Pellechia v. Estate of James J. Dimartino Esq. et al

Filing 65

ORDER granting 19 Motion to Dismiss without prejudice. Plaintiff may file an amended complaint consistent with this ruling within fifteen days of this ruling's filing date. Signed by Judge Warren W. Eginton on 9/7/12. (Ladd-Smith, I.)

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
LINDA PELLECHIA,
Plaintiff,
v.
ESTATE OF JAMES J. DIMARTINO, ESQ.,
AMERICAN GUARANTEE & LIABILITY
INS. CO.,
Defendants.

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3:11-cv-00183-WWE

MEMORANDUM OF DECISION ON DEFENDANT AMERICAN GUARANTEE &
LIABILITY INS. CO.’S MOTION TO DISMISS
Plaintiff Linda Pellechia brought this action against defendants Estate of James
DiMartino (“DiMartino”) and American Guarantee & Liability Ins. Co. (“AGL”) for breach of
contract, breach of fiduciary duty, fraud, and professional malpractice involving a failed real
estate closing.
Defendant AGL has moved to dismiss Count Two of plaintiff’s amended complaint for
failure to state a claim.
For the following reasons, defendant’s motion to dismiss will be granted.
BACKGROUND
For purposes of ruling on this motion to dismiss, the Court accepts the allegations of the
complaint as true and draws all inferences in favor of plaintiff.
Plaintiff retained James DiMartino as her attorney for the purchase of a property at 44
Seymore Lane, Medford, New York. Martino continued to represent plaintiff when she relisted
the Medford house for sale.
On May 31, 2005, plaintiff entered into a contract with a buyer. The buyer gave a
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$13,750.00 deposit to DiMartino. The closing was scheduled for December of 2005. Prior to the
closing, problems with Dimartino’s representation began to surface. The buyer’s attorney told
plaintiff to have Dimartino contact them regarding survey information and subdivision
permitting. Dimartino stated that he could not respond to every call but that he would take care
of it.
The real estate agent asked plaintiff to remove the tenants from the house for the
upcoming closing. DiMartino did not advise against having the tenants move out. Subsequently,
plaintiff learned that no permits had been filed. The buyers exercised their extension to postpone
the closing date until June, 2006. This posed a hardship for plaintiff because she was no longer
receiving rental income.
In March 2006, plaintiff was asked to go to the buyer’s office to sign some papers.
Plaintiff brought the papers to DiMartino for review. DiMartino advised plaintiff not to sign the
documents because they were backdated. At that time, Dimartino also advised plaintiff to secure
a backup buyer. DiMartino suggested a backup buyer, but advised plaintiff that he could not
represent her with that transaction. Plaintiff procured the backup buyer with the condition that
both parties would wait to see if the earlier deal closed in June.
DiMartino then asked plaintiff to give the original buyer six more months to close
because the original buyer was threatening litigation. Plaintiff went back to the town clerk and
learned that permits were still at least one year out. DiMartino then advised plaintiff to cancel
the contract with the original buyer and return the deposit.
In July 2006, the original buyer put a lis pendens on the property. DiMartino told
plaintiff he could not represent her with respect to the lis pendens. Plaintiff later received a copy
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of her file from DiMartino’s secretary and discovered that DiMartino had withheld knowledge of
the filing of the lis pendens.
In early 2007, the backup buyer cancelled the deal. Over the course of this dispute, the
property was vacant and then vandalized. Eventually, the property was condemned. The bank is
seeking to foreclose, and plaintiff has attempted multiple unsuccessful short sales. DiMartino
was still holding the deposit monies, waiting for the outcome of the State Supreme Court.
In November 2008, DiMartino was murdered.
Plaintiff has alleged that Dimartino failed to adequately protect and represent her
interests. Further, plaintiff has alleged that AGL was under contract to insure and indemnify any
acts of professional misconduct by DiMartino. Count Two aims to hold AGL “liable to plaintiff
for indemnity and contribution for damages sustained by plaintiff as a result of the actions of
DiMartino.”
DISCUSSION
The function of a motion to dismiss is "merely to assess the legal feasibility of the
complaint, not to assay the weight of the evidence which might be offered in support thereof."
Ryder Energy Distribution v. Merrill Lynch Commodities, Inc., 748 F.2d 774, 779 (2d Cir.
1984). When deciding a motion to dismiss, the Court must accept all well-pleaded allegations as
true and draw all reasonable inferences in favor of the pleader. Hishon v. King, 467 U.S. 69, 73
(1984). The complaint must contain the grounds upon which the claim rests through factual
allegations sufficient “to raise a right to relief above the speculative level.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 556 (2007). A plaintiff is obliged to amplify a claim with some factual
allegations in those contexts where such amplification is needed to render the claim plausible.
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Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
Plaintiff’s complaint is governed by Connecticut General Statutes §38a-312, “Liability of
insurer under liability policy.”
Section 38a-321 provides:
Each insurance company which issues a policy to any person, firm or
corporation, insuring against loss or damage on account of the bodily
injury or death by accident of any person, or damage to the property of any
person, for which loss or damage such person, firm or corporation is
legally responsible, shall, whenever a loss occurs under such policy,
become absolutely liable, and the payment of such loss shall not depend
upon the satisfaction by the assured of a final judgment against him for
loss, damage or death occasioned by such casualty. No such contract of
insurance shall be cancelled or annulled by any agreement between the
insurance company and the assured after the assured has become
responsible for such loss or damage, and any such cancellation or
annulment shall be void. Upon the recovery of a final judgment against
any person, firm or corporation by any person, including administrators or
executors, for loss or damage on account of bodily injury or death or
damage to property, if the defendant in such action was insured against
such loss or damage at the time when the right of action arose and if such
judgment is not satisfied within thirty days after the date when it was
rendered, such judgment creditor shall be subrogated to all the rights of the
defendant and shall have a right of action against the insurer to the same
extent that the defendant in such action could have enforced his claim
against such insurer had such defendant paid such judgment.
Plaintiff argues that the intention of Connecticut’s direct action statute is to give injured
parties the same rights under the insurance policy as the insured. Brown v. Employer’s
Reinsurance Corp., 206 Conn. 668, 672 (1988). “Thus, the statute protects those injured by
judgment proof insureds, by subrogating the injured party . . . to the rights of the assured against
the insurer.” Id.
Defendant contends that in order for a party to become subrogated to the rights of an
insured and to have a direct right of action against the insurer, that party must have obtained a
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judgment against the insured and the judgment must have remained unsatisfied for thirty days.
Indeed, both the statute and the Connecticut Supreme Court have provided that
subrogation occurs only “when a final judgment is rendered against the assured for loss or
damage covered by the policy and the judgment remains unsatisfied for more than thirty days, . .
.” Id. Plaintiff has not set forth the three requisites of a cause of action under Section 38a-321:
(1) that the plaintiff has recovered a final judgment; (2) that the judgment is against a person who
was insured by the defendant against liability on it; and (3) that the judgment has remained
unsatisfied for thirty days. Tucker v. American Intern. Group, Inc., 745 F. Supp. 2d 53, 59 (D.
Conn. 2010). Therefore, defendant’s motion to dismiss will be granted.
CONCLUSION
For the foregoing reasons, defendant’s motion to dismiss is GRANTED without
prejudice. Plaintiff may file an amended complaint consistent with this ruling within fifteen days
of this ruling’s filing date.

Dated this 7th day of September, 2012 at Bridgeport, Connecticut.

_______________/s/_____________________
WARREN W. EGINTON
SENIOR UNITED STATES DISTRICT JUDGE

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