Sue Hong v. Bank of America, Na

• Court: Court of Appeals for the Ninth Circuit
• Decided: June 22, 2022
• Docket: 21-35742
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUN 22 2022 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

SUE HONG, on behalf of herself and all No. 21-35742 others similarly situated, D.C. No. 2:20-cv-01667-RSM Plaintiff-Appellant,

v. MEMORANDUM*

BANK OF AMERICA, NA, individually and as successor-in-interest; DOES, 1-10,

Defendants-Appellees.

Appeal from the United States District Court for the Western District of Washington Ricardo S. Martinez, Chief District Judge, Presiding

Submitted June 6, 2022** Seattle, Washington

Before: GILMAN,*** IKUTA, and MILLER, Circuit Judges.

Sue Hong financed her purchase of a home in Washington with a loan

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). *** The Honorable Ronald Lee Gilman, United States Circuit Judge for the U.S. Court of Appeals for the Sixth Circuit, sitting by designation. secured by a deed of trust serviced by Bank of America. The deed allows the

lender to “obtain insurance coverage, at Lender’s option and Borrower’s expense,”

if the borrower “fails to maintain any of the [required] coverages,” including

homeowner’s insurance. Hong failed to maintain her own insurance, so Bank of

America purchased lender-placed insurance (LPI) from QBE Insurance Company

and billed Hong for the coverage. Hong brought this action in Washington state

court for damages and injunctive relief under Washington law, alleging that Bank

of America and QBE engaged in a kickback scheme that inflated the rate she was

charged. Bank of America removed the case to federal court under 28 U.S.C.

§§ 1332(d) and 1441. The district court granted Bank of America’s motion to

dismiss, holding that all of Hong’s claims are barred by the filed-rate doctrine. We

have jurisdiction under 28 U.S.C. § 1291, and we affirm.

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.” McCarthy Fin., Inc. v. Premera, 347

P.3d 872, 875 (Wash. 2015) (quoting Tenore v. AT&T Wireless Servs., 962 P.2d

104, 108 (Wash. 1998)). All claims that “run squarely against these rates,”

including claims against an intermediary like Bank of America here, “must be

dismissed.” Alpert v. Nationstar Mortg., LLC, 494 P.3d 419, 420 (Wash. 2021). On

facts almost identical to those here, the Washington Supreme Court held that even

2 if “a rate filer and other intermediaries jointly act to artificially inflate the rate,

allowing suit against any of these parties may still have the effect of directly

attacking the rate and causing courts to ‘reevaluate agency-approved rates.’” Id. at

423 (quoting McCarthy, 347 P.3d at 875).

Under Alpert, Hong’s claims “run squarely against the filed rate” and are

therefore barred. 494 P.3d at 423. QBE filed its LPI rate schedule and calculation

methodology with the Washington Office of the Insurance Commissioner (OIC). In

approving the rate, the OIC determined that, among other things, the rates were not

“excessive, inadequate, or unfairly discriminatory.” Wash. Rev. Code §§

48.19.020, 48.19.040; Alpert, 494 P.3d at 420 (explaining that because state

insurance law requires that “[t]he rates can be neither too high nor too low,”

approved rates “are per se reasonable” (citation omitted)). Hong does not claim

that QBE sold insurance that was not “in accordance with its filing.” See Wash.

Rev. Code § 48.19.040(6). Nor does she dispute that Bank of America charged her

the premium that QBE billed. Rather, she argues that the filed-rate doctrine is

inapplicable because the insurance premiums charged to her did not represent the

“true cost of coverage” because they were inflated by secret kickbacks given to

Bank of America and by the excessive coverage amount selected by QBE. She also

claims that she is not seeking damages associated with unfairly high rates, but

rather seeking damages from Bank of America only for the amount it charged that

3 was attributable to free services (i.e., the fair market value of the free services).

None of those theories changes the fact that she is challenging the OIC’s

determination that the rate is reasonable.

As to the kickback argument, to determine what portion of the OIC-

approved LPI premium represents Bank of America’s alleged secret benefits, the

court would need to determine what a reasonable rate would be—exactly the

inquiry that the doctrine forbids. Alpert, 494 P.3d at 421–23. The same is true for

the excessive-coverage argument. QBE placed the same amount of insurance on

Hong’s property as Hong had purchased herself before she allowed the policy to

lapse. In so doing, QBE followed one of its OIC-approved coverage-selection

methodologies. Thus, any challenge to QBE’s decision to use that methodology

necessarily challenges the filed rate. See id. at 423. Because the court cannot

calculate her damages without determining for itself what is a reasonable cost for

LPI, Hong’s claims are barred by the filed-rate doctrine, and the district court did

not abuse its discretion in dismissing her complaint without leave to amend. See

id.; McCarthy, 347 P.3d at 875.

Finally, Hong forfeited any claim to injunctive relief by failing to pursue it

in the district court. See Walsh v. Nevada Dep’t of Hum. Res., 471 F.3d 1033, 1037

(9th Cir. 2006) (“A plaintiff who makes a claim for injunctive relief in his

complaint, but fails to raise the issue in response to a defendant’s motion to dismiss

4 on the grounds of immunity from money damages, has effectively abandoned his

claim, and cannot raise it on appeal.”).

AFFIRMED.