The opinion of the court was delivered by: MILTON I. SHADUR
Keith Durr ("Durr") has filed a putative class action against Intercounty Title Company of Illinois ("Intercounty") under a provision of the Real Estate Settlement Procedures Act ("RESPA"),
charging Intercounty with a violation of RESPA § 2607(b). Intercounty has responded with motions (1) to strike the prayer for relief advanced by Durr's counsel D. Alan Harris ("Harris") and (2) to dismiss Durr's First Amended Class Action Complaint ("Complaint") and this action. For the reasons stated in this memorandum opinion and order, both of Intercounty's motions are granted.
Durr's Complaint, which must be accepted as accurate for present purposes, alleges that on August 21, 1992 Durr completed the purchase of some residential real property in conjunction with which Intercounty provided "settlement services" (a term defined by RESPA § 2602(3)). Durr asserts that among its charges for those services, Intercounty included amounts for the recording of the deed and mortgage that were in excess of the actual recording fees and costs for those documents. And according to Durr, that overcharge by Intercounty violated RESPA § 2607(b) (Complaint PP 6-8, 11-13):
6. In connection with the transaction, defendant charged Keith Durr $ 25.00 to record the Deed and $ 37.00 to record the Mortgage.
7. In fact, the true recording cost for the Deed was $ 23.00, and defendant exacted an illegal, additional $ 2.00 payment for recording the Deed.
8. In fact, the true recording cost for the Mortgage was $ 31.50, and the defendant exacted an illegal, additional $ 5.50 payment for recording the Mortgage.
11. [sic] By charging the plaintiff $ 25.00 rather than the actual $ 23.00 cost for recording of the Deed, defendant violated 12 U.S.C. sec 2607(b) by accepting a charge for the rendering of a real estate settlement service in connection with a transaction involving a federally related mortgage loan other than for services actually performed.
12. By charging the plaintiff $ 37.00 rather than the actual $ 31.50 cost for recording of the Mortgage, defendant violated 12 U.S.C. sec. 2607(b) by accepting a charge for the rendering of a real estate settlement service in connection with a transaction involving a federally related mortgage loan other than for services actually performed.
13. This court has jurisdiction under 12 U.S.C. sec. 2614.
Although the Complaint ultimately fails for the reasons that will be explained later in this opinion, Intercounty's motion to strike will be addressed first. Here is how RESPA § 2602(3) refers to the concept of "settlement services" in an extensive but nonexhaustive (see United States v. Graham Mortgage Corp., 740 F.2d 414, 417 (6th Cir. 1984)) listing:
the term "settlement services" includes any service provided in connection with a real estate settlement including, but not limited to, the following: title searches, title examinations, the provision of title certificates, title insurance, services rendered by an attorney, the preparation of documents, property surveys, the rendering of credit reports or appraisals, pest and fungus inspections, services rendered by a real estate agent or broker, and the handling of the processing, and closing or settlement.
And here is how RESPA § 2607(d)(2) unambiguously states the measure of damages for a violation of RESPA § 2607(b):
Any person or persons who violate the prohibitions or limitations of this section shall be jointly and severally liable to the person or persons 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.
In this instance the "settlement service involved in the violation" was, as already stated, Intercounty's transmittal of Durr's deed and mortgage from its offices (where the real estate closing took place) to the office of the Cook County Recorder of Deeds. Intercounty's charge imposed for that service was $ 1.50 for the handling of each document. According to the Complaint's allegations, Intercounty also received an additional undisclosed amount because the recording charges actually imposed by the Recorder of Deeds were less than Intercounty had billed to Durr (an excess of $ .50 for the deed and $ 2 for the mortgage).
That, however, is not how Harris has framed the purported cause of action that he advances on Durr's behalf. Instead, from the very inception of the case--beginning with the initial Complaint filed November 5, 1992--Harris has flouted the statute's plain meaning by asking not for three times the $ 7.50 total overcharge but for three times the entire amount that was billed to Durr by Intercounty for all of its services and outlays--$ 62 for the recording of both documents ($ 54.50 of which actually went to the Recorder of Deeds), $ 155 as Intercounty's closing fee (as to which there is no contention made that the fee was in any respect improper) and $ 170 as its title insurance premium (again an indisputably proper billing).
This court followed with still another sua sponte memorandum opinion and order on December 1 ("Opinion II"), not only reiterating counsel's delinquency in that respect but also identifying some other problems with the claim as it then (and now) stood. As for the item now at issue, Opinion II at 2 said:
When all the underbrush is cleared away, the arguments that Durr's counsel advances in the memorandum are entirely bogus in terms of both the RESPA statutory language and its purpose. At most the undisclosed settlement costs suffered by Durr would amount to $ 7.50, which trebled would come to $ 22.50.
Yet Harris again did nothing to cure that patent defect. Little wonder, then, that Intercounty was compelled to resort to ...