Deutsche Bank National Trust Company v. Fadili et al

Filing 76

///ORDER granting 29 Motion for Summary Judgment; granting 31 Motion for Summary Judgment; granting in part and denying in part 32 Motion for Summary Judgment; denying 33 Motion for Summary Judgment. So Ordered by Magistrate Judge Landya B. McCafferty.(gla)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
Deutsche Bank National Trust
Company, Trustee for Long Beach
Mortgage Loan Trust 2006-5
v.

Civil No. 09-cv-385-LM

Alia Fadili, Stewart Title
Company, and Stewart Title
Guaranty Company

O R D E R
Plaintiff (hereinafter “Deutsche Bank”) has sued three
defendants in ten counts seeking various forms of relief for
claims related to a mortgage loan made by Deutsche Bank’s
predecessor interest to Alia Fadili (“Alia” or “Fadili”).
Fadili, in turn, asserts three counterclaims against Deutsche
Bank.

Before the court are motions for summary judgment filed

by each of the three defendants plus Deutsche Bank’s motion for
summary judgment.

For the reasons that follow, the summary

judgment motions filed by Stewart Title Company and Stewart
Title Guaranty Company are both granted; the summary judgment
motion filed by Fadili is granted as to Count III but otherwise
denied; and the summary judgment motion filed by Deutsche Bank
is denied.

Summary Judgment Standard
Summary judgment shall be granted “if the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to a judgment as a matter of law.”
Civ. P. 56(a).

Fed. R.

“The object of summary judgment is to “pierce

the boilerplate of the pleadings and assay the parties’ proof in
order to determine whether trial is actually required.’”

Dávila

v. Corporación de P.R. para la Diffusión Pública, 498 F.3d 9, 12
(1st Cir. 2007) (quoting Acosta v. Ames Dep’t Stores, Inc., 386
F.3d 5, 7 (1st Cir. 2004)).

“[T]he court’s task is not to weigh

the evidence and determine the truth of the matter but to
determine whether there is a genuine issue for trial.”

Noonan

v. Staples, Inc., 556 F.3d 20, 25 (1st Cir. 2009) (citations and
internal quotation marks omitted).
“Once the moving party avers an absence of evidence to
support the non-moving party’s case, the non-moving party must
offer ‘definite, competent evidence to rebut the motion,’”
Meuser v. Fed. Express Corp., 564 F.3d 507, 515 (1st Cir. 2009)
(citing Mesnick v. Gen. Elec. Co., 950 F.2d 816, 822 (1st Cir.
1991)), and “cannot rest on ‘conclusory allegations, improbable
inferences, [or] unsupported speculation,’” Meuser, 564 F.3d at
515 (quoting Welch v. Ciampa, 542 F.3d 927, 935 (1st Cir.
2008)).

When ruling on a party’s motion for summary judgment, a

trial court “constru[es] the record in the light most favorable
2

to the nonmovant and resolv[es] all reasonable inferences in
[that] party’s favor.”

Meuser, 564 F.3d at 515 (citing

Rochester Ford Sales, Inc. v. Ford Motor Co., 287 F.3d 32, 38
(1st Cir. 2002)).

Background
In their motions for summary judgment, defendants Stewart
Title Company (“Stewart Title”) and Stewart Title Guaranty
Company (“Stewart Guaranty”), incorporate statements of material
facts, with record citations, as to which they contend there is
no genuine issue to be tried, as required by Local Rule
7.2(b)(1).

In its objections to those motions, Deutsche Bank

identifies no factual disputes in the manner required by Local
Rule 7.2(b)(2).

In her motion for summary judgment, Fadili

incorporates a Rule 7.2(b)(1) factual statement, but Deutsche
Bank, in opposition, does not identify any factual dispute as
per Rule 7.2(b)(2).

However, both Stewart Title and Stewart

Guaranty have filed objections to Fadili’s summary judgment
motions in which they properly contest several of the facts she
says are undisputed.

Finally, in its motion for summary

judgment, Deutsche Bank does not include a Rule 7.2(b)(1)
factual statement.

That said, unless otherwise noted, the facts

that follow are undisputed.

3

This case involves two pieces of real estate and three
members of the Fadili family: Adel Fadili (“Adel”), his son Amir
Fadili (“Amir”), and defendant Alia Fadili, daughter of Adel and
sister of Amir.

By 1984, Adel had acquired two pieces of

lakefront real estate in Alton, a vacant lot and a lot with
improvements (“the house lot”).1
right of way.

Both lots are bisected by a

Once known as Mount Major Park Road, that right

of way is now known as Roger Street.

The residence situated on

the house lot is referred to in various documents involved in
this case as having the street address “132 Rogers Road” or some
variant thereof.
In December of 2001, Adel entered into a purchase and sale
agreement with Amir to convey to Amir property “located at Mount
Major Rd.”
115.

Def.’s Mot. Summ. J., Ex. J (doc. no. 31-12), at

Amir, in turn, obtained a loan to purchase the property.

Exhibit A to Amir’s mortgage included the legal description,
i.e., the metes and bounds, of the vacant lot.
(doc. no. 31-11), at 117-18.

See id., Ex. J

Stewart Title was the settlement

agent for the transaction between Adel and Amir.

