Snow, et al v. First Amer Title Ins

United States Court of Appeals
Fifth Circuit
F I L E D
June 11, 2003
Charles R. Fulbruge III
Clerk
In the
United States Court of Appeals
for the Fifth Circuit
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m 02-60539
_______________
ANNA D. SNOW; TERESA J. HALEY; RONALD DUFF; SABRINA DUFF;
RICKY WILLIAMS; ANGELA WILLIAMS, AND ALL OTHERS SIMILARLY SITUATED,
Plaintiffs-Appellants,
VERSUS
FIRST AMERICAN TITLE INSURANCE COMPANY,
Defendant-Appellee.
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_______________
m 02-60627
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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,
VERSUS
MISSISSIPPI VALLEY TITLE INSURANCE COMPANY;
OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY,
Defendants-Appellees.

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_________________________
Appeals from the United States District Court
for the Northern District of Mississippi
_________________________
Before SMITH, DENNIS, and CLEMENT,
Circuit Judges.
JERRY E. SMITH, Circuit Judge:
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.
I.
Plaintiffs are putative classes of real estate
purchasers.1 Defendants are title insurance
companies. Plaintiffs bought title insurance
from agents working for the defendant compa-
nies. Plaintiffs paid for the insurance at their
real estate closings.
Though defendants have different compen-
sation plans, plaintiffs allege that these plans
have a common effect: The agents receive ad-
ditional compensation for generating high vol-
umes 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.
II.
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. Mac-
Gregor (U.S.A.) Inc., 322 F.3d 371, 374 (5th
Cir. 2003). When reviewing a summary judg-
ment, 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.
1 Neither district court certified a class before
entering judgment, so plaintiffs appear in their
individual capacities.

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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 in-
terpretation de novo. United States v. Phipps,
319 F.3d 177, 183 (5th Cir. 2003).
III.
Congress enacted RESPA “to ensure that
real estate consumers ‘are provided with great-
er 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 oth-
er consideration.” 12 U.S.C. § 2602(2). The
RESPA regulations elaborate this statutory de-
finition to include “credits representing monies
that may be paid at a future date.” 24 C.F.R.
§ 3500.14(d). The parties agree that de-
fendants 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
2 Defendants, of course, contest that this “thing
of value” violated the statute, but we need not
address that question.
3 We use “closing” interchangeably with the
(continued...)

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§ 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 stat-
ute 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 in-
tegrated 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 pe-
riod 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 (1997), for
such suits. The interpretation thus would ne-
gate Congress’s decision to impose three dif-
ferent limitation periods in § 2614. We are
obliged, however, to preserve these policy
choices. See United Sav. Ass’n v. Timbers of
Inwood Forest Assocs., Ltd., 484 U.S. 365,
371 (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., 522 U.S. 192, 201
(...continued)
date of plaintiffs’ payment for the title insurance,
because they are identical in this case, as they are
in most real estate transactions. We recognize,
however, the possibility that purchasers could pay
for a settlement service subject to § 2607(a)-(b) at
a time other than the closing, in which case “the
date of the occurrence of the violation” presumably
would be the date of payment, not the unrelated
closing.

