Baehr v. Creig Northrop Team, P.C.
| Decision Date | 13 March 2020 |
| Docket Number | No. 19-1024,19-1024 |
| Citation | 953 F.3d 244 |
| Parties | Patrick BAEHR; Christine Baehr, Plaintiffs–Appellants, v. The CREIG NORTHROP TEAM, P.C. ; Creighton Edward Northrop, III; Lindell C. Eagan; Lakeview Title Company, Inc., Defendants–Appellees, and Carla Northrop; Long & Foster Real Estate, Inc., Defendants. |
| Court | U.S. Court of Appeals — Fourth Circuit |
ARGUED: Gregory T. Lawrence, CONTI FENN & LAWRENCE LLC, Baltimore, Maryland, for Appellants. Jay Norman Varon, FOLEY & LARDNER LLP, Washington, D.C., for Appellees. ON BRIEF: Michael J. Silvestri, CONTI FENN & LAWRENCE LLC, Baltimore, Maryland, for Appellants. Jennifer M. Keas, FOLEY & LARDNER LLP, Washington, D.C.; Timothy G. Casey, LAW OFFICE OF TIMOTHY G. CASEY, PA, Rockville, Maryland, for Appellees The Creig Northrop Team, P.C. and Creighton E. Northrop, III. Andrew C. White, William N. Sinclair, SILVERMAN THOMPSON SLUTKIN & WHITE LLC, Baltimore, Maryland, for Appellees Lindell C. Eagan and Lakeview Title Company, Inc.
Before GREGORY, Chief Judge, KING, and QUATTLEBAUM, Circuit Judges.
Vacated and remanded for dismissal by published opinion. Judge King wrote the opinion, in which Chief Judge Gregory and Judge Quattlebaum joined.
This appeal arises from a purported kickback scheme orchestrated by the defendants, The Creig Northrop Team, P.C., Creighton Northrop, III (the "Northrop Defendants"), the Lakeview Title Company, Inc., and Lindell Eagan (the "Lakeview Defendants"). Homeowners Christine and Patrick Baehr (the "Baehrs"), as representatives of the putative class of plaintiffs, specify in their operative single-count complaint that the kickback scheme, in which the Lakeview Defendants paid the Northrop Defendants for marketing services that were actually illegal business referrals, deprived them and the other class members of "impartial and fair competition between settlement service[s] providers," in contravention of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2601 et seq . See Baehr v. The Creig Northrop Team, P.C. , No. 1:13-cv-00933, at ¶¶ 23, 41-47 (D. Md. Aug. 15, 2014), ECF No. 89 (the "Operative Complaint").
After conducting discovery, the Northrop and Lakeview Defendants jointly moved for summary judgment, arguing, inter alia, that the Baehrs had not established that they possessed Article III standing to sue. The district court thereafter awarded summary judgment to the defendants on that ground. More specifically, the court reasoned that the Baehrs had not suffered a concrete injury, and thus could not establish the necessary injury-in-fact for standing. See Baehr v. The Creig Northrop Team, P.C. , No. 1:13-cv-00933, slip op. at 21-22 (D. Md. Dec. 7, 2018), ECF No. 244 (the "Summary Judgment Opinion"). Alternatively, the Summary Judgment Opinion barred the Baehrs's claim under RESPA's statute of limitations based on their failure to establish that the claim was equitably tolled. Id. at 29. As explained below, we agree that the Baehrs lack standing to sue. Because a federal court cannot exercise jurisdiction in the absence of standing, we vacate and remand for dismissal of this case. See Steel Co. v. Citizens for a Better Env't , 523 U.S. 83, 94, 102, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998) ().
In July 2008, the Baehrs purchased a home in Glenwood, Maryland (the "Glenwood home").1 They hired Maija Dykstra, a real estate agent who was a member of The Creig Northrop Team, P.C. ("The Northrop Team"), to represent them as buyers. The Northrop Team is comprised of real estate agents who independently provide real estate brokerage services under the brokerage license of Long & Foster Real Estate, Inc.2 Creighton Northrop, III, a real estate agent, is the President of The Northrop Team. As President of The Northrop Team, Northrop splits real estate commissions with the other real estate agents who are independent-contractor members of the Team.