The affidavit

of encumbrances prepared by Stewart Title listed one mortgage.
See id., Ex. J (doc. no. 31-12), at 20.

1

Exhibit A to that

Both the vacant lot and the house lot were assembled from
smaller parcels, but the details of their assembly are not
relevant to any issue before the court.
4

mortgage, i.e., Adel’s mortgage, was not the legal description
of the vacant lot but, rather, the legal description of the
house lot.

See Compl., Ex. D. (doc. no 1-4), at 3-4.

In the warranty deed Adel gave Amir, executed on January
16, 2006, the section describing the property conveyed says:
SEE ATTACHED EXHIBIT A FOR COMPLETE DESCRIPTION MADE A
Reference is hereby made to a deed from Harry R.
Thompson and Maybelle F. Thompson dated October 29,
1984 to Adel Fadili and recorded in the Belknap County
Registry of Deeds in Book 888, page 1000.
Def.’s Mot. Summ. J., Ex. A (doc. no. 29-3), at 7 (apparent
omission in the original).
address.

The deed does not include a street

The property described in Exhibit A to the deed from
See id. at 8-9.2

Adel to Amir is the vacant lot.

deed conveyed the vacant lot to Adel.

The Thompson

See Def.’s Mot. Summ. J.,

Ex. E (doc. no. 31-6), at 2-3.

2

In the deed from the Thompsons to Adel, the description of
Tract I begins: “A tract of land on the shore of Lake
Winnipesaukee between Alton Bay and West Alton, and being Lot S
as shown on Plan of Mt. Major Park . . . which tract is bounded
and described as follows:” Def.’s Mot. Summ. J., Ex. E (doc.
no. 31-6), at 2 (internal quotation marks omitted). In the deed
from Adel to Amir, the description of Tract I begins slightly
differently: “A tract of land with the buildings thereon on the
shore of Lake Winnipesaukee between Alton Bay and West Alton
an[d] being Lot S as shown on Plan of Mt. Major Park . . . which
tract is bounded and described as follows:” Id., Ex. G (doc.
no. 31-7), at 3 (emphasis added, internal quotation marks
omitted). It is unclear how or why a reference to “the
buildings thereon” was inserted into the legal description of
what all acknowledge to be a vacant lot. Notwithstanding that
difference, the two deeds utilize the same metes and bounds.
5

On January 20, 2006, Amir entered into a purchase and sale
agreement (“P&S”) with Alia to convey to her “land and building
situated at 132 Roger Road, Alton, NH 03809, and more
particularly described in a deed recorded at the Belknap County
Registry of Deeds in Book 1719, Page 728.”
J., Ex. A (doc. no. 29-3), at 3.

Def.’s Mot. Summ.

The deed to which the P&S

referred is the deed Adel gave Amir, which conveyed the vacant
lot.

See id. at 7.

The P&S between Amir and Alia also

provided, among other things:
Included in the sale as part of said premises are the
buildings, structures and improvement now thereon and
the fixtures belonging to the SELLER and used in
connection therewith including, if any, all wall-towall carpeting, drapery rods, automatic garage door
openers, venetian blinds, window shades, screens,
screen doors, storm windows and doors, awnings,
shutters, furnaces, heaters, heating equipment,
stoves, ranges, oil and gas burners and fixtures
appurtenant thereto, hot water heaters, plumbing and
bathroom fixtures, garbage disposers, electric and
other lighting fixtures, mantels, outside television
antennas, fences, gates, trees, shrubs, plants, and
ONLY IF BUILT IN, refrigerators, air conditioning
equipment, ventilators, dishwashers, washing machines
and dryers.
Id. at 3.

The foregoing language would appear to evince an

intent to convey an improved lot rather than an unimproved lot.
The P&S described above was forwarded to Stewart Title in
connection with a “Request to Order Title.”

See id. at 2.

In the warranty deed Amir gave Alia, executed on April 27,
2006, the section describing the property conveyed says:

6

A certain lot or parcel of land together with any
buildings thereon, situated in County of Belknap and
State of New Hampshire, more particularly described in
Exhibit A attached hereto and incorporated herein by
reference.
Def.’s Mot. Summ. J., Ex. G (doc. no. 31-8), at 2.
does not include a street address.

The deed

The property described in

Exhibit A to the deed from Amir to Alia is the vacant lot.

See

id. at 4-5.
Alia financed her purchase by obtaining a loan from, and
granting a mortgage to, Long Beach Mortgage Company (“Long
Beach”).

In preparation for making its loan to Alia, Long Beach

had the house lot appraised.

In the mortgage, also dated April

27, 2006, the property securing the loan is characterized as
follows:
the following described property located in BELKNAP
County, New Hampshire
LEGAL DESCRIPTION ATTACHED HERETO AND MADE A PART
HEREOF
which has the address of 132 ROGERS ROAD.
Def.’s Mot. Summ. J., Ex. J (doc. no. 31-12), at 68.

The legal

description attached to the mortgage is the legal description of
the vacant lot.

See id. at 95-96.

Despite incorporating the

legal description of the vacant lot, the mortgage includes a
second-home rider.

See id. at 69.

