United States District Court, D. New Jersey
L. WOLFSON, UNITED STATES DISTRICT JUDGE.
matter comes before the Court on Defendant Chicago Title
Insurance Company's (“Defendant” or
“Chicago Title”) Motion for judgment on the
pleadings, pursuant to Federal Rule of Civil Procedure 12(c),
on Plaintiff 21st Mortgage Corporation's
“21stMortgage”) claims for declaratory
relief and negligence against Defendant, on the basis that
these claims are time-barred. For the reasons set forth
below, Defendant's Motion is GRANTED.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
21st Mortgage and Defendant Chicago Title are
corporations that have principle places of business in
Tennessee and Florida, respectively. Second Amended Complaint
(“SAC”), ¶¶ 1-2. Defendant Closers on
Call, LLC (“COC”) (COC with Chicago Title
together, “Defendants”) is a limited liability
company which allegedly served as an authorized agent for
Chicago Title in 2008. Id. ¶ 3.
2008, Wells Fargo, N.A. (“Wells Fargo”) loaned
$279, 000.00 to Carlos Merchan (“Merchan”), for
purchase of the real property located at 1 Longfield Road,
New Brunswick, New Jersey (“Property”) from
Richard Adams and Vivian Adams (“Sellers”),
Id. ¶¶ 5-6. Merchan, in exchange, provided
Wells Fargo with a mortgage on the Property (“Merchan
Mortgage”), which transaction was recorded with the
Middlesex County Clerk on November 10, 2008. Id.
Fargo purportedly obtained title insurance from Chicago
Title's alleged former agent, COC. Id.
¶¶ 7-8. In connection therewith, Wells Fargo
provided COC with Supplemental Loan Closing Instructions,
requiring the “cancellation or disposition” of
two prior mortgages encumbering the Property, for the purpose
of ensuring that the Wells Fargo Mortgage was a “valid
first lien.” Id. ¶¶ 10, 12.
Specifically, the two prior mortgages included: (1) a
mortgage from the Sellers to Central Jersey Federal Credit
Union (“Central Jersey”), dated October 26, 2005,
recorded on November 23, 2005 (“Central Jersey
Mortgage”); and (2) a Mortgage from the Sellers to
Mortgage Electronic Registrations Systems, Inc. as Nominee
for EquiFirst Corporation (“Equifirst”), dated
April 26, 2006, which was recorded on May 24, 2006
(“Equifirst Mortgage”). Id. ¶ 10.
COC ultimately prepared a Settlement Statement, dated August
14, 2008, indicating that COC complied with the Supplemental
Loan Instructions by paying off the Central Jersey and
Equifirst Mortgages and, additionally, issued a title
insurance commitment and closing service letter on behalf of
Chicago Title, with a Loan Policy in the amount of $279, 000.
Id. ¶¶ 9, 12-16. However, notwithstanding
COC's allegedly false representations, the Wells Fargo
Mortgage did not become the first priority lien. Id.
November 1, 2008, the Merchan Mortgage allegedly entered
default. Id. ¶ 16. On February 25, 2009, Wells
Fargo filed a foreclosure action in the Superior Court of New
Jersey, Middlesex County, Chancery Division, following which
Final Judgment was entered in favor of Wells Fargo on July 9,
2010. Id. ¶ 16. On September 9, 2016, Wells
Fargo assigned the Final Judgment to 21st
Mortgage. Id. ¶ 18.
COC's assurances, Central Jersey also asserted an
interest in the Property and filed a foreclosure action.
Id. ¶ 19. Wells Fargo, in turn, submitted a
notice of claim for title insurance coverage to Chicago
Title; however, in a letter, dated March 17, 2010, Chicago
Title denied Wells Fargo's request, on the basis
that COC was not authorized to provide Wells Fargo with the
2008 title insurance policy:
Upon further investigation, the Company has discovered that
the relationship between Closers on Call and the Company had
been terminated on or about June 21, 2008. A final audit of
all outstanding transactions of this agent was completed on
or about July 25, 2008, and policies were issued on these
transactions. Since the transaction closed on August 14,
2008, after the final audit, Closers on Call was not an agent
of the Company at the time of closing, and therefore, lacked
the authority to issue a policy. Accordingly, the Company
respectfully denies liability for this matter.
Id. ¶ 20; Answer, Ex. 4. Indeed, there is no
dispute that Wells Fargo was on notice that Chicago Title
disclaimed coverage based on the fact that COC was not its
on November 15, 2015, Equifirst asserted an interest in the
Property and filed an action to quiet title, subsequent to
which 21st Mortgage, as an assignee of Wells
Fargo, submitted a second notice of claim for title insurance
coverage on October 13, 2016. Id. ¶¶ 22-23,
25. The notice of claim included the results of a Foreclosure
Search Report, indicating that Equifirst obtained a
Sheriff's Deed for the Property, dated May 13, 2009,
recorded on July 24, 2009. Id. ¶¶ 23-24.
However, Chicago Title denied the second notice of claim, for
the same reason which Chicago Title denied Wells Fargo's
first request for title insurance coverage- COC was not
Chicago Title's authorized agent at the relevant time.
Id. ¶ 26.
April 5, 2017, 21st Mortgage brought this action
against Defendants, arising from Chicago Title's denial
of Plaintiff's second request for title insurance
coverage in connection with the Equifirst Mortgage. On
September 19, 2017, 21st Mortgage filed an Amended
Complaint, wherein it seeks declaratory relief in Count I,
regarding its rights and Chicago Title's obligations
pursuant to the disputed title policy. Id.
¶¶ 27-35. The Amended Complaint also asserts the
following claims against Defendants: negligence (Count II);
fraud (Count III); consumer fraud (Count IV); conversion
(Count V); and an intended beneficiary claim (Count VI).
Id. ¶¶ 36-74.
Chicago Title moves for judgment on the pleadings, arguing
that Plaintiff's request for declaratory relief and claim
of negligence are barred by their respective statute of
limitations. Plaintiff opposes the motion.