FILED

U.S. COURT OF APPEALS

ELEVENTH CIRCUIT

October 20, 2008

THOMAS K. KAHN

CLERK

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

________________________

No. 08-11511

Non-Argument Calendar

________________________

D. C. Docket No. 07-00171-CV-WS-B

LORI HAZEWOOD,

individually and on behalf of other similarly situated,

Plaintiff-Appellant, 

versus

FOUNDATION FINANCIAL GROUP, LLC,

TICOR TITLE INSURANCE COMPANY, INC.,

MERIDIAN TITLE SERVICES, LLC,

NETWORK CLOSING SERVICES, INC.,

Defendants-Appellees.

_______________________

Appeal from the United States District Court

for the Southern District of Alabama

_________________________

(October 20, 2008)

Before TJOFLAT, BLACK and KRAVITCH, Circuit Judges.
PER CURIAM:

This is a putative class action involving alleged overcharges by a title

insurer and its agents, in violation of the Real Estate Settlement Procedures Act

(RESPA) § 8(b), 12 U.S.C. § 2607(b). We affirm the district court’s threshold

dismissal of the case.

I. 

On review of a Fed. R. Civ. P. 12(b)(6) dismissal, we, like the district court,

assume the factual allegations in the complaint are true and give the plaintiff the

benefit of reasonable factual inferences. Then we review de novo whether the

complaint, so construed, alleges a basis for relief. See, e.g., Rivell v. Private

Health Care Systems, 520 F.3d 1308, 1309 (11th Cir. 2008).

According to the complaint, Lori Hazewood obtained a federally related

loan of $98,000 from defendant Foundation Financial Group LLC. The loan was

secured by a mortgage in favor of Foundation Financial Group on Hazewood’s

residence. Meridian Title Serivces LLC and Network Closing Services Inc. acted 1

as settlement agents for Hazewood in closing on the loan. Network also sold title

 The relationship between Meridian and Network Closing is unclear from the complaint; 1

the parties appear to treat the two companies as joint actors or as alter egos of one another. Their

relationship is not material to the disposition of this appeal. Hereinafter, this opinion will refer to

them jointly as “Network.”

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insurance as an agent for defendant Ticor Title Insurance Inc. 

In connection with this loan, Ticor, through its agent Network, issued

Hazewood a title insurance policy. The premium was paid to Network, not Ticor,

but the complaint alleges that the premium was, or may have been, split between

the two companies. It is this premium that allegedly violated RESPA. 

Alabama law requires title insurers to submit their rates to the Insurance

Commissioner, who must then approve the “fairness and justness” of this “filed

rate.” Ala. Code. § 27-25-6(c). Title insurers are prohibited from charging

customers premiums in excess of the filed rate. Ala. Code § 27-25-6(a). In this

case, Hazewood was charged a title insurance premium in excess of the filed rate,

and thus, in excess of the maximum rate permitted by Alabama law. According to

the complaint, this overcharge, along with the permissible portion of the insurance

premium, may have been split between Network (the settlement agents) and Ticor

(the title insurer). 

Hazewood’s theory of the case is that the overcharge – that is, the portion of

the premium in excess of the filed rate – was a “portion, split, or percentage of any

charge made or received for the rendering of a real estate settlement service . . .

other than for services actually performed,” and thus prohibited by RESPA. See

12 U.S.C. § 2607(b). Put differently, Hazewood contends that the overcharge was,

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as a matter of law, “other than for services actually performed.” The RESPA

claims were raised against Ticor (the title insurer) and Network (the title insurance

agents).

In addition to the RESPA claims, the complaint also raised various claims

under state law, chiefly unjust enrichment, as well as a federal Truth in Lending

Act claim against Foundation Financial (the lender). The alleged overcharges for

title insurance were also the factual basis for the putative class’s various claims

under RESPA and Alabama law.

The district court dismissed all the claims at issue on appeal. Construing

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our RESPA caselaw, the district court concluded that the statute provides a

remedy only when fees are charged in exchange for no services at all, not for mere

overcharges or excessive fees. Because Hazewood alleged she was charged an

unlawfully high premium, but that premium was for title insurance rather than for

nothing at all, the district court held she did not state a RESPA claim. The district

court further concluded that the state law claims were barred by the Alabama

statute prohibiting title insurance premiums in excess of the filed rate, as that

 The district court did not dismiss the Truth in Lending Act claim against Foundation 2

Financial; however, it appears from the record that this claim has settled. Our jurisdiction would

have been unaffected in any event, as final judgment was separately entered as to the claims and

parties on appeal.

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statute explicitly provides that it does not create any privately enforceable rights. 

This appeal followed.

II.

Hazewood argues that dismissal of her RESPA claims was erroneous

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because her complaint alleges that a portion of her title insurance premium was

unearned. We disagree.

RESPA § 8(b) provides that

No person shall give and no person shall accept any portion, split, or

percentage of any charge made or received 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 U.S.C. § 2607(b). As we have previously held, RESPA § 8(b) does not provide

a cause of action for excessive fees – that is, charges where a service was

performed, but the plaintiff feels she was overcharged by the service provider. 

