                             In the
 United States Court of Appeals
              For the Seventh Circuit
                         ____________

No. 02-2801
GREGORY & MARGARET WEIZEORICK, INDIVIDUALLY
AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED,

                                               Plaintiffs-Appellants,
                                 v.

ABN AMRO MORTGAGE GROUP, INCORPORATED,
A DELAWARE CORPORATION,

                                                 Defendant-Appellee.
                         ____________
            Appeal from the United States District Court
       for the Northern District of Illinois, Eastern Division.
             No. 01 C 0713—William J. Hibbler, Judge.
                         ____________
     ARGUED JANUARY 15, 2003—DECIDED JULY 24, 2003
                         ____________


  Before MANION, KANNE, and DIANE P. WOOD, Circuit
Judges.
 MANION, Circuit Judge.


                                 I.
   On February 1, 2001, Gregory and Margaret Weizeorick
filed suit alleging that ABN AMRO Mortgage Group Inc.
violated the Real Estate Settlement Procedures Act, 12
2                                                  No. 02-2801

U.S.C. § 2601, et seq., and state law provisions, by illegally
splitting a fee with the closing agency without performing
any services. The district court determined that no fee
split had occurred as a matter of law and dismissed their
federal allegations for failure to state a claim pursuant to
Federal Rule of Civil Procedure 12(b)(6). The Weizeoricks
appeal, and because they successfully pleaded a claim for
relief, we reverse.


                              II.
  On July 24, 2000, Gregory and Margaret Weizeorick
closed on the sale of their home in Chicago, Illinois. In
connection with the closing and the repayment of their
mortgage, ABN AMRO Mortgage Group (“AAMG”), as
holder of the mortgage, provided the Weizeoricks and
the closing company with a “Payoff Statement” on July 18,
2000. The Payoff Statement included a charge of $10.00
for a “Recording Discharge/Release of Lien Fee.” The
Weizeoricks paid this fee at the closing of the sale of their
home as part of the payoff of their mortgage loan. Also
at closing, the Weizeoricks were charged a “Release Fee”
of $25.60 by the closing company, Attorneys’ Title Guaranty
Fund, Inc, as part of the “settlement charges” owed as
the seller of the home. The Weizeoricks paid that fee as well.
  On February 1, 2001, the Weizeoricks filed a class ac-
tion lawsuit alleging that AAMG’s practice of collecting
$10.00 for “recording” services from borrowers at the
closing on the sale of their homes violates the Real Estate
Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2601,
et seq., as well as state law. Specifically the Weizeoricks
invoked Section 8(b) of RESPA, or 12 U.S.C. § 2607(b), which
prohibits the receipt of a portion of a fee paid for real estate
services without actually performing the service. Id. The
No. 02-2801                                                 3

Weizeoricks alleged that AAMG violated RESPA and
Illinois state law by receiving $10.00 of the $35.60 fee for
recording the discharge of their lien, even though AAMG
did not record the release of the mortgage. According to
the Weizeoricks’ allegations, the title company, not AAMG,
recorded the discharge/release of their mortgage.
   AAMG subsequently moved to dismiss the Weizeoricks’
entire complaint for failure to state a claim under Fed. R.
Civ. P. 12(b)(6). The Weizeoricks withdrew their motion
for class certification, likely because of the unique and
somewhat complex series of transactions that occurred
between the closing company and the title company. They
instead proceeded as individual plaintiffs. On November
16, 2001, the district court, relying on Echevarria v. Chicago
Title and Trust Co., 256 F.3d 623 (7th Cir. 2001), dismissed
the Weizeoricks’ RESPA claim with prejudice, finding that
the Weizeoricks had failed to allege that AAMG had
illegally split fees with the closing agent. The district
court determined that because the title company and AAMG
had each independently charged the Weizeoricks a stan-
dard fee for the recording service, there was no split of an
unearned fee to a third party, as required by the statute. The
Weizeoricks then moved to reconsider the dismissal of
the RESPA claim and AAMG contemporaneously moved
under 28 U.S.C. § 1367(c)(3) to dismiss the Weizeoricks’ state
law claims. The district court denied the Weizeoricks’
motion, granted AAMG’s motion, and dismissed the
Weizeoricks’ case in its entirety.


