Opinion
CV176024608
08-28-2019
FIDELITY NATIONAL TITLE INSURANCE COMPANY v. Robert VONTELL, Jr., et al.
UNPUBLISHED OPINION
STEVENS, J.
STATEMENT OF THE CASE
The operative amended complaint in this action is dated April 2, 2019, and was filed by the plaintiff, Fidelity National Title Insurance Company (Fidelity) against the defendants, Robert J. Vontell, Jr. and Bonnie Anne Vontell (together as the Vontells) and the defendant, Robert C. Agatston. The amended complaint asserts one count against the Vontells for unjust enrichment, and three counts against Agatston for claims characterized as "indemnity grounded on negligence under subrogation rights," "indemnity grounded on breach of [an] agency agreement" and "indemnity grounded on breach of an agreement under subrogation rights."
The Vontells filed a cross complaint against Agatston for indemnification grounded in tort on November 20, 2018. The cross complaint makes the following allegations. In or about 2004, the Vontells owned investment properties, including 14 Massachusetts Avenue, Fairfield, Connecticut (Massachusetts Avenue property) and 204 Olivia Street, Derby, Connecticut (Olivia Street property). The Massachusetts Avenue property held a mortgage securing a loan owed to Wachovia Bank, N.A. This loan was assigned to Wells Fargo Bank, N.A.
In December 2005, the Vontells approached an entity named Pequot Financial Group, Inc. (Pequot) in order to refinance the Massachusetts Avenue mortgage. Pequot contacted Fremont Investment & Loan (Fremont) to accomplish the refinancing. The Vontells retained Agatston as their attorney for the refinancing. The Vontells allege that Pequot gave Fremont and Agatston the wrong loan number. Specifically, rather than giving Fremont and Agatston the loan number for the Massachusetts Avenue mortgage, Pequot gave them a loan number associated with another mortgage also held by Wachovia on the Olivia Street property.
Subsequently, Fremont approved a $308,000 refinancing loan to the Vontells to be secured by a first mortgage on the Massachusetts Avenue property. Fidelity was retained to provide title insurance for the refinanced loan with Fremont as the insured, and Agatston was retained as Fidelity’s title insurance agent. In January 2006, Agatston used the wrong loan number when he requested the payoff statement for the Massachusetts Avenue mortgage so rather than acquiring the correct payoff statement, he acquired a payoff statement for the Olivia Street mortgage. In short, the loan proceeds advanced by Fremont and intended to be used to pay off the Massachusetts Avenue mortgage were mistakenly used to pay off the Olivia Street mortgage.
According to the cross complaint, Agatston closed the Fremont mortgage and disbursed the funds in violation of the closing instructions because he did not verify that Fremont would be in the first lien position. About eighteen months later in July 2007, Agatston realized the mistake with the loan numbers when he inquired as to why Wells Fargo still had not released the mortgage on the Massachusetts Avenue property. Agatston sent a letter dated November 30, 2007, to the Vontells relating to the unreleased mortgage on the Massachusetts Avenue property. The Vontells responded that it was Agatston’s problem to figure out. The Vontells further allege that Agatston did not tell them that the mortgage was not paid off because the wrong loan number was used. The Vontells continued to make the monthly payments on the Massachusetts Avenue mortgage until December 2011. In August 2012, the Vontells quitclaimed their interest in the Olivia Street property.
In April 2013, the Vontells were interested in selling the Massachusetts Avenue property, and their attorney for that sale advised that the first mortgage held by Wells Fargo, as well as a second mortgage held by Fremont, were both on the property. The Vontells were informed by Fidelity that under these circumstances, the title insurance policy would protect the rights of Fremont, the insured lender, and not the Vontells, the owners of the property. Fidelity reached a settlement agreement to acquire satisfaction and release of Wells Fargo’s mortgage on the Massachusetts Avenue property, and as stated above, Fidelity instituted this action against the Vontells claiming that they were unjustly enriched by this settlement payment.
The Vontells allege that Agatston was negligent in that he failed to determine that the wrong loan number was being used for the payoff of the Massachusetts Avenue mortgage, failed to use the proceeds of the Fremont mortgage to pay off this mortgage, failed to ensure that Fremont was in the first loan position before closing the Fremont mortgage, and failed to properly issue the title insurance policy. The Vontells further allege that the negligence of Agatston was what caused Fidelity to suffer a detriment, and they did not know of Agatston’s negligence, nor did they have reason to anticipate his negligence. The Vontells seek "indemnification" from Agatston for any damages they may he ordered to pay Fidelity.
On January 24, 2019, Agatston filed a motion to strike the Vontells’ cross complaint on the ground that it did not state a cognizable cause of action. The Vontells filed a brief opposing Agatston’s motion to strike on February 22, 2019. The court heard oral argument on this matter on May 6, 2019. For the following reasons, Agatston’s motion to strike is granted.
DISCUSSION
"The purpose of a motion to strike is to contest ... the legal sufficiency of the allegations of any complaint ... to state a claim upon which relief can be granted." (Internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498, 815 A.2d 1188 (2003). "A motion to strike shall be used whenever any party wishes to contest ... (5) the legal sufficiency of any answer to any complaint, counterclaim or cross complaint, or any part of that answer including any special defense contained therein." Practice Book § 10-39(a). "[A] motion to strike challenges the legal sufficiency of a pleading and, consequently, requires no factual findings by the trial court ... [The court] construe[s] the complaint in the manner most favorable to sustaining its legal sufficiency ... Thus, [i]f facts provable in the complaint would support a cause of action, the motion to strike must be denied ... Moreover, [the court notes] that [w]hat is necessarily implied [in an allegation] need not be expressly alleged ... It is fundamental that in determining the sufficiency of a complaint challenged by a defendant’s motion to strike, all well-pleaded facts and those facts necessarily implied from the allegations are taken as admitted ... Indeed, pleadings must be construed broadly and realistically, rather than narrowly and technically." (Internal quotation marks omitted.) Geysen v. Securitas Security Services USA, Inc., 322 Conn. 385, 398, 142 A.3d 227 (2016).