Pursuant to the Exclusive Right to Represent Buyer Agreement between the Baehrs and Long & Foster, Dykstra, as the Baehrs's real estate agent, located the Glenwood home and helped the Baehrs submit an offer to purchase it for $835,000. The sellers of the Glenwood home were represented by Northrop. After the Baehrs's offer was accepted, Dykstra informed them that the Lakeview Title Company would provide the settlement services necessary to complete the purchase of the Glenwood home. The Baehrs were not first-time home buyers and understood that they were free to procure settlement services from any provider thereof, but they "were satisfied" that Dykstra would select the settlement company. See J.A. 171.3 In selecting the Lakeview Title Company, Dykstra informed the Baehrs that The Northrop Team "do[es] all [its] settlements at [the] Lakeview [Title Company]." Id. at 172. Despite shopping around for a mortgage lender, the Baehrs proceeded to settle on the Glenwood home with the Lakeview Title Company without investigating the Company or any other settlement services providers. The Baehrs did not inquire about the Lakeview Title Company's rates, quality of service, or affiliation with The Northrop Team because they had "contracted with a reputable company"—that is, The Northrop Team—and believed that The Northrop Team "would have [their] best interest." Id. at 173.
The HUD-1 Settlement Statement prepared for the Baehrs's purchase of the Glenwood home listed, inter alia, the following fees for settlement services provided by the Lakeview Title Company:4
Title Examination to the Lakeview Title Company: $375
Title Insurance Binder to the Lakeview Title Company: $50
Title Insurance to the Chicago Title Insurance Company: $2,9905
Recording Services to the Lakeview Title Company: $50
[Editor’s Note: The preceding image contains the reference for footnote5 ].
See J.A. 145. Other than the title insurance premium of $2,990, which was based on a rate filed with the State of Maryland, the Baehrs had paid similar fees for settlement services when purchasing a less-expensive home in Germantown in 2000. Id. at 219; see also Md. Code, Ins. §§ 11-403, 11-404, 11-407 (). As they had for the Glenwood home, when purchasing the Germantown home, the Baehrs paid $375 for the title examination and $50 for the title insurance binder. See J.A. 219. The Baehrs also paid $75 for document preparation, $10 for notary fees, and $10 for copies. Id. In sum, the Baehrs paid $520 in discretionary fees to their settlement services provider for the Germantown home purchase. By contrast, the Baehrs paid only $425 in discretionary fees to the Lakeview Title Company for the Glenwood home purchase.
Almost five years after closing on the Glenwood home, the Baehrs received an unsolicited letter from a lawyer, G. Russell Donaldson, stating that they might have "a legal claim based on illegal kickbacks paid for the referral of [their] business to a title company that settled [their] purchase" of the Glenwood home. See J.A. 342. Shortly thereafter, the Baehrs retained Donaldson and the law firm Conti Fenn & Lawrence LLC to pursue a claim that they had been illegally referred to the Lakeview Title Company in contravention of RESPA. Before receiving Donaldson's letter, the Baehrs were satisfied with their experience purchasing the Glenwood home and the settlement services that the Lakview Title Company had provided. Indeed, even after learning of the purported kickback scheme, the Baehrs believed that the Lakeview Title Company was entitled to the fees it charged "for the work that [it] did." Id. at 208, 327.
Nevertheless, on March 27, 2013, the Baehrs, as representatives of the putative class of victims in these proceedings, filed suit in the District of Maryland against multiple defendants. See Baehr v. The Creig Northrop Team, P.C. , No. 1:13-cv-00933 (D. Md. Mar. 27, 2013), ECF No. 1 (the "Initial Complaint"). The single count of the Initial Complaint alleged that the Northrop and Lakeview Defendants, plus Long & Foster Real Estate, Inc. and Carla Northrop, violated RESPA's prohibition against giving or receiving kickbacks for settlement service referrals. Id. ¶ 1. That claim was predicated on a kickback scheme that spanned from 2000 to 2014, and that was perpetrated by the Northrop and Lakeview Defendants, Long & Foster, and Carla Northrop. The Initial Complaint alleged that, between 2000 and 2007, the Lakeview Defendants paid illegal kickbacks for settlement service referrals under the guise of a sham employment agreement between the Lakeview Title Company and Carla Northrop. Id. ¶ 17. And the Initial Complaint alleged that, between 2008 and 2014, the Lakeview Defendants paid illegal kickbacks for settlement service referrals under the guise of a sham marketing agreement between the Lakeview Title Company and The Northrop Team. Id. ¶ 19. According to the Initial Complaint, as a result of the kickback scheme, the Baehrs and the putative class "were deprived of an impartial and fair competition between settlement service[s] providers in violation of RESPA." Id. ¶ 25.
On January 29, 2014, the district court dismissed defendants Long & Foster and Carla Northrop with prejudice. See Baehr v. The Creig Northrop Team, P.C. , No. 1:13-cv-00933, slip op. at 16, 18 (D. Md. Jan. 29, 2014), ECF No. 58 (the "Dismissal Opinion"); see also Baehr v. The Creig Northrop Team, P.C. , No. 1:13-cv-00933, slip op. at 10 (D. Md. Jul. 24, 2014), ECF No. 84 (). The court...
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