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Northwest Title Agency, Inc. v. United States

United States Court of Appeals, Federal Circuit

April 28, 2017

UNITED STATES, Defendant-Appellee

         Appeal from the United States Court of Federal Claims in No. 1:15-cv-00248-EGB, Senior Judge Eric G. Bruggink.

          Wayne B. Holstad, Holstad and Knaak, St. Paul, MN, argued for plaintiff-appellant.

          Amanda Tantum, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for defendant-appellee. Also represented by Benjamin C. Mizer, Robert E. Kirschman, Jr., Steven J. Gillingham; Gabriel Lopez, Nicole A. Allard, Office of Counsel, Region VIII, United States Department of Housing and Urban Development, Denver, CO.

          Before Newman, Dyk, and Taranto, Circuit Judges.


         Northwest Title Agency, Inc. (NWTA) appeals from the decision of the United States Court of Federal Claims, granting summary judgment in favor of the United States.[1] The Court of Federal Claims concluded that the contracts whereby NWTA provides closing services for homes owned by the Department of Housing and Urban Development (HUD) unambiguously preclude NWTA from charging additional closing fees. We affirm the judgment.


         HUD, through the Federal Housing Administration (FHA), administers the Single Family Mortgage Insurance Program. In that capacity, HUD insures approved lenders against the risk of loss on loans for the purchase of single-family homes. In the event that the borrower of an FHA-insured home loan defaults, the home is foreclosed and is conveyed to HUD by the lender in exchange for payment by HUD of the insured amount. HUD engages contractors to perform the necessary closing activities when HUD resells these properties. NWTA, a title agency and settlement service provider, is such a contractor.

         In 2010, NWTA and HUD entered into three nearly identical two-year contracts pursuant to which NWTA would provide closing services, in three states, for single family properties owned by HUD. The contracts differed as to the estimated number of services expected under the contracts and the price for each service, but the contracts were otherwise identical. The first contract, designated C-DEN-02376, was executed on February 11, 2010 for properties in Wisconsin. The second, C-DEN-02375 executed on April 12, 2010, applies to Minnesota properties. Contract C-DEN-02363, executed on April 28, 2010, applies to Missouri properties. Paragraph B.4.1 of the three contracts included:

As total compensation for all services performed under this contract, the contractor will be paid according to the Contract Line Item Number (CLIN) prices listed below for closings conducted. The unit price per closing specified herein shall be inclusive of all costs, including, but not limited to: the cost of all labor; supervision; fringe benefits, travel, subcontracts, other direct costs, overhead; general and administrative costs; profit/fee; the completion of all documents necessary to close the transaction as well as the cost to complete all financing documents when requested by the buyer or lender to complete the loan portion of the transaction; the cost of phones, postage, postage pre-paid envelopes; shipping (including closed files to storage), delivery costs, courier costs, express mail, faxing, scanning, document reproduction [which includes forms HUD-9546 (Homeowner Satisfaction Survey) and HUD 9547 (Real Estate Broker Satisfaction Survey)]; notary fees, transportation, wire transfer fees, recording fees, annual reconciliation costs, title search costs (see paragraph 4.2.2); ACA documents (see paragraph, any and all licenses, insurance, certificates or permits as stated in Section C, Paragraph 4.1.2; and all office requirements unless otherwise specifically identified in this contract.

Id. (emphasis original). Paragraph B.4.2 was directed to closing costs:

Except as explicitly allowed in Paragraph C. below, the purchaser, lender, and/or seller shall not pay any additional costs for closing services, including an additional lender fee.

Id. (emphasis original). Paragraph C.4.3, entitled "Closing Activities, " provided that "HUD's buyers may at all times be assisted by their own advisors and attorneys and may choose their own closing agent to represent their interests in the transaction." Paragraph C. permitted homebuyers to purchase optional title insurance, either from NWTA or "any firm offering such insurance."

         NWTA provided closing services under the contracts until 2012 and offered and sold title insurance to home-buyers. HUD allowed NWTA to charge homebuyers for title insurance in all three states and for associated title searches in Minnesota and Wisconsin. HUD disallowed NWTA charges for additional title ...

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