United States District Court, W.D. Kentucky, Louisville
CHARLES R. SIMPSON III, SENIOR JUDGE
matter is before the court on plaintiff Consumer Financial
Protection Bureau's (hereinafter “the
Bureau”) motion for reconsideration of the court's
July 13, 2017 order granting defendants' motion for
summary judgment and denying plaintiff's motion for
partial summary judgment. ECF No. 161. Defendants Borders
& Borders, PLC, Harry Borders, John Borders, Jr., and J.
David Borders (collectively “Borders &
Borders”) responded. ECF No. 164. The Bureau
subsequently replied. ECF No. 165. For the reasons stated
below, the court will deny the Bureau's motion for
& Borders is a law firm in Louisville, Kentucky that
specializes in real estate law. ECF No. 128-3, p. 1. The law
firm was founded in 1971 by J. David Borders. Id.
His sons, David Borders, Jr. and Harry Borders, later joined
him in practice. Id. at 2. Borders & Borders
“has handled tens of thousands of Kentucky real estate
closings, ” and is also “an authorized agent to
issue title insurance policies in Kentucky.”
Id. at 1.
2006, Borders & Borders established nine joint ventures
with various real estate agents and mortgage brokers in the
Louisville market. Id. at 10. These joint ventures
were title insurance agencies (hereinafter “Title
LLCs”) that could write policies for mortgage lenders
and consumers. Id. Fifty percent of each Title LLC
was owned by Borders & Borders, and the other fifty
percent was owned by a corresponding joint venture partner or
partners (hereinafter “JVPs”). Id.
lenders typically require consumers to purchase a
lender's title insurance policy to protect it against any
title defects. ECF No. 129-30, p. 1. Although many mortgage
lenders in the Louisville market have their own affiliated
title insurance agencies, some do not. ECF No. 128-3, p. 10.
When Borders & Borders served as the closing attorney for
a real estate transaction where there was no captive lender
agency involved, the law firm would refer the consumer to one
of its Title LLCs for the provision of title insurance. ECF
No. 129-36, p. 2. The particular Title LLC to which the
consumer was referred depended on which JVP had served as the
real estate agent or mortgage broker in the real estate
transaction. Id. Borders & Borders provided each
consumer with a disclosure statement at the time of referral,
indicating that the Title LLC was jointly owned by Borders
& Borders and the JVP and providing its standard rates.
ECF No. 128-3, p. 16. The consumer then had thirty days from
the closing to choose whether to purchase title insurance
from the Title LLC or from another vendor. Id. From
2009 to 2011, the Title LLCs issued over 1, 000 title
insurance policies relating to over 700 real estate closings.
February 23, 2011, the Housing and Urban Development Office
(“HUD”) sent Borders & Borders a letter
stating that they had initiated a Real Estate Settlement
Practices Act (RESPA) investigation of the law firm's
title insurance referrals. Id. at 19. HUD issued a
Request for Information and Documents, to which Borders &
Borders responded. Id., ECF No. 129-5. Then, on
April 25, 2012, HUD advised Borders & Borders that the
investigation would be transferred to the Bureau, and
requested additional information and documents. ECF No.
128-3, p. 20.
October 24, 2013, the Bureau filed suit against Borders &
Borders, alleging that Borders & Borders arranged for the
Title LLCs to pay distributions to the JVPs in exchange for
closing services referrals in violation of section 8(a) of
RESPA. 12 U.S.C. § 2607(a). ECF No. 1, ¶¶
28-30. Both parties filed motions for summary judgment. ECF
Nos. 128, 129. This court granted Borders & Borders'
motion for summary judgment, and denied the Bureau's
motion for partial summary judgment. ECF No. 158. The Bureau
now moves this court to reconsider its decision. ECF No. 161.
Federal Rule of Civil Procedure 59(e), a party may move to
alter or amend a judgment within twenty-eight days of its
entry. Rule 59(e) motions allow district courts to correct
their own errors, “sparing the parties and appellate
courts the burden of unnecessary appellate
proceedings.” Howard v. United States, 533
F.3d 472, 475 (6th Cir. 2008). Granting a Rule 59(e) motion
is appropriate when there is: “(1) a clear error of
law; (2) newly discovered evidence; (3) an intervening change
in controlling law; or (4) a need to prevent manifest
injustice.” Schlaud v. Snyder, 785 F.3d 1119,
1124 (6th Cir. 2015) (citation omitted).
Bureau asks this court to reconsider its ruling granting
Borders & Borders' motion for summary judgment and
denying the Bureau's motion for partial summary judgment.
A trial court shall grant summary judgment in a case
“if the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed.R.Civ.P. 56(a). The
party moving for summary judgment bears the initial burden of
“demonstrating that [there is] no genuine issue of
material fact.” Celotex Corp. v. Catrett, 477
U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If the
moving party satisfies this burden, the burden then shifts to
the nonmoving party to “point to evidence demonstrating
that there is a genuine issue of material fact for
trial.” Id. at 323 (emphasis added).
considering a motion for summary judgment, the court must
consider the facts in the light most favorable to the
nonmoving party. Scott v. Harris, 550 U.S. 372, 378,
127 S.Ct. 1769, 167 L.Ed.2d 686 (2007). However, the
nonmoving party “must do more than simply show that
there is some metaphysical doubt as to the material
facts.” Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538
(1986). There must actually be “evidence on which the