Rtc Mortg. Trust 1994 N-1 v. Fidelity Nat. Title
| Citation | 58 F.Supp.2d 503 |
| Decision Date | 29 July 1999 |
| Docket Number | No. CIV.A. 96-5874.,CIV.A. 96-5874. |
| Court | United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey |
| Parties | RTC MORTGAGE TRUST 1994 N-1, a limited liability Delaware business trust, Plaintiff, v. FIDELITY NATIONAL TITLE INSURANCE COMPANY, Nations Title Insurance Of New York, Eastern Developers Abstract, Inc., Caine, Dipasqua, Sloane & Raffaele f/k/a Caine, DiPasqua, Sloane, Raffaele & Nigro, Lawyers Title Insurance Corporation, and Rocco M. Nigro, Defendants. |
John A. Adler, Hellring, Lindeman, Goldstein & Siegal, L.L.P., Newark, NJ, for Plaintiff, RTC Mortgage Trust 1994 N-1.
John P. O'Toole, Wilson, Elser, Moskowitz, Edelman & Dicker, L.L.P., Newark, NJ, for Defendant, Caine, DiPasqua, Sloane & Raffaele.
Charles J. Vinicombe, Drinker, Biddle & Reath, L.L.P., Princeton, NJ, for Defendant, Lawyers Title Insurance Corp.
Josiah A. Knapp, Tomar, Simonoff, Adourian, O'Brien, Kaplan, Jacoby & Graziano, P.C., Cherry Hill, NJ, for Defendants, Fidelity National Title Insurance Company and Nations Title Insurance of New York.
Rocco M. Nigro, Media, PA, pro se.
I. INTRODUCTION .................................................................... 507
II. BACKGROUND ...................................................................... 509
III. LEGAL STANDARD GOVERNING MOTIONS FOR SUMMARY JUDGMENT ........................... 519
IV. DISCUSSION ...................................................................... 520
A. RTC Mortgage Trust's Motion for Partial Summary Judgment Against
Nigro and Caine, DiPasqua ................................................. 520
1. An Attorney's Duty to a Non-Client .................................. 521
2. Breach of Duty of Care Owed by Nigro to Home Federal ................ 522
3. Proximate Cause and Injury .......................................... 526
4. Respondeat Superior Liability ....................................... 529
B. FNTIC's and NTI's Motion for Summary Judgment ........................... 530
1. FNTIC Is Not Title USA's Successor .................................. 530
2. NTI's Motion for Summary Judgment ................................... 530
a. RTC Mortgage Trust's Claim Against NTI for Breach of the Title
Insurance Policy .................................................... 530
1) Legal Standard Governing Construction of Title Insurance
Policies ........................................................ 531
2) Title USA Did Not Breach the Title Insurance Policy ............... 532
b. RTC Mortgage Trust's Claim for Negligent Title Search Against
NTI ............................................................. 535
c. RTC Mortgage Trust's Claim for Negligent Hiring .................. 542
d. Statute of Limitations ........................................... 542
e. NTI's Request that this Court "Re-examine" its Holding in RTC
Mortgage Trust II ............................................... 545
f. Counsel Fees ..................................................... 547
C. LTIC's Motion for Summary Judgment ....................................... 548
V. CONCLUSION ......................................................................... 549
This case involves a failed savings and loan's claims for breach of contract, negligence and legal malpractice, arising out of a commercial real estate transaction in which defendant, Rocco M. Nigro, Esq., acted as counsel for the buyer and the seller of the property, rendered an opinion letter for the benefit of the mortgage company, owned the title agency which negotiated the title insurance coverage and acted as the closing agent on behalf of the underwriting title insurance company. In sorting out the conflicting duties of care owed by Mr. Nigro, as well as his law firm and the title insurance companies involved in the mortgage transaction, I must determine the scope of an attorney's duty to a non-client third party and whether the title insurance company voluntarily assumed a duty of care to its insured, independent of its obligations set forth in the title insurance policy.
On June 16, 1997, Plaintiff, RTC Mortgage Trust 1994 N-1, successor in interest to Home Federal Savings and Loan Association, filed a five count amended complaint in this Court alleging claims for breach of contract, negligent title search, negligent hiring, and legal malpractice against Defendants, Fidelity National Title Insurance Company, Nations Title Insurance of New York, Eastern Developers Abstract, Inc., Caine, DiPasqua, Sloane & Raffaele f/k/a Caine, DiPasqua, Sloane, Raffaele & Nigro, Lawyers Title Insurance Corporation, and Rocco M. Nigro, Esq. On December 14, 1998, RTC Mortgage Trust filed a motion for partial summary judgment on the issue of liability on its claims for legal malpractice against Nigro and Caine, DiPasqua, and its claims for breach of contract and negligent title search against NTI. On December 14, 1998, NTI cross-moved for summary judgment on all claims asserted against it by RTC Mortgage Trust. In addition, on December 14, 1998, Lawyers Title Insurance Company also moved for summary judgment on all claims asserted against it by Plaintiff. This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332, based upon complete diversity of citizenship between the parties and the requisite amount in controversy.
