Chicago Title Ins. Co. v. Prosch
| Decision Date | 26 January 2011 |
| Docket Number | CIVIL ACTION NO. 08-00204-CG-C |
| Parties | CHICAGO TITLE INSURANCE COMPANY, as assignee of WASHINGTON MUTUAL BANK Plaintiff, v. GERALD LLOYD PROSCH, Defendant. |
| Court | U.S. District Court — Southern District of Alabama |
This matter is before the court on plaintiff's motion for summary judgment. (Doc. 50), defendant's opposition thereto (Doc. 64), and plaintiffs reply (Doc. 68). For the reasons that will be explained below, the court finds that summary judgment is due to be granted in favor of plaintiff.
Plaintiff's amended complaint asserts seven counts against defendant, Gerald Lloyd Prosch: I) unjust enrichment, II) equitable subrogation, III) constructive trust, IV) breach of statutory warranty of title, V) breach of express warranty of title, VI) negligence, VII) wantonness, and VIII) indemnity. (Amended Complaint, Doc. 29). The parties generally do not dispute the underlying facts in this case, but dispute their legal significance. (See Doc. 64, ¶ 2).
Defendant owned Lot 4, Cothran Oaks, ("the property") encumbered by a note and mortgage in favor of Colonial Bank. In August 1999, defendant sold the property, via a vendor'slien deed1, to Lawanda and Travis Mathews. (Doc. 52-3). Travis Mathews executed a quitclaim deed in Lawanda Mathews' favor on November 27, 2001. (Doc. 52-4). In April 2002, defendant agreed to sell the property to Lawanda Mathews and he cancelled the vendor's lien. (Doc. 52-5). Lawanda Mathews financed her purchase of the property with a note and mortgage on the property with Worthington Mortgage Group, Inc. (Doc. 52-6). The sale from defendant to Lawanda Mathews closed on April 19, 2002. (Doc. 52-6). Defendant did not attend the closing, but testified that he received a check from the closing for about $90,000.00 and that, although he owed money to the mortgage company on the property, he did not use any of that money to pay off the loan. (Doc. 52-7, pp. 5-6). According to defendant, he owned numerous properties at the time and he did not realize until later, when the title company contacted him, that the check he had received for this property was more than his equity in the property and that the loan had not been paid off. (Doc. 5207, p. 6). Defendant admitted at his deposition that he was not entitled to all of the $90,000.00 he was paid for the property. (Doc. 52-7, p. 6).
On October 18, 2003, Lawanda Mathews refinanced the Worthington Mortgage with Washington Mutual Bank. (Doc. 52-8). Plaintiff, Chicago Title, issued a title insurance policy on the mortgage loan of October 18, 2003. (Doc. 52-9).
In 2006, defendant filed a civil action in Jefferson County, Alabama, against Washington Mutual, Colonial Bank, and other parties, asserting that they had failed to apply or had misapplied payments on existing mortgages, they had misrepresented and suppressed factsregarding how the payments would be applied, they had reported an adverse action to national credit reporting agencies, and had begun foreclosure proceedings to collect debts that were not owed. (Doc. 65-1). Colonial Bank filed a counter claim asserting that defendant has defaulted on some of his notes and mortgages including the mortgage on Lot 4, Cothran Oaks. (Doc. 64-3). Washington Mutual reportedly did not file any counterclaims in this 2006 action.
Colonial Bank foreclosed on the property in February 2008. (Doc. 52-10). Because Washington Mutual's interest in the property was impaired, it pursued a claim on the title insurance policy issued by Chicago Title, and Washington Mutual assigned all claims and causes of action against defendant over to Chicago Title. (Doc. 52-9). Chicago Title paid Washington Mutual the sum of $84,975.95 to satisfy Washington Mutual's claim. (Doc. 52-9).
Federal Rule of Civil Procedure 56(c) provides that summary judgment shall be granted: "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." The trial court's function is not "to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). "The mere existence of some evidence to support the non-moving party is not sufficient for denial of summary judgment; there must be 'sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party.'" Bailey v. Allgas, Inc., 284 F.3d 1237, 1243 (11th Cir. 2002) (quoting Anderson, 477 U.S. at 249). "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson, at 249-250. (internal citations omitted).