Friedman v. Market Street Mortg. Corp., 520 F.3d 1289, 1296 (11th Cir. 2008). 

Rather, a plaintiff must allege that “no services were rendered in exchange for a

settlement fee.” Id. at 1298. “Where the fee is for services actually rendered,

there is no § 2607(b) violation.” Krupa v. Landsafe, Inc., 514 F.3d 1153, 1157

 Hazewood has abandoned any argument concerning the dismissal of her state law

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claims. 

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(11th Cir. 2008). Moreover, a RESPA plaintiff may not avoid the prohibition on

excessive fee claims by asking a court to divide a fee for services actually

performed into “reasonable” and “unreasonable” (and hence, unearned)

components. Friedman, 520 F.3d at 1297 (quoting Kruse v. Wells Fargo Home

Mortg. Inc., 383 F.3d 49, 56 (2nd Cir. 2004)). It follows, therefore, that where a

plaintiff concedes that a service is actually performed in exchange for a settlement

fee, she may not avoid dismissal of her RESPA claim by arguing that the

“excessive” portion of the fee was “unearned.” And because Hazewood does not

contend that Ticor and Network did not provide any services, her complaint was

properly dismissed.

Hazewood argues that her complaint should survive dismissal because it

contains factual allegations that a portion of the title insurance fee was unearned

or not for services actually performed. See generally Sosa v. Chase Manhattan

Mortg. Corp., 348 F.3d 979, 983-84 (11th Cir. 2003) (to survive dismissal,

RESPA plaintiff must allege that no services were performed for a settlement fee). 

This argument is contrary to our precedent stating for a settlement fee to be

actionable, no services must be rendered in exchange for it. Moreover, to

whatever degree it is relevant, we need not accept as true Hazewood’s contention

that no services were performed for the title insurance fee, or a portion of it. In the

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circumstances presented here, stating that the title insurance fee (or a portion of it)

was “unearned” or not for services performed is a legal conclusion, which neither

we nor the district court need accept as true. See, e.g., Oxford Asset Management

Ltd. v. Jaharis, 297 F.3d 1182, 1188 (11th Cir. 2002) (“legal conclusions

masquerading as facts will not prevent dismissal”). This conclusory

characterization cannot cure deficient factual allegations in the complaint. The

factual allegations of the complaint make clear that Hazewood received title

insurance coverage and paid a premium for it; that premium was in excess of the

filed rate. Even if the excess portion of the premium was arguably “unearned” as a

matter of Alabama law, as a factual matter it was not in exchange for nothing. It is

clear from the complaint that Ticor performed services for the fee, namely issuing

a title insurance policy. That defeats any RESPA § 8(b) claim as to Ticor. It is

equally clear that Network provided some services for whatever portion of the fee

it received, namely acting as Ticor’s agent in selling the policy to Hazewood. No

§ 8(b) claim will lie against Network either.

Hazewood also argues that our previous cases, such as Friedman,

enunciating the prohibition on dividing settlement fees into reasonable and

unreasonable components are inapposite. In those cases, she argues, the plaintiff

was asking a court to make an arbitrary determination that some portion of a

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putatively excessive fee was unearned. But in this case, Hazewood argues such

line-drawing is not at all arbitrary: the filed rate provides a ready benchmark by

which we may divide the title insurance premium into earned and unearned

components. The distinction she seeks to draw is unpersuasive. The notion that

Congress intended RESPA § 8(b) to implicitly create a federal remedy for

overcharges under state insurance laws – in circumstances when the state itself

does not recognize a private right of action, at that – is simply too much to

swallow. As we have emphasized, § 8(b) “is not a price control provision.” 

Friedman, 520 F.3d at 1296. Recognizing that RESPA does not impose federal

price controls on title insurance or other settlement services, we doubt that

Congress intended to create a federal remedy for violations of state price controls,

either, on the theory that violations of price controls are not for services actually

rendered. Hazewood’s contrived reading of the statute would do just that.

Finally, Hazewood urges us to “overrule, modify, or distinguish Friedman”

so that her claim may proceed on the authority of a HUD policy statement which

would permit § 8(b) claims for “unreasonable” or excessive fees, and which we

rejected in Friedman as contrary to § 8(b)’s plain meaning. Friedman, 520 F.3d at

1296-98. We lack authority to overrule or modify Friedman, as the holding of a

three-judge panel is the law of the circuit unless it is overruled (or undermined to

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the point of abrogation) by the en banc Eleventh Circuit, or by the Supreme Court

of the United States. See, e.g, United States v. Archer, 531 F.3d 1347, 1352 (11th

Cir. 2008) (citations omitted). And as explained above, Hazewood’s attempts to

distinguish Friedman fail.

In sum, Hazewood has alleged no § 8(b) claim, and the dismissal of her

complaint is

AFFIRMED.

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