The same day Alia executed her mortgage, Long Beach
transferred the servicing of Alia’s loan to Washington Mutual
7

Bank (“Washington Mutual”).

On June 1, 2006, Long Beach

assigned Alia’s mortgage, and its rights thereunder, to Deutsche
Bank, pursuant to a Pooling and Servicing Agreement.

As a

result, the mortgage was placed into a trust, known as a real
estate mortgage investment conduit, or REMIC.
Stewart Title was the closing agent for the conveyance from
Amir to Alia.

Prior to the closing, Long Beach presented

Stewart Title with a document titled “Lender’s Instructions to
Closing Agent,” see Compl. Ex. N (doc. no. 1-14), that listed
various documents necessary to close the transaction, including
a policy of title insurance that met certain requirements.
In connection with the conveyance from Amir to Alia,
Stewart Guaranty issued a commitment for title insurance with an
effective date of April 4, 2006.

Schedule A to the commitment

includes the following characterizations of the property
involved:
2.

The estate or interest in the land described or
referred to in this Commitment and covered herein
is:
Fee Simple

3.

Title to said estate or interest in said land is
at the effective date vested in:
Amir A. Fadili by virtue of a Warranty Deed
from Adel Fadili dated January 16, 2002 and
recorded in the Belknap Registry of Deeds in
Book 1719, Page 728.

8

4.

The land referred to in this commitment is
described as follows:
132 Rogers Road in the
County of Belknap, and
described as set forth
hereto and made a part

City/Town of Alton,
the state of NH; and is
in Exhibit “A” attached
hereof.

Compl., Ex. O (doc. no. 1-15), at 5 (emphasis in the original).
The deed from Adel to Amir recorded in Book 1719, Page 728,
conveyed the vacant lot.

Exhibit A to the commitment is the

legal description of the vacant lot.

See id. at 6-7.

Subsequently, Stewart Guaranty issued a policy of title
insurance to Long Beach dated May 2, 2006.

Schedule A of that

policy provides:
4.

The insured mortgage and assignments thereof, if any,
are described as follows:
A mortgage from Alia Fadili to Longbeach
Mortgage Company in the amount of $840,000.00
dated April 27, 2006 and recorded in the Belknap
County Registry of Deeds in Book 2293, Page 730,
on May 2, 2006.

5.

The land referred to in this Policy is described
as follows:
SEE ATTACHED EXHIBIT “A” FOR COMPLETE LEGAL
DESCRIPTION MADE A PART HEREOF.
Property address: 132 Rogers Road, Alton NH.

Def.’s Mot. Summ. J., Ex. K (doc. no. 31-13), at 6.

Exhibit A

to the insurance policy is the legal description of the vacant
lot.

See id. at 12-13.

9

In 2005, Adel Fadili filed for Chapter 7 bankruptcy
protection.

The bankruptcy Trustee included the house lot in

the bankruptcy estate, and in July of 2008, filed a proposed
notice of intent to sell the property at public auction.
objected to the sale, as did Washington Mutual.

Alia

Washington

Mutual argued that while Adel conveyed the vacant lot to Amir in
2002, both Adel and Amir had intended for Adel to convey the
house lot.

Washington Mutual also pointed out that: (1) Long

Beach loaned Alia $840,000; (2) at the time of the loan, the
house lot was appraised at $1,050,000; and (3) the vacant lot
had an assessed value of $501,500.

Finally, Washington Mutual

indicated that it had filed a claim with Stewart Guaranty.
After a hearing, the bankruptcy court granted the Trustee’s
motion to sell the house lot.

Subsequently, the Trustee sold

the house lot to Growth Equity, LLC, of which Amir Fadili is a
member.
In its claim on the title-insurance policy, Washington
Mutual explained that both the deed from Amir to Alia and the
mortgage Alia gave Long Beach contained the legal description of
something other than the house lot, and that Adel remained the
record owner of the house lot.

Washington Mutual then asked

Stewart title to investigate the matter and to defend its
interest in the house lot.

Stewart Guaranty denied the claim,

pointing out that the policy defines “land” to be the land
10

described in Schedule A of the policy, and that Schedule A of
the policy Stewart Guaranty issued Long Beach did not mention
the house lot, thus precluding coverage under the policy.
Stewart Guaranty also pointed out the policy’s exclusion for
defects assumed or agreed to by the insured claimant, and stated
that because Long Beach had accepted the description of the
property to be insured, any defect associated with that property
description was excluded from coverage.
By August 1, 2008, Alia had stopped making her mortgage
payments.

In response, Washington Mutual sent her a notice of

intent to foreclose.

Thereafter, Deutsche Bank, as trustee for

Long Beach Mortgage Loan Trust 2006-5, notified Alia that it had
been instructed, by Washington Mutual, to foreclose on her
mortgage.
Based on the foregoing, Deutsche Bank has sued: (1) Alia
Fadili, for breach of contract (Count I), promissory estoppel
(Count III), negligence (Count V), negligent misrepresentation
(Count IX), and unjust enrichment (Count X); Stewart Title, for
negligence (Count IV) and breach of contract (Count VIII); and
(3) Stewart Guaranty, for breach of contract (Counts VI and
VII).