                             III.
  On appeal, the Weizeoricks contend that the district
court erred in dismissing their claim against AAMG because
their allegations were sufficient to state a claim under
4                                                 No. 02-2801
                      1
§ 2607(b) of RESPA. They contend that the district court
impermissibly interpreted § 2607(b) by requiring a plain-
tiff to allege that the defendant arranged for a third party
to receive unearned fees in order to show a violation
of the statute. The district court erred in this conclusion,
they argue, because § 2607(b) of RESPA only prohibits a
person from accepting an unearned portion of a charge
for settlement services and does not require an allegation
of whether or not the defendant had control of the settle-
ment fee overcharge.
  This court reviews de novo the district court’s grant of
AAMG’s motion to dismiss pursuant to Fed. R. Civ. P.
12(b)(6). See International Mktg., Ltd. v. Archer-Daniels-
Midland Co., 192 F.3d 724, 729 (7th Cir. 1999). Dismissal is
proper “only if it is clear that no relief could be granted
under any set of facts that could be proved consistent with
the allegations.” Hishon v. King & Spaulding, 467 U.S. 69, 73
(1984).
  To determine if dismissal was appropriate in this case we
turn to the statutory basis for the Weizeoricks’ suit. Section
8(b) of the RESPA provides:
    Splitting charges. No person shall give and no person
    shall accept any portion, split, or percentage of any


1
  The Weizeoricks only appeal that part of the district court’s
November 16, 2001 order and opinion granting AAMG’s Fed. R.
Civ. P. 12(b)(6) motion to dismiss the Weizeoricks’ federal law
claim, which arose under RESPA, and that part of the district
court’ s June 25, 2002 order denying the Weizeoricks’ motion
to reconsider the dismissal of the RESPA claim. The June 25,
2002 order also granted, pursuant to 28 U.S.C. § 1367(c)(3),
AAMG’s motion to dismiss the remainder of the Weizeoricks’
claims, all of which arose under state law. The Weizeoricks
have not appealed the dismissal of their state law claims.
No. 02-2801                                                    5

    charge made or received for the rendering of a real
    estate settlement service in connection with a transac-
    tion involving a federally related mortgage loan other
    than for services actually performed.
12 U.S.C. § 2607(b).
   The initial question then is whether Section 8(b) pro-
hibits a party to a real estate transaction from simply
accepting an unearned fee, or does it require that the
unearned amount be part of a split or percentage of a
charge. This court has explained that Section 8(b), en-
titled “Prohibition against kickbacks and unearned fees,” is
an anti-kickback measure that prohibits real estate settle-
ment overcharges when a “portion” or “percentage” of the
charge is kicked back to or “split” with a third party who
performs no service.
    The statutory language describes a situation in which A
    charges B (the borrower) a fee of some sort, collects
    it, and then either splits it with C or gives C a portion
    or percentage (other than 50 percent—the situation
    that the statutory term “split” most naturally describes)
    of it. A might be a lawyer, and C a closing agent . . ., and
    A might charge a legal fee to B and kick back a share
    of it to C for recommending to the borrower that he
    use A’s services. That would be a form of commercial
    bribery and is the target of section 8(b).
Kzralic v. Republic Title Co., 314 F.3d 875, 881 (7th Cir. 2002).
Our case law has consistently held that Section 8(b) is
not violated unless the defendant splits a fee with a third
party. Kzralic, 314 F.3d at 881; Echevarria v. Chicago Title &
Trust Co., 256 F.3d 623, 627 (7th Cir. 2001); Mercado v.
Calumet Fed. Sav. & Loan Ass’n, 763 F.2d 269, 270 (7th Cir.
1985). We have stressed that “under RESPA’s express
terms,” the broad protection of the statute “extends only
6                                                    No. 02-2801

over transactions where the defendant gave or received
any portion, split, or percentage of any charge to a third
party.” Durr v. Intercounty Title Co., 14 F.3d 1183, 1187 (7th
Cir. 1994) (internal quotation omitted). For example, in
Echevarria, we affirmed dismissal under Fed. R. Civ. P.
12(b)(6) when the plaintiffs failed to plead facts tending
to show the third-party involvement required for a Sec-
tion 8(b) claim. Echevarria, 256 F.3d at 626. There, the
plaintiffs alleged that the Chicago Title and Trust Co. had
overcharged them for the recording service, and then split
this amount with the Cook County Recorder by paying the
recorder its fee and pocketing the overage. Id. at 625.
We held that Section 8(b) did not apply because the title
company both collected and retained fees from the plain-
tiffs in the same capacity. Id. We noted that if we sub-
jected a settlement service provider to RESPA liability
for keeping an overcharge without requiring an allegation
that the unearned fee was shared with a third party, “we
would radically, and wrongly, expand the class of cases
to which RESPA applies.” Echevarria, 256 F.3d at 627.
Therefore, insofar as the Weizeoricks argue that liability
attaches to AAMG under Section 8(b) simply for accept-
ing an overcharge as part of a real estate settlement transac-
tion, they are incorrect. A well-pleaded complaint based
upon a violation of Section 8(b) must allege that the de-
fendant shared an unearned fee with a third party to the
real estate transaction. Echevarria,256 F.3d at 627. See also,
Boulware v. Crossland Mortgage Corp., 291 F.3d 261, 265 (4th
            2
Cir. 2002).

