Opinion ID: 1306135
Heading Depth: 1
Heading Rank: 7

Heading: Closing Fee.

Text: Using the same reasoning as it did in regard to the broker fee, the district court concluded Long Beach did not collect the $250 closing fee paid to RICA; therefore, Long Beach did not violate section 535.8(2)( a ). As they did in regard to the broker fee, the Gardins argue that Long Beach collected this fee because the loan itself was the source of the funds used to pay it. For their fallback position, the Gardins contend RICA was an agent of Long Beach as a matter of law, and therefore collected the fee on Long Beach's behalf. They do not dispute the district court's finding that the $250 closing fee was paid directly to RICA for its services as closing agent. The same reasoning we applied to the broker fee applies here. The undisputed facts show that Long Beach did not receive the $250 closing fee; RICA did. Long Beach therefore did not collect this fee. Turning to the Gardins' agency argument, we note that they have the burden of proving RICA was Long Beach's agent and for that reason Long Beach was vicariously liable for the collection of unpermitted fees paid to RICA. See Benson v. Webster, 593 N.W.2d 126, 130 (Iowa 1999). We recognize an agency relationship exists when there is (1) a manifestation of consent by one person (here Long Beach) that another (RICA) shall act on the former's behalf and subject to the former's control and (2) the consent of the latter to so act. Id. The key to determining whether an agency relationship exists is the principal's right of control. Id. To establish the alleged agency relationship, the Gardins rely on instructions Long Beach forwarded to all closing agents, including RICA, to follow to ensure compliance with applicable laws pertaining to fees. For reasons that follow, we conclude as a matter of law there was no agency as the Gardins contend. We first note the district court found as undisputed facts that (1) Long Beach did not hire RICA, rather SMC did; and (2) there was no ongoing or established business relationship between Long Beach and RICA. Therefore evidence of consent to act as well as evidence of control was lacking. Moreover, we do not view Long Beach's action in sending the closing instructions to RICA as raising any material fact issue on the question of agency. We conclude that because RICA was collecting the fee on its own behalf for services it performed, it was not collecting the fee for Long Beach for any of its services. The underlying premise of the Gardins' argument is that Long Beach received the fees through the Gardins' actions in rolling all the settlement charges into the loan, an argument we have previously rejected.