insurance rates are set pursuant to a statutory scheme under Pennsylvania law. Once set, the rates
have the force of law. When the law is not followed, mischief or even participation in a scheme to
defraud may be close behind. The issuance of the HUD-1 is merely a step in the scheme to defraud,
the full parameters of which Plaintiffs should be permitted to pursue in discovery because they have
advanced sufficient facts in the Amended Complaint to satisfy the Iqbal standard at the Motion to
ii. Defendant Owed Plaintiffs a Duty to Disclose.
Defendant argues that Commonwealth Land had no fiduciary duty to disclose the alleged
entitlement to the discounted rate or to inform Plaintiffs of the non-disclosure because Defendant
had no duty to speak, citing Contawe v. Crescent Heights of Am. Inc., No. 04-2304, 2004 WL
2244538, *5 (E.D. Pa. Oct. 1, 2004) (“Pennsylvania does not, absent special or unusual facts,
recognize a fiduciary relationship between a title insurance agent and a purchaser of real estate.”).12
Defendant also asserts that Plaintiffs are presumed to know the true applicable rates because the
TIRBOP manual is a public document available to anyone for inspection.
The duty to disclose arises from the August 2005 Amendment to the TIRBOP Manual
because it places the burden on the title insurer or its agent to conduct a title search on the property,
12Plaintiffs allege that a fiduciary relationship exists between the insured and the title agent due to the dual roles of the title agent at settlement. A fiduciary relationship arises under Pennsylvania law where “‘one person has reposed a special confidence in another to the extent that the parties do not deal with each other on equal terms, either because of an overmastering dominance on one side, or weakness, dependence or justifiable trust, on the other.’” Becker v. Chicago Title Ins. Co., No. 03-2292, 2004 WL 228672, *8 (E.D. Pa. Feb. 4, 2004) (internal quotations omitted). Regardless of whether or not a fiduciary relationship existed with the title agent or title company, the absence of a fiduciary relationship does not create a license to participate in a scheme to defraud a party who is downstream in the chain of a business transaction.