Chicago Title Ins. Co. v. Accurate Title Searches, Inc.
Chicago Title Ins. Co. v. Accurate Title Searches, Inc.
Opinion
This is an action by the plaintiff, Chicago Title Insurance Company (Chicago Title), to recover damages from the defendant, Accurate Title Searches, Inc., for losses allegedly incurred by Ticor Title Insurance Company (Ticor Title), another title insurer with which the plaintiff later merged, 1 due to the defendant's negligence in performing a title search as to a parcel of real property in Hartford (property). In reliance upon that title search, Ticor Title issued a lender's title insurance policy (policy) for the property to NationOne Mortgage Company, Inc. (NationOne), a lender that took a note and mortgage on the property from Janice Flemming, in exchange for a $208,000 loan to finance her purchase of the property from its purported owner, Joseph M. Davis. The plaintiff incurred the losses here complained of in investigating and settling claims against NPL Investment Trust I (NPL Investment), 2 which had become an insured under the policy upon acquiring Flemming's note and mortgage from NationOne, by two entities claiming to have superior interests in the property to those of NPL Investment. One such claimant, Terry Road, LLC (Terry Road), allegedly acquired its superior interest in the property pursuant to a quitclaim deed from Davis dated February 22, 2006, which was recorded on the Hartford land records on April 21, 2006. The other claimant, Connecticut Attorneys Title Insurance Company (CATIC), allegedly acquired its superior interest in the property pursuant to a $500,000 attachment against Terry Road, which was recorded on the Hartford land records on September 10, 2009.
After moving successfully for summary judgment on the issue of the defendant's liability for negligence, the plaintiff presented two related claims for damages to compensate it for losses allegedly caused by such negligence, together with prejudgment interest on such damages pursuant to General Statutes § 37-3a, at two separate hearings in damages. At an initial hearing in damages, the plaintiff sought, and the trial court, Wiese, J. , awarded, $77,500 in damages to compensate it for all sums it paid to settle the claims of Terry Road and CATIC against NPL Investment. The court held that the amount of that settlement, which had been negotiated at arm's length at a judicial pretrial, was reasonable, and thus awarded it to the plaintiff as compensatory damages in this action. At a second hearing in damages, however, the same trial court, Wiese, J ., denied the plaintiff's additional claim for damages to compensate it for the attorney's fees and expenses it had incurred in investigating and resolving Terry Road's and CATIC's counterclaims against NPL Investment, and denied the plaintiff's claim for prejudgment interest on its earlier damages award under § 37-3a. The court based its rejection of the plaintiff's additional claim for damages upon its understanding of the so-called American rule, 3 under which parties bringing civil actions to recover damages from alleged wrongdoers are generally required to pay their own attorney's fees and expenses to prosecute such actions. The court rejected the plaintiff's claim for prejudgment interest on its earlier damages award on the ground that that award was "an unliquidated sum [that was neither] already payable prejudgment nor wrongfully withheld." 4
On appeal, the defendant claims that the trial court erred in awarding the plaintiff compensatory damages in the full amount of its settlement with Terry Road and CATIC, without first requiring the plaintiff to prove that NPL Investment was legally liable for, and thus required to pay the settling parties, that entire amount. This is so, claims the defendant, because the plaintiff's present claim sounds not in negligence but in common-law indemnification, 5 for which the plaintiff is only entitled to recover damages for payments to third parties which it was legally obligated to make. The defendant argues that where, as here, a party from which a plaintiff seeks indemnification for payment of an underlying claim is not given notice of or an opportunity to defend against that claim, the plaintiff, as would-be indemnitee, must prove not only that the amount it seeks to recover from the defendant, as alleged indemnitor, was a reasonable amount to settle the claim, but that the plaintiff was legally liable to pay the claimant that amount.
In its cross appeal, the plaintiff claims that the court erred in ruling that the American rule precluded the plaintiff from recovering, as an element of compensatory damages, the attorney's fees and expenses that it incurred to investigate and settle Terry Road's and CATIC's underlying claims against NPL Investment. That rule, it argues, only bars a plaintiff from recovering the attorney's fees and expenses it has incurred in the particular litigation in which such fees and costs are sought, not those incurred in previous actions that the plaintiff was forced to defend as a result of the defendant's negligence.