In support of his motion to strike, Agatston argues that Fidelity has not asserted any negligence on the part of the Vontells and that such an assertion is necessary for the Vontells to assert a claim for common-law indemnification against him. Moreover, Agatston argues that the duty he owes to Fidelity is not identical to the duty that the Vontells owe to Fidelity and, therefore, they are not jointly or severally liable to Fidelity for the purposes of any indemnification claim. In response, the Vontells argue that Fidelity needs only to allege some negligence on the part of the Vontells in order for the Vontells to bring the common-law indemnification claim against Agatston. They argue that Fidelity did allege some negligence because one of the claims that supports the unjust enrichment allegation is the Vontells’ alleged breach of a "tortious" duty. The court agrees with Agatston. The Vontells have misconstrued the nature of indemnification under Connecticut common law. The Vontells may have had a direct claim of negligence against Agatston, but they do not have a common-law claim for indemnification against him on the basis of the allegations of their cross claim.
"[A]n action for indemnification is one in which one party seeks reimbursement from another party for losses incurred in connection with the first party’s liability to a third party ... Where a party seeks restitution in the form of common-law indemnification, several authorities agree that the party seeking indemnity and the party from whom indemnification is sought must be considered jointly and severally liable for the loss incurred by the putative indemnitee." (Citations omitted; internal quotation marks omitted.) Chicago Title Ins. Co. v. Accurate Title Searches, Inc., 173 Conn.App. 463, 480-81, 164 A.3d 682 (2017).
"[O]ur courts have repeatedly stated that the party asserting a claim for common-law indemnification must be found to be chargeable with some degree of negligence in the underlying action as a necessary predicate for sustaining such a claim." Id., 482. "[A]s long as the plaintiffs were chargeable with some negligence ... and as long as that negligence was not active or primary ... the plaintiffs are not precluded from recovering under common-law indemnification." (Emphasis omitted; internal quotation marks omitted.) Id., 482-83.
"[C]ommon-law indemnity involves more than just two parties committing negligence resulting in harm or injury to a third party, with one tortfeasor being unaware of the other’s negligence and being induced by the other’s conduct. Common-law indemnity exists when two parties owe identical duties to a third party for which they are jointly and severally liable, and one party, the indemnitee, seeks restitution from the other, the indemnitor, for the former’s payment satisfying the joint obligation." Maxwell v. Bozelko, Superior Court, judicial district of Ansonia-Milford at Derby, Docket No. CV-11-6006411-S (June 30, 2017, Stevens, J.); accord, Chicago Title Ins. Co. v. Accurate Title Searches, Inc., supra, 173 Conn.App. 489 ("[t]he mere fact that a plaintiff’s damages arose in connection with its contractual liability to a third party does not relegate the plaintiff to a claim for common-law indemnification, especially where ... the plaintiff was not passively negligent for its losses"). "[A] loss in the context of indemnity is the payment that discharges a liability ..." Maxwell v. Bozelko, supra, Superior Court, Docket No. CV-11-6006411-S. Consequently, "indemnity applies only where there is an identical duty owed by one and discharged by another." (Internal quotation marks omitted.) Chicago Title Ins. Co. v. Accurate Title Searches, Inc., supra, 173 Conn.App. 481.
In the present case, the Vontells’ common-law indemnification claim fails because (1) the Vontells and Agatston did not owe an identical duty to Fidelity, (2) the Vontells and Agatston were not jointly and severally liable to Fidelity, and (3) the underlying claim against the Vontells is not premised on negligence. The pleadings in this case show that the Vontells and Agatston owed separate and distinct duties to Fidelity. Agatston was Fidelity’s closing agent on the Fremont mortgage. In this capacity, Agatston had a duty to ensure that the Massachusetts Avenue mortgage was paid off and that Fremont would have the first lien position being insured by Fidelity’s title insurance policy. The Vontells’ liability to Fidelity stems from the payment Fidelity made, pursuant to its title insurance policy, to satisfy the loan the Vontells owed to Wells Fargo when the funds to satisfy this loan were advanced but were used for another purpose to the Vontells’ benefit. Thus, the Vontells’ liability is premised on a responsibility or obligation entirely separate and distinct from that of Agatston, and Fidelity’s payment did not create an obligation on the part of the Vontells and Agatston that may be characterized as joint and several.
Moreover, the specific allegations of the Vontells’ cross claim fail to articulate the existence of any underlying negligence being asserted against them by Fidelity. Although in some cases an unjust enrichment claim may involve some type of negligence, the general rule is that "[u]njust enrichment applies wherever justice requires compensation to be given for property or services rendered under a contract, and no remedy is available by an action on the contract." Rent-A-PC, Inc. v. Rental Management, Inc., 96 Conn.App. 600, 604, 901 A.2d 720 (2006). Even reading the cross claim broadly, its allegations do not reflect that Fidelity’s unjust enrichment claim is premised on any specific allegation of negligence charged against the Vontells. As previously stated, the law is established that "the party asserting a claim for common-law indemnification must be found to be chargeable with some degree of negligence in the underlying action as a necessary predicate for sustaining such a claim." Chicago Title Ins. Co. v. Accurate Title Searches, Inc., supra, 173 Conn.App. 482.
CONCLUSION
For these reasons, the court grants Agatston’s motion to strike the Vontells’ cross claim for common-law indemnification.
So ordered the 28th day of August 2019.