2
  We also do not defer, as the Weizeoricks would have us, to
the Department of Housing and Urban Development’s (HUD)
policy statement on this provision. See Real Estate Settlement
Procedures Act Statement of Policy 2001-1, 66 Fed.Reg. 53052, 53057
                                                     (continued...)
No. 02-2801                                                    7

  In response, the Weizeoricks argue that even if they
cannot succeed by merely challenging AAMG’s receipt of
an unearned fee, they have nonetheless alleged a fee
split consistent with the statute. In support of this posi-
tion the Weizeoricks direct our attention to a similar Sec-
tion 8(b) case where a district court denied a motion to
dismiss where the plaintiffs alleged a similarly atypical fee-
split. See Christakos v. Intercounty Title Co., 196 F.R.D. 496
(N.D. Ill. 2000). In Christakos, the title company, Inter-
county Title, was responsible for handling the paperwork
associated with refinancing a home loan. Id. at 499-500. The
bank holding the initial mortgage agreed to file the paper-
work to release the mortgage, but Intercounty Title twice
charged the plaintiff to have the mortgage released, once
by the bank and once by Intercounty. Id. at 500. However,
only the bank actually prepared and filed the release. The
court found that the plaintiffs successfully alleged a split
in violation of Section 8(b) because Intercounty shared
the fee with a third party, the bank. See id. at 503. Specifi-
cally the court found that the two recording fee pay-
ments “were made from the same pool of funds from the
loan proceeds over which [the title company], as settle-
ment agent, had control” and from which it directed pay-
ments to be made. Christakos, 196 F.R.D. at 503. Christakos
is not in conflict with Echevarria, in that the plaintiff al-
leged that the defendant in Christakos shared an unearned
fee with a third party involved in the real estate transaction.
Intercounty Title did not merely accept an unearned fee,


2
  (...continued)
(Oct. 18, 2001). We have previously declined to defer to HUD’s
interpretation of Section 8(b), since the statute is clear on its
face and HUD’s statement was adopted without any formal rule-
making procedures. Kzralic, 314 F.3d at 881.
8                                                   No. 02-2801

but instead accepted fees for a single service, and split
that fee with a third party, who then performed the service.
  Against this backdrop we review the Weiezoricks’ com-
plaint. Significantly, the Weizeoricks allege that AAMG
violated RESPA because they received a $10.00 fee to re-
cord the release of the Weizeoricks’ mortgage, even though
the release was recorded by the closing company, and
the closing company received a separate fee for its ser-
vices. For purposes of this 12(b)(6) determination, we
need to examine the “Payoff Statement” and the “Settle-
                                                           3
ment Statement” referenced in the Weizeoricks’ complaint.
This will bring into focus the exact nature of the alleged
transaction between the Weizeoricks, the closing company
and AAMG. According to the Settlement Statement, the
Weizeoricks’ return from the sale of their house was subject
to several different reductions upon closing. First, the
Weizeoricks were charged a “RELEASE FEE” of $25.60
as part of their $8063.00 in settlement charges. This group
of charges was accepted by the closing company and
was listed on the “Settlement Statement” as “Settlement
charges to the seller.” In addition, they were charged
$92,483.12 as a “Payoff of first mortgage loan.” This figure
was supplied to the closing company by AAMG through a
                     4
“Payoff Statement.” Included in this figure was a “Record


3
   Fed. R. Civ. P. 10(c) provides “[a] copy of any written instru-
ment which is an exhibit to a pleading is a part thereof for
all purposes.” See also Rosenblum v. Travelbyus.com Ltd., 299 F.
657, 660 (7th Cir. 2002).
4
  The actual figure supplied to the title company by AAMG
was $92,447.92, but with a provision that the amount would be
adjusted by a per diem interest rate of $17.60. If we add two
days of per diem interest added to the total supplied in the
                                                  (continued...)
No. 02-2801                                                  9