On the record before us, we agree with the trial court, Bright, J ., that the plaintiff's claim sounds in negligence, not in common-law identification, and thus that the defendant's arguments as to what proof is required to prevail on a claim for indemnification are inapplicable to this case. On the other hand, we disagree with the trial court, Wiese, J ., that the plaintiff's claim for damages to compensate it for the attorney's fees and expenses it incurred to defend its insured in prior litigation is barred in this action by the American rule. Accordingly, although we reverse the court's judgment denying the plaintiff's claim for compensatory damages in the amount of its prior attorney's fees and expenses and remand this case for further proceedings on that claim, we affirm the court's judgment in all other respects. The following facts and procedural history are relevant to our disposition of this appeal. In May, 2004, Leroy R. McCalop was the record owner of the property located at 108-110 Webster Street in Hartford. On May 19, 2004, McCalop issued a general warranty deed (McCalop deed) which provided: "I, LEROY R. McCALOP of 1417 Stafford Avenue Bristol, Connecticut 06010 for consideration of TWO HUNDRED THOUSAND AND 00/100 ($200,000.00) DOLLARS received to my full satisfaction of JOSEPH M. DAVIS of 15 June Street, East Hartford Connecticut do give, grant, bargain, sell and confirm unto the said LEROY R. McCALOP ... all that certain piece or parcel of land ... situated in the Town of East Hartford, County of Hartford and State of Connecticut, known as 108-110 Webster Street ...." 6 That same day, Davis encumbered the property with two mortgages in the aggregate amount of $200,000. The McCalop deed and Davis' two mortgages were subsequently recorded on June 7, 2004. As recently as February 2, 2006, Davis was listed as the property's account holder for municipal utilities and taxes.
Approximately two years after the McCalop deed was executed, Davis purportedly conveyed the property, on two separate occasions, to two different parties. The first such conveyance took place on February 22, 2006, when Davis delivered a quitclaim deed for the property to Terry Road. This quitclaim deed was recorded on April 21, 2006. Thereafter, Terry Road encumbered the property with a $25,996 mortgage, which was recorded on May 17, 2006. Davis' second purported conveyance of the property took place on July 13, 2006, when he delivered a warranty deed for the property to Flemming for $260,000. As consideration for the loan, Flemming gave NationOne a note in the amount of $208,000 secured by a mortgage for the property. NationOne, in turn, applied for a lender's title insurance policy with respect to the property with the plaintiff's predecessor, Ticor Title. 7 In an effort to assess the quality of Davis' title to the property, Ticor Title requested two title searches with respect to the property.
On April 17, 2006, approximately two months after Davis' initial conveyance of the property by quitclaim deed to Terry Road, but four days before that deed was recorded, Ticor Title retained the defendant to perform its first title search with respect to the property. Ticor Title specified in its search order that it sought a "[f]ull ( [forty plus] years)" search of the property, of which the "current owner" was listed as "Joseph Davis." Pursuant to this search order, the defendant conducted a title search with respect to the property and submitted a written report of its findings to "Patricia Kunz, [Ticor Title]." According to that report, the search covered the period starting on May 20, 1957, and ending on April 12, 2006, and revealed that the "most recent conveyance" of the property had been by warranty deed dated May 19, 2004, from "Leroy R. McCalop," as "grantor," to "Joseph M. Davis or Leroy R. McCalop," as "grantee," which was recorded on June 7, 2004. Accordingly, although the author of the report noted that there was a "mistake in deed, in that it states consideration from Davis but conveys property to McCalop," the report concluded that the "present title holder" of the property was "Joseph M. Davis or Leroy R. McCalop." The report also noted Davis' two mortgages on the property, which had been recorded in June, 2004, and attached a printout listing Davis as the then current account holder on the property's municipal utility bills.
Approximately two months after the first title search, on June 13, 2006, the defendant conducted a second title search with respect to the property, also on behalf of Ticor Title. On this occasion, as on the first, the defendant purportedly conducted another "full forty year statutory search" with respect to the property, albeit for a longer period, from May 20, 1957, until June 13, 2006, which ended approximately two months after Terry Road's quitclaim deed and one month after its mortgage had been recorded on the Hartford land records. In the written report of its findings based upon this second title search, as in the earlier written report based upon its first title search, the defendant once again noted the apparent "mistake" in the McCalop deed as well as Davis' subsequently recorded mortgages on the property. Despite these indications as to Davis' possible title interest in the property, the defendant failed to investigate Davis' name in the grantor-grantee index. Consequently, the defendant never found, and the written report of its findings never mentioned, either Terry Road's quitclaim deed from Davis or its subsequent mortgage on the property, both of which were recorded several weeks before the listed ending date of the second title search. As a result of this omission, Ticor Title, NationOne, and Flemming were all unaware, at the time of Davis' purported conveyance of the property to Flemming, that Davis had previously transferred all of his interest in the property to Terry Road.
On July 6, 2006, one week before the conveyance from Davis to Flemming, McCalop issued a "corrective warranty deed," naming Davis as the intended grantee of the 2004 McCalop deed. 8 The following week, on July 13, 2006, Flemming obtained a mortgage from NationOne in the amount of $208,000. In conjunction with the Flemming mortgage, NationOne procured the policy from Ticor Title, which had agreed to insure it, as Flemming's mortgagee, in reliance upon the defendant's title search reports. That same day, Davis executed a warranty deed purporting to convey the property to Flemming in exchange for $260,000.
