Papunen v. Bay Nat'l Title Co.

• Decision Date: 20 February 2019
• Docket Number: No. 3D17-938,3D17-938
• Citation: 271 So.3d 1108
• Parties: Matt PAPUNEN, Appellant, v. BAY NATIONAL TITLE COMPANY, Appellee.
• Court: Florida District Court of Appeals

271 So.3d 1108

Matt PAPUNEN, Appellant,

v.BAY NATIONAL TITLE COMPANY, Appellee.

No. 3D17-938

District Court of Appeal of Florida, Third District.

Opinion filed February 20, 2019

Rehearing Denied March 19, 2019

The Orlofsky Law Firm, P.L., and Alexander S. Orlofsky, for appellant.

Boyd Richards Parker & Colonnelli, P.L., and W. Todd Boyd and Gissell Jorge, for appellee.

Before SALTER, LINDSEY and HENDON, JJ.

SALTER, J.

Matt Papunen ("Buyer") appeals a final order dismissing with prejudice his complaint against Bay National Title Company ("Bay National").¹ The Buyer alleged that although Bay National confirmed at closing Seller's title and the absence of post-foreclosure appellate or other legal challenges to the Seller's title, Bay National's title examination negligently missed a post-judgment, duly-docketed motion to vacate the foreclosure judgment and challenge the Seller's title.

We reverse the order of dismissal with prejudice, and remand for further proceedings.

Facts and Proceedings Below

The case below arises from the sale of a residence by a lender following the foreclosure of a mortgage on the residence and the issuance of a certificate of title to the lender. The lender, through its attorney-in-fact JPMorgan Chase Bank, National Association ("Seller"), then placed the property for sale.

The Buyer and Seller entered into an "Indemnity and Hold Harmless Release" (the "Release") signed and notarized by Buyer on June 19, 2015. The form identified as "Seller Releasees" the Seller, Bay National, their respective "parent and subsidiary and affiliate companies," and the "present and former officers, directors, agents, employees, stockholders, owners, members, managers, attorneys, predecessors, successors, assigns, insurers and servicing agents of each such entity."

The recitals, disclosures, and terms of the Release identified various risks: "the Property may have Occupants or Claimants occupying the Property," and there might be agreements or rent concessions relating to any such Occupant or Claimant. The Release also addresses the possibility of rent control violations, unrecorded prepaid rent, or security deposits with tenants that might not be transferred as part of the sale. Finally, the Release addresses the condition of the property being sold, with the Seller disclaiming liability for damages that might be caused by repairs or alterations to the property by an occupant prior to the closing.

Other provisions of the Release pertain to post-closing claims of the former owner:

WHEREAS ... The delivery of possession shall be subject to the rights of any Occupants or Claimants and any right of confirmation, redemption or similar legal right of the former owner, its successors and assigns. Seller shall not be required to bring any action to evict, relocate, dispossess or determine the rights of any Occupant or Claimant before, on or after closing. The existence of any Occupants or Claimants, or claims by such persons, shall not give right to any rights to terminate the Agreement by Buyer or to give Buyer the right to raise any objection to Seller's title.

....

In consideration of Seller's agreement to proceed with the closing of the sale of the Property to Buyer, and Closing Agent's agreement to conduct the Closing of the sale of the Property notwithstanding the aforementioned items, Buyer hereby agrees as follows:

....

2. Buyer agrees to release, indemnify, defend, and forever hold the Seller Releasees harmless in all respects from and against any manner of action, cause of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bill, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, interest, penalties, damages, judgments, executions, claims and demands whatsoever, in law or in equity, arising out of, in connection with or relating to the occupancy of the property or the sale of the Property to Buyer.

....

4. It is the intent of Buyer, and Seller that this Release survive any closing of the sale of the Property to Buyer.

A week after the Release was executed and delivered, the Buyer and the Seller entered into a standard form of " ‘As Is’ Residential Contract for Sale and Purchase" (the "Contract"). Although Bay National was a designated "Seller Releasee" in the Release executed by the Seller and Buyer a week earlier, the Contract specified that the Seller would deliver and pay for an owner's title policy to be issued to the Buyer "insuring Buyer's marketable title to the Real Property," subject only to six types of exceptions typical in such transactions, including land use matters, plat restrictions, mineral rights of record, unplatted public utility easements of record, taxes for the year of closing and subsequent years, and assumed and purchase money mortgages. The Contract provisions did not include an exception for certain docketed filings in the foreclosure case: a notice of appeal, or a motion to vacate or set aside the final judgment and foreclosure sale through which the Seller had obtained title.

The Seller and Buyer closed the sale transaction on July 24, 2015. In conformance with the terms of the Contract, the Seller and Bay National delivered a markup of an earlier title insurance commitment issued and signed by Bay National. Bay National marked up Schedule B, Section 1, of the commitment to confirm that requirement 10 had been satisfied:

Issuing agent must request from the [insurer, Fidelity National Title Insurance Company] (or perform themselves) an update and

...