Deutsche Bank also seeks, in Count II, a declaratory

judgment that it is entitled to foreclose against the vacant lot
in order to partially recover what it is owed on its loan to
Fadili.

Deutsche Bank filed this action on November 16, 2009.
11

Fadili, in turn, asserts counterclaims for breach of contract
and negligence against Deutsche Bank, and seeks a declaratory
judgment that the mortgage on the vacant lot is invalid and asks
for an order discharging it.

Discussion
Stewart Title, Stewart Guaranty, and Fadili have all moved
for summary judgment on Deutsche Bank’s claims, while Deutsche
Bank has also moved for summary judgment, presumably on Fadili’s
counterclaims.

The court considers each of those four motions

in turn.
A. Stewart Title’s Motion
Deutsche Bank asserts claims against Stewart Title for both
negligence (Count IV) and breach of contract (Count VIII).

In

Count IV, Deutsche Bank claims that Stewart breached its duty to
Long Beach “[b]y failing to recognize that the description of
the property which was attached to the title, and the Mortgage,
as well as the title insurance policy was not the [house lot].”
Compl. ¶ 62.

As for the injury it claims to have suffered,

Deutsche Bank alleges that “[a]s a result of Stewart Title’s
breach, Adel Fadili retained ownership of the [house lot] which

12

property was eventually sold by the Chapter 7 Trustee preventing
the Plaintiff from ever reforming the mortgage.”3

Compl. ¶ 64.

In Count VIII, Deutsche Bank alleges that Stewart Title was
obligated under its contract with Long Beach “to perform a title
examination of the [house lot] and confirm that the loan being
given to Alia Fadili was secured by a mortgage for the [house
lot].”

Compl. ¶ 93.

Deutsche Bank further alleges that “[t]he

closing instructions (see exhibit “N”) which were executed
[i.e., carried out] by Stewart Title required Stewart Title to
give the Plaintiff a valid ALTA lender’s title insurance policy
insuring that Long Beach held a first mortgage secured by the
subject property.”4

Compl. ¶ 94.

As best the court can tell,

and the complaint is far from clear, the contract on which
Deutsche Bank bases its claims consists of: (1) Stewart Title’s
agreement to perform the title search specified in the “Request
for Order of Title,” which incorporated the P&S; and (2) its
agreement to serve as closing agent and perform the tasks
described in the “Lender’s Instructions to Closing Agent.”

3

How a title search conducted in connection with the
transaction from Amir to Alia could have caused Adel to retain
ownership of the house lot is not at all clear. At the very
least, Deutsche Bank takes several links out of the chain of
causation.
4

While the instructions did require Stewart Title to send a
title insurance policy to Long Beach, and also indicate certain
policy requirements, those instructions nowhere identify the
property to be covered by the title insurance policy.
13

Deutsche Bank claims that Stewart Title breached its contract
with Long Beach “by failing to properly review the title
examination, to attach the proper description to the Mortgage
and failing to attach the proper description to the policy,”
Compl. ¶ 95.
Stewart Title argues that both the negligence and breach of
contract claims are barred by the statute of limitations, and it
makes additional arguments specific to each claim.
Bank objects.

Deutsche

Its objection includes a one-paragraph statement

of undisputed facts, and concludes by contending that “genuine
material issues of fact remain to be resolved at trial.”
Obj. (doc. no. 40-1), at 8.

Pl.’s

But, Deutsche Bank’s objection does

not “incorporate a short and concise statement of material
facts, supported by appropriate record citations, as to which
[it] contends a genuine dispute exists so as to require a
trial,” as mandated by Local Rule 7.2(b)(2).

That said, the

court begins with the statute of limitations, and then turns to
each of the two claims.
1. Statute of Limitations
Stewart Title argues that because the acts or omissions on
which Deutsche Bank bases its claims occurred more than three
years before it filed suit, those claims are barred by the
statute of limitations.

Deutsche Bank contends that because it

filed suit within three years after it learned that it had been
14

injured by Stewart Title’s alleged acts and omissions, its
action was timely filed.

The court does not agree.

“It is . . . commonly accepted that in diversity cases
state statutes of limitations apply.”

Godin v. Schencks, 629

F.3d 79, 88 (1st Cir. 2010) (citing Guaranty Trust Co. v. York,
326 U.S. 99, 110 (1945)); see also Feddersen v. Garvey, 427 F.3d
108, 112 (1st Cir. 2005).

The New Hampshire statute of

limitations for personal actions provides:
Except as otherwise provided by law, all personal
actions, except actions for slander or libel, may be
brought only within 3 years of the act or omission
complained of, except that when the injury and its
causal relationship to the act or omission were not
discovered and could not reasonably have been
discovered at the time of the act or omission, the
action shall be commenced within 3 years of the time
the plaintiff discovers, or in the exercise of
reasonable diligence should have discovered, the
injury and its causal relationship to the act or
omission complained of.
N.H. Rev. Stat. Ann. (“RSA”) § 508:4, I.

Both Counts IV and

VIII state claims that qualify as personal actions.

For

purposes of RSA 508:4, I, “[p]ersonal actions . . . include
those to recover for personal injury . . . and [breach of]
contract.”

State v. Lake Winnipesaukee Resort, LLC, 159 N.H.