By March 18, 2008, Flemming had defaulted on her mortgage. Thereafter, the successor mortgagee, NPL Investment, commenced an action to foreclose on the property and recorded a lis pendens 9 on the Hartford land records. On October 1, 2009, NPL Investment filed its amended complaint, alleging that Flemming had defaulted on her mortgage and that both Terry Road and CATIC held junior interests in the property.
After receiving notice of the pending action, both Terry Road and CATIC filed answers and counterclaims against NPL Investment and cross claims against Flemming and other defendants. The counterclaims and cross claims (hereinafter counterclaims) alleged that NPL Investment's mortgage was invalid because, by virtue of Terry Road's quitclaim deed from Davis, Davis had no legal interest in the property to convey to Flemming, and thus Flemming had no legal interest in the property when she obtained her mortgage from NationOne. In response to these allegations, NPL Investment filed a claim with the plaintiff 10 under the policy for $208,000, which was then the outstanding principal balance on Flemming's note.
After receiving NPL Investment's claim under the policy, the plaintiff reviewed the title search reports to assess the validity of CATIC's and Terry Road's counterclaims. Subsequent investigation revealed that the defendant's second title search report failed to disclose either Terry Road's quitclaim deed or its mortgage on the property, both of which had been recorded prior to June, 2006. On the basis of those findings, the plaintiff entered into negotiations with CATIC and Terry Road, on behalf of NPL Investment, in an effort to settle their counterclaims, and thus to resolve NPL Investment's claim under the policy. Although CATIC and Terry Road initially demanded $150,000 to settle their dispute with NPL Investment, the parties ultimately agreed to settle the matter for $77,500. Under the parties' settlement agreement, the plaintiff received a release of CATIC's interest in the property, a withdrawal of all legal claims by both CATIC and Terry Road, and a quitclaim deed from Terry Road to Flemming, which was issued on July 6, 2011. Thereafter, on July 21, 2011, the plaintiff issued a check in the amount of $77,500 to CATIC.
On March 5, 2012, plaintiff's counsel sent a demand letter to the defendant, seeking $77,500 in compensatory damages as well as compensation for all fees and expenses it had incurred in investigating and negotiating a settlement of the underlying claims against NPL
Investment. Prior to receiving this demand letter, the defendant had not been notified of any alleged defects in its title search reports with respect to the property, the counterclaims brought against NPL Investment based upon alleged defects in Flemming's title to the property, or the plaintiff's negotiations with Terry Road and CATIC to settle those counterclaims.
On August 10, 2012, the plaintiff filed its one count operative complaint against the defendant in this action, alleging that the defendant had been negligent in conducting its title search with respect to the property. Specifically, the plaintiff alleged that the defendant had a duty to exercise reasonable care in performing the title search, that it breached that duty by failing to investigate Davis' name in the grantor-grantee index, and that that breach had caused the plaintiff to suffer $77,500 in economic damages. On June 21, 2013, the plaintiff filed a motion for summary judgment as to the defendant's liability only. In response to that motion, the defendant filed a memorandum in opposition to summary judgment in which it claimed, inter alia, that it had not breached its duty of care, and that the plaintiff's failure to provide notice of the underlying counterclaims precluded the plaintiff from asserting an indemnification claim against the defendant. On December 19, 2013, the trial court, Bright, J. , granted the plaintiff's motion for summary judgment as to the defendant's liability. In its memorandum of decision, the court rejected the defendant's argument that this was an indemnification action and held that the plaintiff had demonstrated the absence of any genuine issue of material fact as to the defendant's negligence.
Thereafter, on October 2, 2014, the court, Wiese, J. , held an initial hearing in damages. In its memorandum of decision following that hearing, dated December 31, 2014, the court found that the plaintiff had satisfied its burden of proving, by a preponderance of the evidence, that it was reasonably entitled to recover $77,500 in economic damages to compensate it for all sums paid to settle the counterclaims of CATIC and Terry Road against NPL Investment. The court initially declined, however, to rule on the plaintiff's claims for damages for attorney's fees and expenses it had incurred to investigate and settle the claims against NPL Investment, and for prejudgment interest on the plaintiff's claims for damages.
A second hearing in damages was held on March 24, 2015, to address the latter claims for damages. Three days later, the court, Wiese, J. , issued a second memorandum of decision in which it held that the plaintiff was not entitled to prejudgment interest on its damages award and that, under the American rule, the plaintiff was not entitled to recover damages from the defendant in this action to compensate it for the attorney's fees and expenses it had incurred to investigate and negotiate a settlement in the earlier action. Thereafter, the defendant filed its appeal from the court's judgment and the plaintiff filed its cross appeal. Additional facts and procedural history will be set forth as necessary.
