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Chicago Title Ins. Co. v. Suburban Title & Abstract, Inc.

United States District Court, D. New Jersey

August 15, 2018

SUBURBAN TITLE & ABSTRACT, INC., et al., Defendants.


          WILLIAM J. MARTINI, U.S.D.J.

         Plaintiff Chicago Title Insurance Company (“Plaintiff”) brings this action against Defendants Suburban Title & Abstract, Inc. (“Suburban”), Jeannet Pavez (“Pavez”), Richard Renna (“Renna”), and the Estate of John DiMaria Jr. (“DiMaria” or the “Estate” and collectively, “Defendants”) over Defendants' alleged failure to perform its contractual obligations as to three real estate transactions.[1] Before the Court is the Estate's motion to dismiss. There was no oral argument. Fed.R.Civ.P. 78(b). For the reasons below, the Estate's motion is GRANTED. Plaintiff's Amended Complaint (the “Complaint”) is DISMISSED WITHOUT PREJUDICE.

         I. BACKGROUND

         The Court accepts as true the factual allegations contained in the complaint, considers any “document integral to or explicitly relied upon in the complaint, ” and draws all reasonable inferences therefrom in favor of the plaintiff. In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997) (citations omitted); see Phillips v. Cty. of Allegheny, 515 F.3d 224, 228 (3d Cir. 2008).

         In 1993, Plaintiff and Suburban entered into a contract (the “Agreement”) whereby Suburban processed title insurance applications on Plaintiff's behalf. Am. Compl. ¶¶ 8-9, ECF No. 16 [hereinafter “Compl.”]. Per the Agreement, Suburban would indemnify and hold Plaintiff harmless for losses arising from any improper closing Suburban performed. Id. ¶ 10. Examples included a loss or misapplication of customer funds or documents and a failure to follow escrow or closing instructions. Id.

         At or around the same time in 1993, Defendants Renna and DiMaria executed a personal guaranty (the “Guaranty”). Id. ¶ 11. Under the Guaranty, Renna and DiMaria agreed to indemnify Plaintiff for any losses related to Suburban's performance obligations under the Agreement. Id. ¶ 12.

         This action stems from three real estate transactions involving Plaintiff, Defendants, and AmTrust Bank (the non-party “Bank”), in which Plaintiff suffered losses. In each instance, the Bank issued and funded the borrowers' loans on the condition that each borrower brought a specified down payment of funds at closing. Id. ¶¶ 16, 25, 33. As the settlement agent, before the closing occurred, Suburban issued the Bank a closing service letter. Id. ¶¶ 18, 27, 35. The letters indicated that if Suburban failed to comply with the Bank's closing instructions or otherwise committed fraud or misapplied funds, then Plaintiff could be liable for any actual loss the Bank suffered. Id.

         As to what transpired next, Plaintiff relies entirely on a pleading filed in a separate civil action that was before this Court. In the other matter, the Federal Deposit Insurance Corporation (“FDIC”), acting as the Bank's Receiver, filed suit against Plaintiff. See FDIC v. Chicago Title Ins. Co., Civ. No. 15-8400-WJM-MF, ECF No. 1 [hereinafter the “FDIC Action” or “FDIC Complaint”]. No. adjudication on the merits took place in the FDIC Action, such as through dispositive motion practice. Instead, the parties settled and stipulated to dismissing the action with prejudice. See id., ECF Nos. 65, 66.

         Based on the FDIC Complaint, Plaintiff alleges Suburban and Pavez violated the Bank's closing instructions. Apparently quoting from the FDIC Complaint without attribution, Plaintiff claims Suburban and Pavez closed the relevant transactions even though neither received the required down payment of funds nor told the Bank about the missing funds. Compl. ¶¶ 20, 28, 36. Further, Suburban and Pavez issued falsified and inaccurate Federal Housing and Urban Development (“HUD”) settlement documents. Id. ¶¶ 21, 29, 37. Thus, Suburban violated the Agreement and the Estate's failure to indemnify Plaintiff under the Guaranty's terms constituted breach.[2]

         The Estate now moves to dismiss on two grounds: (1) the Court lacks personal jurisdiction because the Estate is a South Carolina entity, having never conducted any business in New Jersey, and (2) the applicable statute of limitations under South Carolina law makes Plaintiff's claims time-barred. See Def.'s Br. at 1-4.

         Plaintiff opposes, arguing DiMaria's ownership interest in Suburban permits this Court to exercise jurisdiction over the Estate. See Pl.'s Mem. of Law in Opp'n (“Pl.'s Mem.”) 7- 10, ECF 29. Plaintiff next argues the claims are timely because the causes of action accrued either when the FDIC filed suit or when Plaintiff made a loss payment to settle the FDIC Action. Id. at 11. In reply, the Estate reiterates its original arguments, adding three additional points. First, there is no Estate to sue because DiMaria's will was never probated. Second, even if DiMaria's death created an Estate, the statute of limitations stills bars Plaintiff's claims. Third, any shares of Suburban stock DiMaria owned “were pledges back to Suburban as part of another lawsuit” and “were never part of any estate . . . .” See Decl. of Robert J. Greenbaum, Esq. 1-2, ECF No. 30.


         Absent a court hearing, a plaintiff bears the burden to make out a prima facie case establishing personal jurisdiction. Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324, 330 (3d Cir. 2009). Like in a Rule 12(b)(6) setting, a court must “accept the plaintiff's allegations as true, and is to construe disputed facts in favor of the plaintiff.” Id. (citing Toys “R” Us, Inc. v. Step Two, S.A., 318 F.3d 446, 457 (3d Cir. 2003)). “A federal court sitting in New Jersey has jurisdiction over parties to the extent provided under New Jersey law.” Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 96 (3d Cir. 2004) (citations omitted). “New Jersey's long-arm statute provides for jurisdiction coextensive with the due process requirements of the United States Constitution.” Miller Yacht Sales, Inc., 384 F.3d at 96 (citing N.J. Court Rule 4:4-4(c)). That means parties with “constitutionally sufficient ‘minimum contacts' with New Jersey are subject to suit there.” Miller Yacht Sales, Inc., 384 F.3d at 96 (citation omitted).

         III. ...

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