42, 48 (2009) (citing Therrien v. Sullivan, 153 N.H. 211, 213
(2006) (personal injury); A&B Lumber Co. v. Vrusho, 151 N.H.
754, 756 (2005) (breach of contract)).

15

“[T]he defendant bears the burden of proving that [the
statute of limitations] applies in a given case.”

Billewicz v.

Ransmeier, 161 N.H. 145, 149 (2010) (quoting Glines v. Bruk, 140
N.H. 180, 181 (1995).

“The defendant meets that burden by a

showing that the action was not brought . . . within 3 years of
the act or omission complained of.”

Billewicz, 161 N.H. at 149

(citation and internal quotation marks omitted).
“Once the defendant has established that the statute of
limitations would bar the action, the plaintiff has the burden
of raising and proving that the discovery rule is applicable to
an action otherwise barred by the statute of limitations.”
Beane v. Dana S. Beane & Co., 160 N.H. 708, 713 (2010) (quoting
Glines, 140 N.H. at 181).

The discovery rule, in turn,

“is a two-pronged rule requiring both prongs to be
satisfied before the statute of limitations begins to
run.” Big League Entm’t [v. Brox Indus.], 149 N.H.
480,] 485 [(2003)]. “First, a plaintiff must know or
reasonably should have known that it has been injured;
and second, a plaintiff must know or reasonably should
have known that its injury was proximately caused by
conduct of the defendant.” Id. “Thus, the discovery
rule exception does not apply unless the plaintiff did
not discover, and could not reasonably have
discovered, either the alleged injury or its causal
connection to the alleged negligent act.” Perez [v.
Pike Indus.], 153 N.H. (158,] 160 [(2005)].
Beane, 160 N.H. at 713 (parallel citations omitted).
Here, it is undisputed that Deutsche Bank filed this action
more than three years after the acts or omissions on which it
bases its negligence and breach of contract claims against
16

Stewart Title.5

Thus, the only question is whether those claims

are saved by the discovery rule.
Deutsche Bank argues that it is entitled to relief under
the discovery rule because: (1) it first became aware that it
had been injured by Stewart Title’s conduct in August of 2008,
when Fadili’s counsel informed Washington Mutual of his belief
that Stewart Title had violated various duties it owed Long
Beach by failing to recognize that the deed from Amir to Alia,
Alia’s mortgage, and the 2006 title-insurance policy all
incorporated the legal description of the vacant lot; and (2) it
could not reasonably have discovered its injury at the time
Stewart Title committed the allegedly injurious acts.

Stewart

Title disagrees, arguing that: (1) Deutsche Bank’s discovery
responses demonstrate that Deutsche Bank cannot establish that
Long Beach did not know of its injury, i.e., the fact that it’s
loan was secured by a mortgage on the vacant lot, at the time of
the closing; and (2) Deutsche Bank has not alleged any facts
from which it could be determined that Long Beach could not have
discovered its injury at the time of the closing.
For the purpose of resolving the matter before it, the
court will assume that Long Beach did not know of its injury at
the time of the closing.

That, however, is not enough; Deutsche

5

Those acts or omissions took place no later than April 27,
2006, and this action was filed in November of 2009.
17

Bank also bears the burden of proving that Long Beach could not
reasonably have discovered its injury at the time of the
closing.

It has not done so.

Regarding whether Long Beach could reasonably have
discovered its injury, Deutsche Bank argues:
Plaintiff’s predecessor, Long Beach, hired Defendant
Stewart Title to perform services which Long Beach
itself had no expertise to perform. Because it had no
expertise, Long Beach also had no way of checking on
Defendant’s work. It would have had to have hired
another closing company or law office to check the
work of Defendant Stewart Title. . . . Because of
the level of expertise required to discover the error
in the title insurance description and the mortgage
Plaintiff could not have been expected to discover the
error, until it was discovered by persons able to make
such determination.
Pl.’s Mem. of Law (doc. no. 40-1), at 7 (citing Sevy v. Sec.
Title Co. of S. Utah, 902 P.2d 629 (Utah 1995)).

If Long Beach

had been injured by making a loan that was secured by a mortgage
on a property with a defective title, then Deutsche Bank’s
argument might be meritorious.

But here, the injury did not

result from a title defect; Deutsche Bank claims that Long Beach
was injured by taking a mortgage on a property that had a
perfectly good title, but that was not the property Long Beach
thought it was getting a mortgage on.

Construing Deutsche

Bank’s claim in the most favorable way possible, it asserts that
Stewart Title breached its duty by failing to ascertain that the
street address listed in the purchase and sale agreement was not

18

the address of the property conveyed by the deed that was also
listed in the agreement.

Stated less generously, Deutsche

Bank’s claim is that Stewart Title failed to discover one or
more of the following: (1) the property Amir conveyed to Alia
was not the property they intended him to convey; or (2) the
property Long Beach accepted as security for its loan to Alia
was not the property it thought it was getting.
Thus, the issue is not the quality of Stewart Title’s title
search or Long Beach’s ability to check that work; the issue is
the content of the instructions, presumably the description of
the property in the P&S from Amir to Alia, that caused Stewart
Title to research the vacant lot rather than the house lot.6

It

is not a stretch to presume that Long Beach could reasonably
have discovered, at the time of the closing, that the P&S it
sent Stewart Title listed the street address of the house lot
and a registry of deeds book and page reference to the deed that
conveyed the vacant lot from Adel to Amir.