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(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 cre-
ate several absurd results, which we must
endeavor to avoid. United States v. Ret.
Servs. Group, 302 F.3d 425, 435-36 (5th Cir.
2002). Most obviously, plaintiffs’
interpretation would allow them to recover
twice for a single violation in connection with
a single settlement service, once for the
violation at closing and again for the violation
at payment. Nothing in the statute authorizes
this double recovery. To the contrary,
Congress already imposed treble damages for
any kickback or fee-splitting violation. 12
U.S.C. § 2607(d)(2).5
Plaintiffs’ interpretation also would let the
statute of limitations regenerate itself like a
phoenix from the ashes. Plaintiffs note that
some insurance companies, instead of cash
payments, might give their high-volume agents
trips to events such as annually-occurring golf
tournaments. Suppose, however, that a
company rewarded its highest volume agents
with trips to the Olympics. In this situation,
plaintiffs contend that the limitations period
would begin at the closing and expire a year
later, only to be restarted years later when the
agents travel to the Olympics and then to run
for another year. Neither the statute nor the
caselaw supports this unheard-of proposition.6
In addition, under plaintiffs’ interpretation,
like plaintiffs would face unalike limitations
periods. Suppose two persons buy title
insurance from the same agent on the same
day at the same price and subject to the same
compensation plan. For the first purchaser,
the agent remits the full premium to the
insurance company but is credited with a
4 See also Clark v. Iowa City, 87 U.S. (20
Wall.) 583, 589 (1875) (“All statutes of limitations
begin to run when the right of action is
complete[.]”).
5 Plaintiffs attempt but fail to dispel the possi-
bility of such double recovery. They emphasize
§ 2607(d)(2), which states that “[a]ny person or
persons who violate the prohibitions or limitations
of this section shall be . . . liable to the person . . .
charged for the settlement service involved in the
violation in an amount equal to three times the
amount of any charge paid for such settlement
service.” They argue first that the measure of
damages is the “charge paid,” and, because they
paid only one charge, there can only be one re-
covery. Yet, there is no reason, under their in-
(continued...)
5(...continued)
terpretation, why they could not recover twice for
the treble value of the single charge paid. They
also argue that Congress used the plural “pro-
hibitions or limitations” to describe the violation
but used the singular “charge paid” to describe the
measure of liability. Yet, the phrase “prohibitions
or limitations” plainly refers to the multiple rules
imposed by § 2607, not the number of violations
committed under the section.
6 Cf. Reiter v. Cooper, 507 U.S. 258, 267
(1993) (“While it is theoretically possible for a
statute to create a cause of action that accrues at
one time for the purpose of calculating when the
statute of limitations begins to run, but at another
time for the purpose of bringing suit, we will not
infer such an odd result in the absence of any such
indication in the statute.”).

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future payment. For the second purchaser, the
agent retains his share of the premium and
remits the remainder to the company. The first
purchaser enjoys an indefinitely extended
limitations period, whereas the limitations
clock begins to tick immediately for the second
purchaser.
RESPA nowhere suggests that Congress
intended such dissimilar treatment. “If
Congress had intended the statute of
limitations to float in this way, it could have so
provided in explicit language.” Mullinax v.
Radian Guar. Inc., 199 F. Supp. 2d 311, 325
(M.D.N.C. 2002).
Third, we create a simple and workable rule
for the application of § 2614 by interpreting
the phrase “the date of the occurrence of the
violation” as the date of the closing, which is
a definite and indisputable date known to
potential plaintiffs and defendants. The date
when defendants pay their agents, on the other
hand, is unknown to plaintiffs; it could occur
weeks, months, or even years after the closing.
Plaintiffs’ interpretation thus would
generate confusion and uncertainty about the
timeliness of many RESPA claims. In practice,
it would encourage tardy plaintiffs to sue and
hope that discovery turns up a recent payment
that restarts the limitations period.7 This in-
terpretation “thereby conflicts with a basic
objectiveSSreposeSSthat underlies limitations
periods.” Klehr, 521 U.S. at 187.
Fourth, the caselaw, albeit limited, uniform-
ly supports defendants’ interpretation. No
circuit has interpreted the phrase “the date of
the occurrence of the violation” in § 2614.
One district court, in a thorough opinion, has
held that “the violation occurs and the
limitations period begins once a borrower
overpays for a settlement service that is
subject to [§ 2607].” Mullinax, 199 F. Supp.
2d at 325. Several other courts have assumed
in dictum that the violation occurs when a
plaintiff pays for the settlement service.8
Plaintiffs, by contrast, cannot point to a case
that holds or even assumes that the limitations
period can restart when the defendant pays an
allegedly illegal kickback or fee.
AFFIRMED.
7 Plaintiffs have not raised, and we therefore
express no opinion on, the question whether § 2614
is subject to equitable tolling. Compare Hardin v.
City Title & Escrow Co., 797 F.2d 1037, 1039-41
(D.C. Cir. 1986) (holding that § 2614 is not
subject to equitable tolling) with Mullinax, 199 F.
Supp. 2d at 326-28 (holding that § 2614 is subject
to equitable tolling).
8 See, e.g., Salois v. Dime Savs. Bank, 128 F.3d
20, 25 (1st Cir. 1997); Pedraza v. United Guar.
Corp., 114 F. Supp. 2d 1347, 1349 (S.D. Ga.
2000); Bloom v. Martin, 865 F. Supp. 1377, 1386
(N.D. Cal. 1994), aff’d, 77 F.3d 318 (9th Cir.
1996).

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