Snow v. First American Title Insurance Co.
| Decision Date | 11 June 2003 |
| Docket Number | No. 02-60627.,No. 02-60539.,02-60539.,02-60627. |
| Citation | 332 F.3d 356 |
| Parties | Anna D. SNOW; Teresa J. Haley; Ronald Duff; Sabrina Duff; Ricky Williams; Angela Williams, and All Others Similarly Situated, Plaintiffs-Appellants, v. FIRST AMERICAN TITLE INSURANCE COMPANY, Defendant-Appellee. Andrea Chenault; Joanna Smith; Pamela Edwards; Frankie Judd; Debbie L. Wilson; Kenneth W. Wilson; Celestine Turner; Guy E. Watts, Jr.; Janie G. Watts; Lisa Timmons, and All Others Similarly Situated, Plaintiffs-Appellants, v. Mississippi Valley Title Insurance Company; Old Republic National Title Insurance Company, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Fifth Circuit |
James Clifton Johnson, II (argued), Joe Bradley Pigott, Pigott, Reeves, Johnson & Minor, Jackson, MS, for Plaintiffs-Appellants.
Irene M. Solet, Stephanie Robin Marcus (argued), Michael Jay Singer, U.S. Dept. of Justice, Civ. Div.—App. Staff, Washington, DC, for U.S., Amicus Curiae.
Charles A. Newman (argued), Bryan Cave, St. Louis, MO, for First Am. Title Ins. Co.
Jay N. Varon (argued), Foley & Lardner, Washington, DC, Thomas J. Suszek, Holcomb Dunbar, Oxford, MS, for Mississippi Valley Title Ins. Co.
Appeals from the United States District Court for the Northern District of Mississippi.
Before SMITH, DENNIS and CLEMENT, Circuit Judges.
In these cases consolidated for appeal, plaintiffs sued for alleged violations of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2601 et seq., in connection with their purchase of title insurance. The district court in each case ruled that RESPA's one-year statute of limitations bars recovery. Agreeing with that conclusion, we affirm.
Plaintiffs are putative classes of real estate purchasers.1 Defendants are title insurance companies. Plaintiffs bought title insurance from agents working for the defendant companies. Plaintiffs paid for the insurance at their real estate closings.
Though defendants have different compensation plans, plaintiffs allege that these plans have a common effect: The agents receive additional compensation for generating high volumes of title insurance sales for defendants. First American Title Insurance Company pays annual bonuses to agents who collect certain high amounts of premiums. Mississippi Valley Title Insurance Company and Old Republic National Title Insurance Company pay most of their agents sixty percent of the premiums they collect, but agents with certain high volumes receive seventy percent of their collections.
Plaintiffs allege that these compensation plans violate RESPA's anti-kickback and fee-splitting provisions, 12 U.S.C. § 2607(a)-(b). They sued more than one year after their real estate closings. Defendants argued that RESPA's one-year statute of limitations, 12 U.S.C. § 2614, therefore barred the suits. The district courts agreed and entered judgment for defendants.
These appeals have different procedural postures. The Snow court entered a judgment of dismissal under FED. R.Civ.P. 12(b)(6); the Chenault court entered summary judgment under FED. R.Civ.P. 56(c). When reviewing a dismissal, we take the well-pleaded facts in the complaint as true. Kane Enters. v. MacGregor (U.S.A.) Inc., 322 F.3d 371, 374 (5th Cir.2003). When reviewing a summary judgment, though, we look to whether the plaintiff adduced specific evidence creating a genuine issue of material fact. Chaplin v. Nations Credit Corp., 307 F.3d 368, 371-72 (5th Cir.2002).
These differences do not affect our review, because plaintiffs and defendants in both cases agree on the relevant facts and dispute only the meaning of certain statutory language in § 2614. We therefore accept the undisputed facts and review the question of statutory interpretation de novo. United States v. Phipps, 319 F.3d 177, 183 (5th Cir.2003).
Congress enacted RESPA "to ensure that real estate consumers `are provided with greater and more timely information on the nature and costs of the settlement process and are protected from unnecessarily high settlement charges caused by certain abusive practices.'" O'Sullivan v. Countrywide Home Loans, Inc., 319 F.3d 732, 738 (5th Cir.2003) (quoting 12 U.S.C. § 2601(a)). To this end, RESPA prohibits any person from giving or accepting "any fee, kickback, or thing of value pursuant to any agreement or understanding ... that business incident to or a part of a real estate service ... shall be referred to any person," 12 U.S.C. § 2607(a), and from accepting any unearned fee in relation to a settlement service, 12 U.S.C. § 2607(b).
