EDWARD J. AND VICKI FANGMAN, ET AL.
GENUINE TITLE, LLC, ET AL.
Argued: March 31, 2016
States District Court for the District of Maryland Civil
Action No. RDB-14-0081
Barbera, C.J., [*] Battaglia, Greene, Adkins,
McDonald, Watts, Hotten, JJ.
case involves a purported class action lawsuit in the United
States District Court for the District of Maryland ("the
federal court") against a settlement and title services
company, various mortgage lenders, and alleged sham companies
that were formed by the settlement and title services
company, for allegedly engaging in a home mortgage kickback
scheme in which the settlement and title services company, by
itself and through the sham companies, provided cash payments
and marketing materials to mortgage brokers who referred
clients to the settlement and title services company for
settlement services. The federal court certified to this
Court the following question of law: "Does Md. Code
Ann., Real Prop. [(1974, 2015 Repl. Vol.) ("RP")]
§ 14-127 imply a private right of action?"
answer the certified question of law "no" and hold
that RP § 14-127 does not contain an express or implied
private right of action, as neither RP § 14-127's
plain language, legislative history, nor legislative purpose
demonstrates any intent on the General Assembly's part to
create a private right of action.
memorandum opinion accompanying the certification order, the
federal court stated the following facts,  which we
J. Fangman and Vicki Fangman (collectively "the
Fangmans") seek to represent a class of approximately 4,
000 to 5, 000 individuals (collectively
"Appellants") who, from 2009 to 2014, retained
Genuine Title, LLC ("Genuine Title") for settlement
and title services and utilized various lenders (collectively
"the Lender Appellees") (together with Genuine
Title, "Appellees") for the purchase and/or
refinancing of their residences. All Appellants allegedly
used Genuine Title's settlement and title services as a
result of referrals from the Lender Appellees. All of the
Lender Appellees are servicers of federally related mortgage
second amended complaint,  the Fangmans alleged that they and all
other class members "were victims of an illegal kickback
scheme" in which the Lender Appellees received unearned
fees and kickbacks from Genuine Title and "sham
companies" that were created by Genuine Title
(collectively, "the Genuine Title Appellees") for
the purpose of distributing the kickbacks. According to the
second amended complaint, the Lender Appellees' employees
and/or agents received and accepted cash payments, free
marketing materials, and other things of value from the
Genuine Title Appellees in exchange for referring borrowers
to Genuine Title for settlement and title
services. The Genuine Title Appellees and Lender
Appellees allegedly concealed these payments from Appellants
and failed to disclose the payments on Appellants' HUD-1
settlement statements. Additionally, Appellants alleged that
Genuine Title and the Lender Appellees failed to disclose
that Genuine Title was participating with referring loan
officers/banks and with the Genuine Title Appellees, and also
failed to disclose their affiliated business relationships.
point, regulators began to investigate the alleged scheme.
Appellants alleged that, once the investigation began,
Genuine Title drafted and back-dated sham title services
agreements for the purpose of disguising cash payments as
legitimate fees for alleged services provided. Appellants
alleged that cash payments were not made in accordance with
the fee schedule contained in the title services agreement.
For example, in some instances, pursuant to the sham title
services agreements, Genuine Title agreed to make cash
payments to referring mortgage brokers for title services
that were not actually performed. Appellants alleged that, as
a result of the kickback scheme, they were deprived of
"kickback[-]free settlement services and process"
and their settlement fees would have been "much
lower" had the kickback scheme not been in place.
December 6, 2013, the Fangmans filed in the Circuit Court for
Baltimore County an initial class action complaint against
Genuine Title. Genuine Title then removed the case to the
federal court. On January 2, 2015, the Fangmans, along
with thirty other Appellants, filed the first amended
complaint on behalf of themselves and the alleged class,
adding as defendants the Genuine Title Appellees and all but
one of the Lender Appellees. On May 20, 2015, Appellants
filed the second amended complaint, adding as a defendant one
Lender Appellee and adding sixteen additional
plaintiffs. In the second amended complaint,
Appellants alleged that the Genuine Title Appellees and
Lender Appellees violated 12 U.S.C. § 2607(a) and (b),
part of the Real Estate Settlement Procedures Act
("RESPA"); RP § 14-127; and Md. Code Ann., Com.
