classwide basis, but … the statutory scheme
grants the Commissioner no power to issue restitution to
aggrieved individual consumers, never mind a class of them. The
only relief the Commissioner can provide is an order prohibiting
the unlawful rate or suspending or revoking the insurer’s license.
[Citations.] To interpret article 6.7 as supplying consumers’ sole
avenue of recourse would leave them unable to obtain restitution
of, or have the insurer disgorge, illegal overcharges. It would, as
the Commissioner argues, undermine the stated overarching goal
of ensuring that insurers do not impose excessive or unfairly
discriminatory rates. (Ins. Code, § 12401.) In some cases where a
violation is too minor to warrant a license suspension, exclusivity
would eliminate any effective deterrent, and in other cases where
a suspension is imposed, the absence of restitution would render
any remedy incomplete. For this reason, the Commissioner in his
briefing urges that ‘private enforcement is an important
complement to the Department[ of Insurance]’s jurisdiction and
consumer protection mission.’ ” (Villanueva, supra, 11 Cal.5th at
p. 129; see id. at pp. 129–133 [rejecting additional arguments].)
       In sum, Villanueva is clear on this point, and we are bound
by its holding.

                                29
                           DISPOSITION

       The judgments are reversed and the matter is remanded
for further proceedings consistent with the views expressed in
this opinion. Plaintiffs and appellants Jeffrey Albert Sjobring and
Wendy Kaufman shall recover their costs on appeal.

 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

                                                LAVIN, Acting P. J.
WE CONCUR:

      EGERTON, J.

      ADAMS, J.*

* Judge of the Los Angeles Superior Court, assigned by the Chief
Justice pursuant to article VI, section 6 of the California Constitution.

                                   30