For the reasons set forth below, I shall grant Plaintiff's motion for partial summary judgment on the issue of liability on its claim for legal malpractice against the Defendants, Rocco M. Nigro, Esq., and Caine, DiPasqua, Sloane & Raffaele. I shall also grant Plaintiff's motion for partial summary judgment on the issue of liability on its claim for negligent title search against Nations Title Insurance of New York. The entry of these partial summary judgments in favor of Plaintiff is subject to a resolution of disputed issues of material fact by a jury,1 pursuant to Lopez v. Swyer, 62 N.J. 267, 300 A.2d 563 (1973); Goodman v. Mead Johnson & Co., 534 F.2d 566 (3d Cir.1976), to determine whether these claims, as well as Plaintiff's claim for negligent hiring, are barred by the statute of limitations.
I shall grant the motion of Defendant, Nations Title Insurance of New York, for summary judgment on Plaintiff's claims for breach of contract and the recovery of attorneys' fees. I shall, however, deny the motion of Nations Title Insurance of New York for summary judgment insofar as it seeks summary judgment on Plaintiff's claim for negligent hiring, subject to the resolution of disputed issues of material fact by a jury surrounding the statute of limitations defense. Furthermore, I shall grant Defendant, Fidelity National Title Insurance Company's motion for summary judgment on all claims asserted against it by Plaintiff. Finally, I shall grant the motion of Defendant, Lawyers Title Insurance Company, for summary judgment on all claims asserted against it by Plaintiff.
In addition, given the multiple representations undertaken by Mr. Nigro in this transaction, and the myriad conflicts of interest presented by his conduct, I conclude that Rocco M. Nigro, Esq., violated Rule 1.7 of the New Jersey Rules of Professional Conduct, made applicable in this Court pursuant to Rule 103.1(a) of the Local Civil Rules of this Court.2 Accordingly, I shall refer this matter to David E. Johnson, Jr., Esq., Director of the New Jersey Office of Attorney Ethics, for whatever action he deems appropriate.
The facts and procedural history of this case have been summarized to some extent in this Court's Opinions of October 20, 1997, RTC Mortgage Trust 1994 N-1 v. Fidelity National Title Insurance Co., et al., 981 F.Supp. 334 (D.N.J.1997) ("RTC I"), and August 14, 1998, RTC Mortgage Trust 1994 N-1 v. Fidelity National Title Insurance Co., et al., 16 F.Supp.2d 557 (D.N.J.1998) ("RTC II"). What follows below are the facts and procedural history relevant to Plaintiff's and Defendants' respective motions and cross-motions for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure.
On June 16, 1997, Plaintiff, RTC Mortgage Trust 1994 N-1 ("RTC Mortgage Trust"), filed a five count Amended Complaint3 in this Court alleging claims for negligence and breach of contract against Defendants, Fidelity National Title Insurance Company ("FNTIC"), Nations Title Insurance of New York ("NTI"),4 Eastern Developers Abstract, Inc. ("Eastern"), Caine, DiPasqua, Sloane & Raffaele f/k/a Caine, DiPasqua, Sloane, Raffaele & Nigro ("Caine, DiPasqua"), Lawyers Title Insurance Corporation ("LTIC"), and Rocco M. Nigro, Esq. ("Nigro"). See Amended Complaint (filed June 16, 1997). RTC Mortgage Trust's claims include: (1) breach of a title insurance policy, negligent title search and negligent hiring against FNTIC and NTI, Count I; (2) breach of a title reinsurance policy and negligent title search against LTIC, Count II; (3) negligent title search against Eastern, Count III;5 and (4) legal malpractice against Nigro and Caine, DiPasqua, Counts IV and V. See Amended Compl., Counts I-V.
Notwithstanding the convoluted procedural history of this matter and the forest of paper it has generated, see RTC I, 981 F.Supp. at 336-37; RTC II, 16 F.Supp.2d at 559-60, this case involves a relatively common commercial real estate transaction, which went sour after the borrowers/mortgagors defaulted.
George Diemer ("Diemer") and Robert Pacilli ("Pacilli") were commercial real estate developers and the general and limited partners in Mount Laurel Associates ("MLA"), a Pennsylvania limited partnership...
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