Law (1975, 2013 Repl. Vol.) ("CL") § 13-301,
part of the Maryland Consumer Protection Act.
response to the second amended complaint, the Genuine Title
Appellees and Lender Appellees filed in the federal court
eleven separate motions to dismiss. On November 24, 2015, the
federal court conducted a hearing on the motions to
dismiss. On December 9, 2015, the federal court
issued a memorandum opinion in which the federal court, with
one exception,  denied the motions to dismiss the RESPA
claims, granted the motions to dismiss the Maryland Consumer
Protection Act claims, and stayed the motions to dismiss the
RP § 14-127 claims so that this Court could determine
whether RP § 14-127 permits a private right of
action. As to the RP § 14-127 claims, the
federal court observed "that no Maryland state court
decision has resolved the present issue, " and thus it
was certifying the question of law to this Court. On the same
day, December 9, 2015, the federal court issued a
certification order and stayed Appellants' claims as to
RP § 14-127 in the federal court pending this
contend that RP § 14-127 provides an implied private
right of action. Appellants argue that RP § 14-127 was
enacted to protect a narrow class of individuals- namely,
consumers of residential title and settlement services-and
that Appellants are in that class for whose benefit RP §
14-127 was enacted; i.e., they are consumers of
residential title and settlement services. Appellants assert
that the injuries that they suffered- including overcharges,
lack of impartiality in the referral, and a reduction of
competition among settlement service providers-constitute the
exact type of harm that RP § 14-127 was designed to
prevent. Appellants maintain that RP § 14-127's
language focuses on, and RP § 14-127's purpose is,
the protection of consumers in real estate transactions
involving land in Maryland. According to Appellants, implying
a private right of action under RP § 14-127 is
consistent with RP § 14-127's language and purpose.
Appellees respond that there is no
evidence that the General Assembly intended to create a
private right of action under RP § 14-127 and that there
is no basis in law or fact for implying a private right of
action. Appellees contend that RP § 14-127 neither
identifies a specific class of protected individuals nor
confers a beneficial right on any specific class of
individuals, let alone Appellants. Appellees argue that, on
its face, RP § 14-127 does not confer any right at all,
and instead is a broad prohibition on individuals who are
involved in real estate transactions in Maryland from paying
or receiving anything in exchange for settlement business.
According to Appellees, RP § 14-127 simply prohibits a
certain type of conduct and is designed to protect the public
at large, not a narrow, specific class of individuals.
Appellees assert that neither RP § 14-127's plain
language nor its legislative history supports the position
that RP § 14-127's purpose was to create a private
right of action. Appellees point out that, when RP §
14-127 was amended in 2010, the General Assembly was aware
that RESPA provided a private right of action, yet chose not
to provide a similar private right of action under RP §
14-127. Appellees maintain that RP § 14-127's
purpose is to criminalize certain conduct; in other words,
according to Appellees, RP § 14-127 is a criminal
statute with no private right of action.
to the Maryland Uniform Certification of Questions of Law
Act, Md. Code Ann., Cts. & Jud. Proc. (1973, 2013 Repl.
Vol.) ("CJP") §§ 12-601 to 12-613, this
Court has the power to "answer a question of law
certified to it by a court of the United States . . . if the
answer may be determinative of an issue in pending litigation
in the certifying court and there is no controlling appellate
decision, constitutional provision, or statute of this
State." CJP § 12-603. In considering a certified
question of law, "this Court's statutorily
prescribed role is to determine only questions of Maryland
law, not questions of fact. . . . [And], we confine our legal
analysis and final determinations of Maryland law to the
questions certified." Parler & Wobbler v. Miles
& Stockbridge, 359 Md. 671, 681, 756 A.2d 526, 531
(2000) (citations omitted).
statutory interpretation, in Montgomery Cnty. v.