"[T]he term `thing of value' includes any payment, advance, funds, loan, service, or other consideration." 12 U.S.C. § 2602(2). The RESPA regulations elaborate this statutory definition to include "credits representing monies that may be paid at a future date." 24 C.F.R. § 3500.14(d). The parties agree that defendants gave, and their agents received, a "thing of value" when plaintiffs paid for the title insurance at their closings, because the agents thereby earned a credit toward future payment under defendants' compensation plans.2
The statute of limitations for private plaintiffs suing for an alleged violation of § 2607 is one year. 12 U.S.C. § 2614. The parties disagree over what triggers this one-year statute of limitations. Section 2614 states that the limitations period runs "from the date of the occurrence of the violation." Defendants argue that "the violation" (if any) occurred at the closing when the agents earned the allegedly prohibited credit toward future payment under defendants' compensation plans. Thus, defendants conclude that § 2614 bars these suits because plaintiffs sued more than one year after their closings.
Plaintiffs acknowledge that a violation (if any) occurred at the closing and therefore that they could have sued immediately thereafter. Yet, plaintiffs counter that the closing is not the only event that triggers the one-year period. They argue that limitations began to run anew when defendants paid the credit that the agents had earned at the closing. Thus, plaintiffs conclude that § 2614 does not bar their suits, because they sued less than one year after defendants tendered the additional income to the agents.
We agree with defendants' interpretation: The phrase "the date of the occurrence of the violation" refers to the closing, i.e., when the plaintiffs paid for the insurance, because that is when the agents earned the allegedly prohibited "thing of value."3 We interpret § 2614 in this way for four main reasons.
First and most importantly, the statutory text and structure better support this reading. In § 2614, Congress spoke of a single triggering violation, not multiple violations. "Any action pursuant to ... section... 2607 ... may be brought in [a court] ... where the violation is alleged to have occurred, within ... 1 year in the case of a violation of section 2607 ... from the date of the occurrence of the violation [.]" 12 U.S.C. § 2614 (emphasis added). Had Congress wanted the various steps in a single transaction to trigger the statute of limitations multiple times, it would have spoken of multiple "violations."
When creating the private right of action for kickbacks and fee-splitting, Congress also spoke of a single "violation." 12 U.S.C. § 2607(d)(2). As plaintiffs recognize, this use of the term "violation" refers to the single integrated transaction, regardless how many steps it has. This undermines their own argument, however, because the same term should be given the same meaning throughout the statute. United States v. Ho, 311 F.3d 589, 606 (5th Cir.2002).
Plaintiffs' interpretation also would upset Congress's policy choices regarding limitations periods for RESPA actions. Section 2614 actually contains three separate statutes of limitations. The Secretary of Housing and Urban Development, state attorneys general, and state insurance commissioners may sue within three years of any violation of RESPA. 12 U.S.C. § 2614. Private plaintiffs, too, have a three-year limitations period for suits alleging a violation of § 2605. Id. Only for private plaintiffs suing under §§ 2607 and 2608 did Congress impose a one-year limitations period. Id.
By extending indefinitely the limitations period for private plaintiffs suing under § 2607, plaintiffs' interpretation would "create[ ] a limitations period that is longer than Congress could have contemplated," Klehr v. A.O. Smith Corp., 521 U.S. 179, 187, 117 S.Ct. 1984, 138 L.Ed.2d 373 (1997), for such suits. The interpretation thus would negate Congress's decision to impose three different limitation periods in § 2614. We are obliged, however, to preserve these policy choices. See United Sav. Ass'n of Texas v. Timbers of Inwood Forest Assocs., Ltd., 484 U.S. 365, 371, 108 S.Ct. 626, 98 L.Ed.2d 740 (1988).
Furthermore, Congress directed RESPA toward the closing. The primary ill that § 2607 is designed to remedy is the potential for "unnecessarily high settlement charges," § 2601(a), caused by kickbacks, fee-splitting, and other practices that suppress price competition for settlement services. This ill occurs, if at all when the plaintiff pays for the service, typically at the closing. Plaintiffs therefore could have sued at that moment, and "the standard rule [is] that the limitations period commences when the plaintiff has a complete and present cause of action." Bay Area Laundry & Dry Cleaning Pension Trust Fund v. Ferbar Corp. of California, Inc., 522 U.S. 192, 201, 118 S.Ct. 542, 139 L.Ed.2d 553 (1997) (quotation marks omitted).4
Indeed, plaintiffs should be indifferent to whether defendants pay their agents in the future, because it would not affect the price plaintiffs paid for title insurance. This statutory emphasis on the closing further indicates that the limitations period begins to run when the agents earned the allegedly prohibited credit at the closing.
Second, plaintiffs' interpretation would create...
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