The basic issue before the court on a motion for summary judgment is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." See Anderson, 477 U.S. at 251-252. The moving party bears the burden of proving that no genuine issue of material fact exists. O'Ferrell v. United States, 253 F.3d 1257, 1265 (11th Cir. 2001). In evaluating the argument of the moving party, the court must view all evidence in the light most favorable to the non-moving party, and resolve all reasonable doubts about the facts in its favor. Burton v. City of Belle Glade, 178 F.3d 1175, 1187 (11th Cir. 1999). "If reasonable minds could differ on the inferences arising from undisputed facts, then a court should deny summary judgment." Miranda v. B&B Cash Grocery Store, Inc., 975 F.2d 1518, 1534 (11th Cir. 1992) (citing Mercantile Bank & Trust v. Fidelity & Deposit Co., 750 F.2d 838, 841 (11th Cir. 1985)).
Once the movant satisfies his initial burden under Rule 56(c), the non-moving party "must make a sufficient showing to establish the existence of each essential element to that party's case, and on which that party will bear the burden of proof at trial." Howard v. BP Oil Company, 32 F.3d 520, 524 (11th Cir. 1994)(citing Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986)). Otherwise stated, the non-movant must "demonstrate that there is indeed a material issue of fact that precludes summary judgment." See Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). The non-moving party "may not rest on the mere allegations or denials of the [non-moving] party's pleading, but.... must set forth specific facts showing that there is agenuine issue for trial." Fed. R. Civ. P. 56(e) "A mere 'scintilla' of evidence supporting the [non-moving] party's position will not suffice; there must be enough of a showing that the jury could reasonably find for that party." Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir. 1990) (citation omitted). "[T]he nonmoving party may avail itself of all facts and justifiable inferences in the record taken as a whole." Tipton v. Bergrohr GMBH-Siegen, 965 F.2d 994, 998 (11th Cir. 1992). "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574 at 587 (1986) (internal quotation and citation omitted).
Plaintiff asserts that defendant was unjustly enriched by receiving sums at the closing of the Worthington Mortgage that should have been paid to satisfy the Colonial Mortgage. Defendant has admitted that he was not entitled to all of the proceeds he received from the sale of the property in 2002 and that none of the funds he received were paid towards the loan. The evidence also indicates that defendant's failure to satisfy the Colonial Mortgage resulted in the impairment of Washington Mutual's interest in the property and ultimately in Chicago Title paying Washington Mutual's claim in the amount of $84,975.95. Under these facts, plaintiff asserts that it is also entitled to equitable subrogation against the defendant for the impairment to Washington Mutual's interest in the property. Plaintiff further asserts that defendant had a duty to satisfy the Colonial mortgage when he received the sums from the closing of the Worthington mortgage and that he negligently and wantonly breached that duty and thereby injured Chicago Title.
Defendant opposes the summary judgment motion by asserting that plaintiffs claims were compulsory counterclaims that should have been asserted in the 2006 Jefferson County litigation. Defendant contends that because plaintiff failed to raise the claims in the 2006 litigation the claims are barred by the doctrines of collateral estoppel and/or res judicata. Defendant further asserts that plaintiffs claims are barred by laches, the applicable statute of limitations, unclean hands and because plaintiff has failed to join an indispensible party.
"Res judicata, or claim preclusion, bars a party from relitigating a cause of action that was, or could have been, raised in a previous suit between the parties that resulted in a final judgment on the merits." Sherrod v. School Bd. of Palm Beach County, 2008 WL 926400, * 1 (11th Cir. April 7, 2008) (citing In re Piper Aircraft Corp., 244 F.3d 1289, 1296 (11th Cir. 2001)). "A party seeking to invoke res judicata must satisfy four elements: '(1) the prior decision must have been rendered by a court of competent jurisdiction; (2) there must have been a final judgment on the merits; (3) both cases must involve the same parties or their privies; and (4) both cases must involve the same causes of action.'" Id. (quoting In re Piper Aircraft supra). Plaintiff asserts that res judicata does not apply to this case because the cases do not involve the same causes of action. "Res judicata acts as a bar 'not only to the precise legal theory presented in the previous...
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