In any event,

Deutsche Bank has not argued, much less proven, otherwise.
Accordingly, Deutsche Bank is not entitled to the protection of
the discovery rule.

6

The court notes that when Stewart Title was asked to
perform a title search and was presented with a P&S that listed
both a street address and a registry of deeds book and page
reference, it can hardly be faulted for conducting a title
search based on the only deed reference it was given rather than
trying to conduct a search based on a street address.
19

While Stewart Title is entitled to summary judgment because
Deutsche Bank’s claims are time-barred, the court further
considers Deutsche Bank’s two claims on the merits.
2. Count IV: Negligence
Stewart Title argues that it is entitled to summary
judgment on Deutsche Bank’s negligence claim, described in
detail above, because: (1) it owed no duty to Deutsche Bank; (2)
any negligence claim that Long Beach might have against Stewart
Title was never transferred to Deutsche Bank; and (3) Deutsche
Bank’s negligence claim is barred by the economic-loss doctrine.
Deutsche Bank does not respond to any of those three arguments.
The court is persuaded by Stewart Title’s argument based on the
economic-loss doctrine.
The economic-loss doctrine, which has been adopted in New
Hampshire, see Plourde Sand & Gravel Co. v. JGI Eastern, Inc.,
154 N.H. 791, 794 (2007), “is a ‘judicially-created remedies
principle that operates generally to preclude contracting
parties from pursuing tort recovery for purely economic or
commercial losses associated with the contract relationship,’”
id. (quoting Tietsworth v. Harley-Davidson, Inc., 677 N.W.2d
233, 241 (Wis. 2004)).

In New Hampshire, “where a plaintiff may

recover economic loss under a contract, generally a cause of
action in tort for purely economic loss will not lie.”

20

Plourde,

154 N.H. at 794 (citing Ellis v. Robert C. Morris, Inc., 128
N.H. 358, 363 (1986)).
Here, Deutsche Bank alleges purely economic damages arising
out of Long Beach’s contractual commercial relationship with
Stewart Title.

And, the factual allegations supporting Deutsche

Bank’s negligence claim are virtually identical to those
supporting its breach of contract claim.

Compare Compl. ¶ 61

(“Stewart Title had a duty to Long Beach to perform its services
in a reasonable and professional manner and to make sure that
Long Beach had a security interest in the [house lot].”) with
Compl. ¶ 93 (“The contract between Long Beach and Stewart Title
required Stewart Title to perform a title examination of the
[house lot] and confirm that the loan being given to Alia Fadili
was secured by a mortgage for the [house lot].”).

Moreover, as

Deutsche Bank does not respond in any way to Stewart Title’s
invocation of the economic-loss doctrine, it necessarily does
not identify “a duty that lies outside the terms of the
contract,” Plourde, 154 N.H. at 794, which might support an
exception to the economic-loss doctrine, see id.

Accordingly,

the court concludes that Deutsche Bank’s negligence claim
against Stewart Title is barred by the economic-loss doctrine.
Thus, Stewart Title is entitled to summary judgment on Count IV.

21

3. Count VII: Breach of Contract
Stewart Title argues that it is entitled to summary
judgment on Deutsche Bank’s breach of contract claim, described
in detail above, because: (1) Deutsche Bank was not a party to
any contract with Stewart Title; (2) Long Beach never assigned
any contract rights against Stewart Title to Deutsche Bank; and
(3) Deutsche Bank is not a third-party beneficiary of any
contract between Long Beach and Stewart Title.

Deutsche Bank

addresses only one of Stewart Title’s three arguments,
contending that it is, in fact, a third-party beneficiary of
Long Beach’s agreement with Stewart Title.
In New Hampshire, “[a] breach of contract occurs when there
is a ‘[f]ailure without legal excuse to perform any promise that
forms the whole or part of a contract.’”

Bronstein v. GZA

GeoEnvironmental, Inc., 140 N.H. 253, 255 (1995) (quoting
Black’s Law Dictionary 188 (6th ed. 1990)).

Regarding standing

to assert a claim for breach of contract, “the general rule [is]
that a non-party to a contract has no remedy for breach of
contract.”
697 (2011).

Brooks v. Trustees of Dartmouth Coll., 161 N.H. 685,
The third-party beneficiary doctrine is an

exception to that general rule.

See id. (citing Arlington Trust

Co. v. Estate of Wood, 123 N.H. 765, 767 (1983)).
Here, it is undisputed that Deutsche Bank was not a party
to any agreement with Stewart Title.
22

In response to Stewart

Title’s multi-pronged challenge to Deutsche Bank’s standing to
bring a claim for breach of contract, Deutsche Bank states that
“Stewart Title issued a title insurance commitment and title
policy designating the proposed insured and later the insured as
‘Long Beach Mortgage Co., its successors and/or assigns, as
their interests may appear.’”
1), at 3.