ing discharge/release of Lien Fee” of $10.00 as well as “Fax
Fees” of $15.00. Thus, the Weizeoricks allege they were
charged a total of $35.60, $10.00 paid to AAMG and $25.60
paid to the closing company, for the single service of
recording the release of the lien on their title.
  If we draw all reasonable inferences from these allega-
tions in the Weizeoricks’ favor, Scott v. O’Grady, 975 F.2d
366, 368 (7th Cir. 1992), the Weizeoricks have successfully
alleged a split of fees in violation of RESPA section 8(b).
Unlike Echevarria, there are three parties to this real estate
transaction: the Weizeoricks, AAMG and the closing
company. We can reasonably infer from the complaint
and attached documents that the closing company made
the payment of the $10.00 for the recording of the release
to AAMG from the pool of funds involved in the trans-
action. According to the documents, the closing company
also made a payment to the Weizeoricks that represented
their return on the sale of their house, less the closing
company’s recording fee. AAMG, therefore, allegedly re-
ceived a $10.00 split of the recording fee from the clos-
ing company, even though they did not record the release.
As AAMG notes, this case does differ slightly from
Christakos. AAMG, the named defendant here, is the
entity that received the unearned payment for allegedly
performing no service. In Christakos, it was the closing
company that had control over the funds and paid out
the fee split. However, this is a distinction without a
difference because the statute does not place liability on
only the entity who pays out the alleged kickback, but
instead places liability on both the giver and receiver of


4
  (...continued)
payoff statement, or $35.20, we arrive at the settlement state-
ment’s figure of $92,483.12.
10                                                 No. 02-2801
                          5
an unearned kickback. Therefore, the defendant in a
Section 8(b) cause of action need not be the party who
had control over the split fees, as long as a fee split is
alleged. Nor does the statute require that the plaintiff
allege that all of the parties involved in the fee splitting
have knowledge of their participation in, or a conspiracy
to join in, an illegal arrangement. Christakos, 196 F.R.D. at
503. The Weizeoricks’ allegation could be interpreted in a
way that AAMG is itself the third party involved in the fee
split, because AAMG accepted an allegedly unearned
portion of a recording fee from the title company, who
also kept part of the charged fee and actually performed
the service of recording the release. If this angle is pur-
sued, the district court will need to sort out any facts that
would substantiate such an interpretation.
  Pursuant to Section 8(b), the Weizeoricks must also al-
lege the fee was collected “other than for services actually
performed.” 12 U.S.C. § 2607(b). Because the Weizeroicks
allege that the title company, and not AAMG, recorded
the release of the lien, the $10.00 fee collected by AAMG
may have been unearned and therefore their complaint
satisfies the statutory requirement. However, on appeal,
the Weizeoricks conceded that AAMG prepared and
delivered the lien release to the title company. It is pos-
sible that AAMG’s $10.00 fee was incurred for the prepara-


5
   “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 . . . .” 12 U.S.C.
§ 2607(b). In addition to civil penalties, RESPA also estab-
lishes criminal sanctions for violations, including up to one
year in prison. These penalties provide that both the giver and
the acceptor of the unearned fees are jointly and severally li-
able. See 12 U.S.C. § 2607(d)(1)-(2).
No. 02-2801                                                11

tion or delivery of the release. It is also possible that AAMG
charged for that service elsewhere in the “Payoff State-
ment,” for example as a “Fax Fee.” Moreover it is not
entirely clear, based on the settlement statement, that the
Weizeoricks themselves paid for the entirety of the re-
cording fees. The buyer of the house was also charged
$71.00 in recording fees, according to the settlement state-
ment, a charge which may have also included the re-
lease fee. Every real estate closing is a unique series of
fees, payments and other monetary transactions between
at least one lender, a buyer, a seller and a closing com-
pany which raises numerous individualized questions just
like these. However, those and any related questions are
better answered through discovery, because if we confine
our review to the complaint, the Weizeoricks have suc-
cessfully alleged that a third party to their real estate
transaction accepted a portion of a fee that was unearned
in violation of 12 U.S.C. § 2607(b).


                             IV.
  In conclusion we find that the district court erred in
denying the Weizeoricks’ RESPA claim based on the court’s
conclusion that the Weizeoricks failed to plead that
AAMG controlled the settlement process and knew that
the title company was recording the release of mortgage.
Neither is an element of a claim under 12 U.S.C. § 2607(b).
The dismissal of the Weizeoricks’ RESPA claim with
prejudice is therefore REVERSED and REMANDED for fur-
ther proceedings.
12                                           No. 02-2801

A true Copy:
       Teste:

                       _____________________________
                       Clerk of the United States Court of
                         Appeals for the Seventh Circuit




                USCA-02-C-0072—7-24-03