I
The defendant raises two arguments on appeal. The defendant first argues that, contrary to the holding of the trial court, Bright, J. , the plaintiff's complaint states a claim for common-law indemnification, and thus, consistent with the principles of indemnification law, the plaintiff was obligated to notify the defendant of the counterclaims filed by Terry Road and CATIC prior to negotiating a settlement agreement. The defendant therefore argues that the plaintiff's failure to notify it of either the counterclaims or the plaintiff's settlement negotiations, until after the plaintiff was bound by the terms of the settlement agreement, precluded the plaintiff from relying merely on the reasonableness of its settlement agreement as the basis for awarding damages at the initial hearing in damages. Instead, the defendant argues, the plaintiff was required to prove the merits of CATIC's and Terry Road's counterclaims against NPL Investment and to establish the plaintiff's liability for those counterclaims in the amount it agreed to pay. In addition, in the last two pages of its brief to this court, the defendant raises, albeit without meaningful citation, a second argument that the court erred in granting summary judgment as to the defendant's liability because the McCalop deed did not convey a legal interest in the property to Davis, and thus that Terry Road never acquired such an interest in the property pursuant to its quitclaim deed from Davis. On that basis, the defendant argues in a cursory manner that summary judgment on the issue of liability should not have been granted by the trial court. We address each claim in turn.
A
We first address whether the plaintiff was obligated to notify the defendant either of the counterclaims of CATIC or Terry Road, or its settlement negotiations with those claimants and, if so, what effect, if any, its failure to give such notification had on the proof required of it to establish its entitlement to recover damages in the full amount it paid to settle that action. Dispositive of this analysis is the threshold issue of whether this is a claim for common-law indemnification, as the defendant has asserted, rather than a claim for negligence, as the plaintiff has consistently argued and the trial court ruled. Because the sole basis for the defendant's argument that the plaintiff bears a special burden of proof with respect to its liability for the underlying claims it settled and now seeks to be compensated for is its contention that this is a common-law indemnification claim, that argument must be rejected ab initio if the present claim does not sound in common-law indemnification. We conclude, for the following reasons, that the plaintiff's claim sounds in negligence, not in common-law indemnification, and thus that the defendant's first challenge to the trial court's judgment must be rejected. 11
The following factual and procedural history is necessary to our resolution of this claim. The one count operative complaint was filed on August 10, 2012. In the second paragraph of the complaint, it was alleged that the "[d]efendant performed a title search and issued a title report in preparation for a mortgage loan made by NationOne ... to [Flemming] for her purchase of the property known as 108-110 Webster Street, Hartford, Connecticut ...." In the fourth paragraph of the complaint, it was alleged that "in conjunction with the Closing, NationOne purchased [the policy] from Ticor Title,
which ... policy was issued in reliance on the title search
performed by [the] defendant." (Emphasis added.) In the sixth and seventh paragraphs of the complaint, the plaintiff alleged that "a claim was subsequently made that [Flemming] was not the record owner of the property" and, in response, the plaintiff "undertook to investigate the claim made under the [policy] issued by Ticor Title, and, in 2011 ... incurred a loss by virtue of ... paying $77,500 to resolve that claim." In the eighth and ninth paragraphs of the complaint, the plaintiff alleged that the defendant was negligent because, inter alia, the title search report did not reflect the Terry Road deed and "the defendant failed to exercise the degree of care, skill and/or diligence employed
by title searchers practicing under similar circumstances."
We begin with our standard of review. "[T]he interpretation of pleadings is always a question of law for the court .... Our review of the trial court's interpretation of the pleadings therefore is plenary." (Internal quotation marks omitted.)
Bross
v.
Hillside Acres, Inc.
,
The defendant advances two arguments as to why this is a claim for common-law indemnification and why the plaintiff, therefore, was required to provide the defendant with timely notice of the underlying counterclaims. The defendant first argues that, on the basis of the facts presented, the plaintiff was passively negligent for its losses and, therefore, its theory of recovery must be that of common-law indemnification. Second, the defendant emphasizes that the plaintiff incurred losses as a result of its liability to a third party and, therefore, the plaintiff's claim to recover such damages is the functional equivalent of a claim for indemnification. We address each argument in turn.
1
In support of its first argument as to why this is a claim of common-law indemnification, the defendant asserts that "it has long been recognized that negligence can form the basis of a claim for indemnification, if the negligence of the indemnitee is passive and the negligence of the indemnitor is active. ... The plaintiff's claim is obviously a claim for indemnification based on active/passive negligence, and therefore the consequences of not providing notice of the underlying claim apply." (Citation omitted.) The plaintiff, however, argues that an action for common-law indemnification requires the presence of two tortfeasors, and thus, because it was not negligent, common-law indemnification is inapplicable to the facts of this case. The defendant counters that the plaintiff misconstrues the passive negligence requirement, and that "passive negligence specifically requires that a party not be negligent in any manner, rather that liability is imposed as an operation of law." We agree with the plaintiff.