Pl.’s Mem. of Law (doc. no. 40-

Then it argues that “[a] fair and reasonable reading

of the contract agreed to by Stewart Title (Exhibit N of the
Complaint, Document #1 and Exhibits O and P thereof) makes it
clear that the contract between Stewart Title and Long Beach was
to benefit a third party, namely, the third party assignee of
the mortgage granted by Fadili.”

Id.

While that argument seems

to mingle two different theories under which Deutsche Bank might
have standing, i.e., as an assignee and as a third-party
beneficiary, the balance of the memorandum makes it clear that
Deutsche Bank is relying on its putative rights as a third-party
beneficiary of the agreement between Stewart Title and Long
Beach.
In Brooks, the New Hampshire Supreme Court explained the
third-party beneficiary doctrine this way:
A third-party beneficiary relationship exists if:
(1) the contract calls for a performance by the
promisor, which will satisfy some obligation owed by
the promisee to the third party; or (2) the contract
is so expressed as to give the promisor reason to know
that a benefit to a third party is contemplated by the
promisee as one of the motivating causes of his making
23

the contract. Tamposi Associates v. Star Mkt. Co.,
119 N.H. 630, 633 (1979). “A benefit to a third party
is a ‘motivating cause’ of entering into a contract
only where the promisee intends to give the
beneficiary the benefit of the promised performance.”
Grossman v. Murray, 144 N.H. 345, 348 (1999)
(quotation omitted); see Restatement (Second) of
Contracts § 302(1)(b) (1981).
161 N.H. at 697-98 (parallel citations omitted).

Deutsche Bank

does not argue that Stewart Title’s performance under its
agreement with Long Beach satisfied any obligation owed by Long
Beach to Deutsche Bank.

Rather, it argues that the contract

between Long Beach and Stewart Title gave Stewart Title reason
to know that Long Beach was motivated to enter into the
agreement by its desire to confer a benefit on a third party
such as itself.
To assess Deutsche Bank’s argument, it is first necessary
to focus on the contract at issue.7

The only agreements between

Deutsche Bank and Stewart Title were those under which Stewart
Title: (1) performed a title search, as guided by the P&S
between Amir and Alia; and (2) conducted the closing.
Based on the undisputed factual record, there is nothing in
the agreements between Long Beach and Stewart Title that gave
Stewart Title reason to know that Long Beach even thought of

7

Deutsche Bank complicates this issue by conflating Stewart
Title and Stewart Guaranty; it treats them as one and the same
and then bases its argument largely on the title insurance
commitment and the policy of title insurance that were issued by
Stewart Guaranty, not Stewart Title.
24

conferring a benefit on a third party by entering into those
agreements, much less that any such third-party benefit was a
motivating factor.

While it might be plausibly argued that the

policy of title insurance issued to Long Beach was intended to
protect both Long Beach and any subsequent assignee of the
mortgage it held from Alia, Stewart Title did not issue the
policy of title insurance; Stewart Guaranty did.

In sum,

Stewart Title is entitled to summary judgment on Count VIII on
grounds that Deutsche Bank has no standing to sue on the
contracts under which Stewart Title performed its title search
or conducted the closing of the transaction between Amir and
Alia.
B. Stewart Guaranty’s Motion
Deutsche Bank asserts two claims against Stewart Guaranty
for breach of contract (Counts VI and VII).

Specifically, in

Count VI, Deutsche Bank alleges that “Stewart Title[ ] failed to
provide Long Beach with a valid security interest in the [house
lot] or a valid final lender’s title insurance policy,” Compl. ¶
76, and claims that “[s]uch failure by Stewart Title was a
breach of the title commitment issued by Stewart Guaranty,” id.
¶ 77.

Deutsche Bank alleges, in Count VII, that “[t]he purpose

of the Policy was to insure that Long Beach would have a first
mortgage secured by the [house lot],” Compl. ¶ 83, and asserts
that Stewart Guaranty breached its duties under the policy by
25

denying the claim that Washington Mutual made, in which it asked
Stewart Title to defend its interests in the house lot in Adel’s
bankruptcy proceeding.

Given the claim in Count VI that Stewart

Guaranty did not issue a valid policy of title insurance, the
court will presume that Count VII, which asserts rights under
that policy, was pled in the alternative.

Stewart Guaranty

moves for summary judgment on both counts.
1. Breach of the Title Commitment (Count VI)
Stewart Guaranty argues that it is entitled to summary
judgment on Count VI because: (1) its obligations, and potential
liability, under the title commitment expired with its issuance
of a policy of title insurance; and (2) the policy it issued
conformed in all respects with the promises it made in the
commitment.

Deutsche Bank objects.

Count VI is off kilter in a number of ways.

It alleges

that Stewart Title failed to provide Long Beach with a “valid
final lender’s title insurance policy,” but nowhere alleges that
Stewart Title, as opposed to Stewart Guaranty, was even in the
business of providing title insurance.

The undisputed factual

record demonstrates that the title insurance policy in this case
was issued by Stewart Guaranty, which fact Deutsche Bank appears
to acknowledge in its objection to summary judgment.

Moreover,

neither the complaint nor Deutsche Bank’s objection to summary
judgment indicate: (1) what, exactly, is invalid about the
26

policy Stewart Guaranty issued;8 or (2) how, as the complaint
asserts, a “failure by Stewart Title” could possibly constitute
“a breach of the title commitment issued by Stewart Guaranty.”
That said, the court turns to the contract Deutsche Bank
claims to have been breached, the commitment for title insurance
issued by Stewart Guaranty.