Phillips, 445 Md. 55, 62-63, 124 A.3d 188, 192 (2015),
we stated that "[t]he cardinal rule of statutory
construction is to ascertain and effectuate the intent of the
General Assembly[, ]" explaining:
[T]o determine that purpose or policy, we look first to the
language of the statute, giving it its natural and ordinary
meaning. . . . When the statutory language is clear, we need
not look beyond the statutory language to determine the
General Assembly's intent. If the words of the statute,
construed according to their common and everyday meaning, are
clear and unambiguous and express a plain meaning, we will
give effect to the statute as it is written. In addition, we
neither add nor delete words to a clear and unambiguous
statute to give it a meaning not reflected by the words the
General Assembly used or engage in forced or subtle
interpretation in an attempt to extend or limit the
statute's meaning. . . .
If the language of the statute is ambiguous,  then courts
consider not only the literal or usual meaning of the words,
but their meaning and effect in light of the setting, the
objectives and purpose of the enactment under consideration.
. . .
If the true legislative intent cannot be readily determined
from the statutory language alone,  we may, and often must,
resort to other recognized indicia-among other things, the
structure of the statute, including its title; how the
statute relates to other laws; the legislative history,
including the derivation of the statute, comments and
explanations regarding it by authoritative sources during the
legislative process, and amendments proposed or added to it;
the general purpose behind the statute; and the relative
rationality and legal effect of various competing
(Citation and brackets omitted).
RP § 14-127 currently provides:
(a) Definitions. - (1) In this section the following
words have the meanings indicated.
(i) A fee;
(iii) A gift, except promotional or advertising materials for
(iv) A thing of value;
(v) A rebate;
(vi) A loan; or
(vii) An advancement of a commission or deposit money.
(3) "License" has the meaning stated in §
10-101 of the Insurance Article.
(4)"Residential real estate transaction" means a
transaction involving a federally related mortgage loan as
defined in 12 U.S.C. § 2602 and 12 C.F.R. § 1024.2.
(5)"Title insurance producer" has the meaning
stated in § 10-101 of the Insurance Article.
(b)Scope of section. - This section does not
(1)The payment of a commission to a title insurance producer
who has a license; or
(2)The referral of a real estate settlement business or a
professional fee arrangement between attorneys, if the
referral or professional fee arrangement does not violate
§ 17-605 of the Business Occupations and Professions
(c)Payment or receipt of consideration prohibited. -
(1) A person who has a connection with the settlement of real
estate transactions involving land in the State may not pay
to or receive from another any consideration to solicit,
obtain, retain, or arrange real estate settlement business.
(2) A person may not be considered to be in violation of
paragraph (1) of this subsection solely because that person
is a participant in an affiliated business arrangement, as
defined in 12 U.S.C. § 2602, and receives consideration
as a result of that participation as long as that person
complies with 12 U.S.C. § 2607(c)(4), 12 C.F.R. §
1024.15, and Appendix D to 12 C.F.R. Part 1024.
(d) Compliance with federal law regarding
disclosure. - A person who offers settlement services in
connection with residential real estate transactions
involving land in the State shall comply with 12 U.S.C.
§ 2607(c)(4), 12 C.F.R. § 1024.15, and Appendix D
to 12 C.F.R. Part 1024, as applicable, regarding disclosures
of affiliated business arrangements, as defined in 12 U.S.C.
(e)Violation; penalties. - A person who violates
this section is guilty of a misdemeanor and on conviction is
subject to imprisonment not exceeding 6 months or a fine not
exceeding $ 1, 000 or both.
(f) Separate violations. - Each violation of this
section is a separate violation.
Private Rights of Action
Baker v. Montgomery Cnty., 427 Md. 691, 708-11, 50
A.3d 1112, 1122-23 (2012), we discussed in detail how to
assess whether a State statute contains an implied private
right of action, stating:
A private cause of action in favor of a particular plaintiff
or class of plaintiffs does not exist simply because a claim
is framed that a statute was violated and a plaintiff or
class of plaintiffs was harmed by it. Rather, the issue is a
matter of statutory construction. . . .
The U.S. Supreme Court fashioned the prevailing test for
determining whether a statute contains implicitly a ...