"[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."
Amoco Oil Co.
v.
Liberty Auto & Electric Co.
,
The consensus expressed by these authorities fully aligns with our jurisprudence concerning claims for common-law indemnification. The theory of common-law indemnification was first announced by our Supreme Court in the seminal case of
Kaplan
v.
Merberg Wrecking Corp.
,
After conducting a comprehensive review of our case law, we agree with the plaintiff that the theory of common-law indemnification is inapplicable to the facts in the present case. Our conclusion rests on the fact that the defendant has not presented evidence demonstrating that (1) the parties owed an identical duty to NPL Investment, the insured and original plaintiff in the underlying action; (2) the plaintiff's payment under the express terms of the policy discharged an obligation for which the plaintiff and the defendant were jointly and severally liable; or (3) the plaintiff's payment under the terms of the policy rendered it chargeable with some degree of negligence in the underlying action. See, e.g.,
Smith
v.
New Haven
, supra,
We are not persuaded that this course of conduct constitutes passive negligence in the underlying action; rather, these facts suggest that the plaintiff fully complied with its duties to investigate and defend claims that fell within the terms of the policy. Although we agree with the defendant that there are limited circumstances in which a party's passive negligence arises by operation of law, those circumstances do not apply to the present case. 13 Accordingly, the facts of the record presented do not support the defendant's argument that the plaintiff and the defendant owed an identical duty to NPL Investment, that the plaintiff's payment under the terms of the policy discharged a joint and several obligation of the parties, or that the plaintiff's compliance with its contractual duties rendered it passively negligent in the underlying case.
2
The defendant next argues that because the plaintiff's loss resulted from its contractual liability to a third party, the plaintiff's attempt to offset its liability by recovering that amount from the defendant transforms its claim into a claim for common-law indemnification. Although we acknowledge that the plaintiff's recovery of such damages makes whole the plaintiff for its expenses, the remedial effect of the plaintiff's damages does not transform this action, ipso facto, into a claim for common-law indemnification. Indeed, the defendant fails to account for cases in which a plaintiff has asserted a claim of negligence against a defendant in order to recover damages incurred as a result of the plaintiff's legal liability to a third party. See, e.g.,
Prokolkin
v.
General Motors Corp.
,
In
Prokolkin
, the plaintiff was involved in an automobile accident allegedly caused by his car's defective limited slip differential.
Prokolkin
v.
General Motors Corp.
, supra,
On appeal in
Prokolkin
, the plaintiff argued that the trial court's decision to set aside the verdict was erroneous. Id., at 302,
In
Commonwealth Land Title Ins. Co.
, the defendant Close, Jensen & Miller, P.C., a "well known civil engineering firm that has done extensive land surveying in Connecticut," and defendant John H. Miller, certified a survey of two adjacent properties to the plaintiffs, two title insurance companies who, in reliance on those surveys, issued two owners title insurance policies to the owners of the respective properties.
Commonwealth Land Title Ins. Co.
v.
Close, Jensen & Miller, P.C.
, supra,
These cases demonstrate that where a plaintiff is owed a direct duty of care by a defendant who breaches such duty and renders the plaintiff legally liable to a third party, thereby causing the plaintiff to incur losses in discharging that liability, the plaintiff may assert a claim of negligence against the defendant and seek to recover those costs as compensatory damages. The 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, as here, the plaintiff was not passively negligent for its losses. As an aside, a pedestrian who has been struck by a vehicle while walking in a crosswalk does not need to assert a claim of indemnification against the driver in order to recover those medical expenses for which the pedestrian becomes contractually liable. Indeed, those damages are categorized appropriately as economic damages that may be recovered in an action for negligence. As such, we are unpersuaded by the defendant's argument that the plaintiff's liability to a third party, by itself, transformed this negligence claim into a claim of common-law indemnification.
In light of the foregoing analysis, we conclude that the plaintiff's claim was not a claim for common-law indemnification. Rather, as the trial court, Bright, J. , correctly found, this is a claim of negligence. The defendant could not and did not explain adequately why it failed to investigate Davis' name in the grantor-grantee index during either its first or second title search of the property. In fact, the defendant conceded during oral argument to this court that its title search was performed in a negligent manner. Had the defendant exercised reasonable care in performing its second title search, it would have discovered and its report would have notified the plaintiff of Terry Road's quitclaim deed and its subsequent mortgage on the property. Given the commercial nature of the plaintiff's business as an insurer, it was readily foreseeable to the defendant that, should its search be performed in a negligent manner, the plaintiff may be forced to expend money in investigating and settling claims brought pursuant to an insurance policy that the plaintiff had issued in reliance upon the accuracy of the defendant's title search reports. Thus, the plaintiff was entitled to recover, as compensatory damages, those sums reasonably spent in resolving the underlying counterclaims, all of which would not have been necessary had the defendant exercised reasonable care in performing its second title search.
The defendant offers no legal authority for the proposition that a plaintiff asserting a claim of negligence owes the putative defendant a duty to notify, or that its failure to provide such notice affects the applicable standard of proof during a subsequent hearing in damages. Accordingly, we reject the defendant's claims that the plaintiff's failure to provide timely notice to the defendant altered the applicable standard of proof and that the court, Wiese, J. , applied the incorrect standard of proof at the plaintiff's first hearing in damages.
B
The defendant's final argument, which accounts for less than two pages of its brief, is that the trial court erred in rendering summary judgment because the plaintiff's "entire claim rests on a [misinterpretation] of the [McCalop] deed ... [and that] any attempt to change the result clearly stated requires assumptions based on facts not in evidence. ... At the very least, evidence should be required before the plain meaning of the deed is reinterpreted." The defendant further argues that "if Davis had no title to convey to Terry Road, then [the] plaintiff had no legal obligation to pay the underlying claim, and therefore has no claim against the defendant .... Therefore, summary judgment should not have been entered against the defendant."
Notably, the defendant's brief is devoid of citation or authority regarding our review of a trial court's rendering of summary judgment; further, the defendant
fails to articulate whether a genuine issue of material fact exists, thereby precluding the trial court's granting of summary judgment, and, if so, what evidence on record before the trial court affirmatively demonstrated the existence of such genuine issue. In light of these patent defects in the defendant's brief, we conclude that the defendant's second argument is inadequate for our review. "It is well settled that [w]e are not required to review claims that are inadequately briefed. ... We consistently have held that [a]nalysis, rather than mere abstract assertion, is required in order to avoid abandoning an issue by failure to brief the issue properly. ... [F]or this court judiciously and efficiently to consider claims of error raised on appeal ... the parties must clearly and fully set forth their arguments in their briefs. We do not reverse the judgment of a trial court on the basis of challenges to its rulings that have not been adequately briefed." (Internal quotation marks omitted.)
Tonghini
v.
Tonghini
,
In any event, we note that even if this issue had been adequately briefed, the defendant's argument would fail on the merits. Our conclusion is supported by the fact that, during oral argument to this court, the defendant conceded that its title search was, in fact, performed in a negligent manner. Accordingly, even if this court construed the defendant's second argument in its broadest terms, our analysis would be limited to deciding whether, in light of the language of the 2004 McCalop deed conveying the property from McCalop to McCalop, Terry Road had a colorable claim of title against NPL Investment, and thus whether the defendant's negligence in failing to uncover the existence of the Terry Road quitclaim deed was a proximate cause of the plaintiff's loss. In this regard, we are reminded that the defendant submitted a copy of the corrective warranty deed issued from McCalop to Davis, dated July 6, 2006, together with its memorandum in opposition to the plaintiff's motion for summary judgment. Although the defendant argues in its brief that "any attempt to change the result clearly stated [in the McCalop deed] requires assumptions based on facts not in evidence," the defendant overlooks its own submission and the legal effect of the July, 2006 corrective warranty deed.
"A deed of confirmation may be appropriately utilized in order to remove doubts as to the operativeness of a prior deed to convey title to the land intended. ... Where the name of one of the grantees is omitted, the omission may be cured by a subsequent deed incorporating the names of all the grantees in accordance with the intention of the parties." (Footnote omitted.) 23 Am. Jur. 2d 272-73, Deeds § 273 (2013). "A correction deed normally relates back to the date of the original deed, at least as between the parties to the deed. Thus, a second deed correcting the erroneous description contained in a former deed between the parties, as between them, relates back and becomes effective as of the date of the first deed." (Footnote omitted.) 26A C.J.S. 212, Deeds § 173 (2011). "[P]assage of title is considered by a fiction of law to relate back to the date of execution of the deed, provided no prejudice results to intervening equities."
14
A line-by-line comparison of the 2004 McCalop deed and the 2006 corrective deed reveals that both documents recite: the same operative date of conveyance, May 19, 2004; the same description of the parcel of land being conveyed; the same exchange of consideration; and the same general warranties. Indeed, the only differences between the two documents are that the corrective deed clarifies that the intended grantee of the 2004 conveyance was Davis, not McCalop, and that the property was located within the town of Hartford, not the town of East Hartford. 15 Accordingly, the July, 2006 corrective deed related back and became legally effective as of the original date of conveyance, May 19, 2004. Consequently, Davis' later transfer of the property by quitclaim deed to Terry Road constituted a valid transfer of his interest in the property. The defendant does not address the legal effects of the corrective deed in its brief, and otherwise fails to demonstrate the existence of any genuine issue of material fact as to the damages caused by its admitted negligence. Accordingly, we conclude, in the alternative, that the corrective deed renders the defendant's final argument meritless.
II
On its cross appeal, the plaintiff claims that the trial court misinterpreted the American rule 16 and erroneously relied upon it to preclude an award of compensatory damages to the plaintiff for the attorney's fees and related expenses it incurred to investigate and negotiate a settlement of Terry Road's and CATIC's adverse claims of title to the property against the plaintiff's insured, NPL Investment. The defendant counters that the plaintiff's failure to notify it of such claims and its efforts to settle them precludes the plaintiff from recovering such attorney's fees and related expenses in this matter. We agree with the plaintiff.
The following additional facts are relevant to the resolution of this claim. After the trial court, Bright, J. , granted the plaintiff's motion for summary judgment as to the defendant's liability for negligence in performing the title search upon which its predecessor, Ticor Title, relied in issuing a lender's title insurance policy with respect to the property, the parties scheduled a hearing in damages for October 2, 2014. Following that hearing, the trial court, Wiese, J. , issued a written memorandum of decision, in which it ruled that the plaintiff had established its entitlement to recover $77,500 in damages to compensate it for all sums it had paid to CATIC to settle CATIC's and Terry Road's claims against NPL Investment. The trial court initially declined, however, to rule on the plaintiff's claim for additional compensatory damages to compensate it for the attorney's fees and expenses that it had incurred to investigate and settle those claims. Instead, the parties agreed to address this issue at a second hearing in damages. Prior to the second hearing in damages, the plaintiff submitted an affidavit as to its attorney's fees and related expenses in the earlier litigation between NPL Investment and CATIC and Terry Road, which totaled $20,161.26.
Oral argument on the plaintiff's claim for additional compensatory damages was held on March 24, 2015. During oral argument, the defendant argued that, absent either a statute or a contractual provision to the contrary, the American rule precluded the plaintiff from recovering any of its attorney's fees or costs of litigation in this case. The plaintiff responded that its earlier attorney's fees and expenses were recoverable as compensatory damages because, like medical bills incurred to cure a physical injury resulting from a defendant's negligence, they were incurred to cure a legal harm resulting from the defendant's negligence. The plaintiff sought to distinguish between the legal fees and costs it incurred during its settlement negotiations with CATIC and Terry Road on the underlying claim against NPL Investment and the legal fees and costs it incurred in bringing the present action against the defendant, emphasizing that it was seeking to recover only the former. On those grounds, the plaintiff argued that damages it sought here for its prior attorney's fees and expenses were elements of compensatory damages, which, because they were incurred in a different legal proceeding, were not barred by the American rule.
The trial court, Wiese, J. , disagreed. In its second memorandum of decision, the trial court held that there was no statutory authority or contractual term that permitted the plaintiff to recover attorney's fees in this action. The court further held that it was unable to find any case law to support the plaintiff's position that attorney's fees may be considered a measure of compensatory damages under the facts of this case. On those grounds, the trial court held that the American rule barred the plaintiff's claim for additional compensatory damages in this action.
On appeal, the plaintiff claims that the trial court misinterpreted the scope of the American rule and improperly applied it to reject the plaintiff's claim for compensatory damages in the amount of the attorney's fees and expenses it incurred to investigate and settle the claims of Terry Road and CATIC against NPL Investment as a result of the defendant's negligence. The defendant argues that a party seeking common-law indemnification is precluded from seeking attorney's fees and expenses where the party has failed to notify the defendant of the underlying action. 17 We agree with the plaintiff.
We begin with our standard or review. Ordinarily, "we review the trial court's decision to award attorney's fees for abuse of discretion. ... This standard applies to the amount of fees awarded ... and also to the trial court's determination of the factual predicate justifying the award." (Internal quotation marks omitted.)
ACMAT Corp.
v.
Greater New York Mutual Ins. Co.
,
"The general rule of law known as the American rule is that attorney's fees and ordinary expenses and burdens of litigation are not allowed to the successful party absent a contractual or statutory exception. ... This rule is generally followed throughout the country ... [and] Connecticut adheres to the American rule." (Internal quotation marks omitted.)
ACMAT Corp.
v.
Greater New York Mutual Ins. Co.
, supra,
In this case, the plaintiff is seeking to recover only those attorney's fees and expenses that it incurred during its settlement negotiations with Terry Road and CATIC, in an action entirely distinct from the present case. An award of such attorney's fees and expenses would not discourage parties from litigating their present claims in good faith, and thus an award of this nature would not undermine the policy of the American rule. We further agree with the plaintiff that an award
of these damages would merely return the plaintiff to same position it would have occupied absent the defendant's negligence and, as such, these damages are compensatory in nature. See
The judgment is reversed only as to the award of damages for attorney's fees and related litigation expenses, and the case is remanded for a further hearing in damages on that issue; the judgment is affirmed in all other respects.
In this opinion the other judges concurred.
The plaintiff, Chicago Title, merged with its predecessor, Ticor Title, prior to June 21, 2011.
At an unspecified date between July 13, 2006, and March 18, 2008, Flemming's mortgage was assigned to NPL Investment.
"The general rule of law known as the American rule is that attorney's fees and ordinary expenses and burdens of litigation are not allowed to the successful party absent a contractual or statutory exception." (Internal quotation marks omitted.)
ACMAT Corp.
v.
Greater New York Mutual Ins. Co.
,
The plaintiff has not appealed the trial court's denial of its claim for prejudgment interest.
In its motion to reargue, dated January 8, 2014, the defendant argued, inter alia, that the trial court erroneously failed to analyze the plaintiff's claim as a claim for an implied contract of indemnity. See
Seismograph Service (England), Ltd.
v.
Bolt Associates, Inc.
,
See footnote 8 of this opinion, noting that the McCalop deed was later corrected to reflect, inter alia, that the property is located in Hartford.
Subsequent to the issuance of the policy but prior to the investigation of the disputed claim, Ticor Title merged with and was succeeded by the plaintiff, Chicago Title. See footnote 1 of this opinion.
The corrective deed, which was signed on July 6, 2006, stated, inter alia: "I, LEROY R. McCALOP of 1417 Stafford Avenue, Bristol, Connecticut 06010 for consideration of TWO HUNDRED THOUSAND AND 00/100 ($200,000.00) DOLLARS received to my full satisfaction of JOSEPH M. DAVIS of 15 June Street, East Hartford, Connecticut do give, grant, bargain, sell and confirm unto the said JOSEPH M. DAVIS ... all that certain piece or parcel of land ... situated in the Town of Hartford, County of Hartford and State of Connecticut, known as 108-110 Webster Street .... IN WITNESS WHEREOF, we have hereunto set our hands and seals this 19th day of May, 2004." Notably, the grantee's name was changed from Leroy R. McCalop to Joseph M. Davis, and further, the property's description was changed from "Town of East Hartford, Connecticut" to "Town of Hartford, Connecticut." The deeds were identical in every other respect.
"Generally, a notice of lis pendens is simply a notice that, when properly recorded, warns third parties, such as prospective purchasers, that the title to the property is in litigation .... In a foreclosure of a ... lien ... the lis pendens does not create an interest that is separate and distinct from the underlying interest being foreclosed. The sole purpose of the lis pendens in such an action is to give constructive notice to persons who may subsequently acquire an interest in the property, and cause them to be bound by the proceedings." (Citations omitted; internal quotation marks omitted.)
Ghent
v.
Meadowhaven Condominium, Inc.
,
As previously stated, the record does not reveal when Chicago Title merged with Ticor Title. See footnote 7 of this opinion. The record shows, however, that the plaintiff, Chicago Title, was the entity that conducted the investigation into CATIC's and Terry Road's counterclaims. For ease of reading, we refer to both Ticor Title and Chicago Title as the plaintiff henceforth.
Because we conclude that common-law indemnification is inapplicable to this case, we need not address the issue of whether a party seeking common-law indemnification is required to provide notice of the underlying action, or whether a failure to do so requires the indemnitee to prove its actual liability for the underlying damages.
Under
Kaplan
, "a [plaintiff] seeking indemnification must establish that: (1) the third party against whom indemnification is sought was negligent; (2) the third party's active negligence, rather than the [plaintiff's] own passive negligence, was the direct, immediate cause of the accident and the resulting harm; (3) the third party was in control of the situation to the exclusion of the [plaintiff] seeking reimbursement; and (4) the [plaintiff] did not know of the third party's negligence, had no reason to anticipate it, and reasonably could rely on the third party not to be negligent." (Footnote omitted.)
Valente
v.
Securitas Security Services, USA, Inc.
,
There are several circumstances where an indemnitee's passive negligence may arise as a matter of law. See, e.g.,
Skuzinski
v.
Bouchard Fuels, Inc.
,
Although the relevant authorities and case law qualify that corrective deeds may not relate back when a third party's interest is prejudiced, we are reminded that the only third party interest implicated by the corrective deed was held by Terry Road. It cannot be argued that they were prejudiced by the operation of such correction, as this deed, in effect, validated and affirmed their title pursuant to the quitclaim deed.
See footnote 8 of this opinion.
See footnote 3 of this opinion.
The defendant cites
Gianquitti
v.
Sheppard
, supra,
We construe, as do the parties, the trial court's rejection, under the American rule, of the plaintiff's claim for additional compensatory damages in this action, to apply equally to expenses incurred for attorney's fees and for related litigation expenses. Although the court mentioned only attorney's fees in its second memorandum of decision, the parties have consistently discussed both parts of the plaintiff's claim together, both in the trial court and before this court on appeal.
Reference
- Full Case Name
- Chicago Title Insurance Company v. Accurate Title Searches, Inc.
- Cited By
- 8 cases
- Status
- Published