In that commitment, Stewart

Guaranty promised to issue a policy of title insurance on the
property identified in Schedule A.

Schedule A describes the

property in terms of: (1) a registry of deeds book and page
reference to the conveyance of the vacant lot from Adel to Amir;
(2) the legal description of the vacant lot; and (3) the street
address of the house lot.

The policy that issued described the

property in the very same way.

So, Stewart Guaranty issued

exactly the title insurance policy it promised it would issue.
In its objection to summary judgment, Deutsche Bank
complains that Stewart Guaranty has cited no authority “to
support its theory that because the title policy conforms with
the title commitment,” Stewart Guaranty “has met its obligation
to issue a proper title insurance policy.”
(doc. no. 39-1), at 6.

Pl.’s Mem. of Law

But no authority is required for the

8

Obviously, Deutsche Bank is unhappy that Stewart Guaranty
construes the policy as insuring the validity of the title to
the vacant lot rather than the house lot, but there is a
difference between an invalid policy, i.e., one that provides no
coverage at all, and a policy that does provide coverage, but
for a different title than the one the policy holder thought it
covered, which is the situation here.
27

proposition that a party who fulfills the promises made in an
agreement cannot be held liable for breaching that agreement.
Here, Stewart Guaranty promised to issue a policy of title
insurance covering a specified property, and the undisputed
factual record demonstrates that it did so.

That entitles

Stewart Guaranty to summary judgment on Count VI.
Deutsche Bank also argues that there is a genuine issue of
material fact regarding whether the title insurance policy
conforms to the commitment.

More specifically, Deutesche Bank

says: “Since Section 5, Schedule A of the final title policy is
ambiguous [because it refers to both the legal description of
the vacant lot and the street address of the house lot], there
are genuine issues of material fact(s) remaining which must be
resolved by a jury.”

Pl.’s Mem. of Law (doc. no. 39-1), at 6.

There are two problems with that argument.
First, the property description in the final policy is
virtually identical to the property description in the
commitment.

Any ambiguity in one is also in the other.

Thus,

the existence of an ambiguity in the final policy says nothing
about whether the policy conforms to the commitment.

An

ambiguity in the final policy might matter if Deutsche Bank were
claiming that the commitment was a promise to insure the title
to the house lot that Stuart Guaranty breached by issuing a
policy on the vacant lot.

In such a case, if the commitment
28

unambiguously promised to insure title to the house lot, and the
final policy could reasonably be construed either as insuring
the house lot or the vacant lot, then the ambiguity on which
Deutsche Bank relies would be meaningful.
Deutesche Bank’s claim.

But that is not

Rather, it claims that Long Beach

believed all along that it was getting a mortgage on, and title
insurance for, the house lot.

Second, even if the alleged

ambiguity in Schedule A of the title insurance policy did have a
bearing on resolving the claim stated in Count VI, that
ambiguity is a question of law for the court, not a question of
fact for a jury.

See Progressive N. Ins. Co. v. Argonaut Ins.

Co., 161 N.H. 778, 780 (2011) (“The interpretation of insurance
policy language, like any contract language, is ultimately an
issue of law for [the] court to decide.”) (citing Marikar v.
Peerless Ins. Co., 151 N.H. 395, 397 (2004)).
In sum, Stewart Guaranty is entitled to summary judgment on
the breach-of-contract claim stated in Count VI.
2. Breach of the Policy of Title Insurance (Count VII)
Stewart Guaranty argues that it is entitled to summary
judgment on Count VII because the policy it issued unambiguously
insures the validity of the title to the vacant lot and, thus,
did not obligate it to protect Deutsche Bank’s interests (if
any) in the house lot.

Deutsche Bank counters that inclusion of

both the street address of the house lot and the legal
29

description of the vacant lot in the policy created an ambiguity
that must be resolved in its favor.

Resolution of that

ambiguity in its favor, in turn, would provide the basis for its
claim that Stewart Guaranty breached its duties under the title
insurance policy by failing to protect Washington Mutual’s
interests in the house lot.
The court notes that it is not at all clear what benefit
Deutsche Bank would gain from its proposed construction of the
title insurance policy.
title.

The policy insures the validity of a

If, as Deutsche Bank contends, the policy vouchsafed the

validity of the title to the house lot, the only entity who
would have benefitted from a defense of that title in Adel’s
bankruptcy case is the bankruptcy Trustee, who needed to have
good title to the house lot, through Adel, before selling it at
auction.

When Washington Mutual challenged the bankruptcy

Trustee’s right to sell the house lot, a defense of the title to
that property, which is what Stewart Guaranty would have been
obligated to provide, would have done Washington Mutual no good,
as the most recent grantee in the chain of title to the house
lot was Adel.

What Washington Mutual needed in the bankruptcy

court was a successful attack on the titles to both the house
lot and the vacant lot such that title to the house lot went to
Alia.

Stewart Guaranty’s obligations under the title insurance

policy are limited to defending a single title, and do not
30

extend to prosecuting Deutsche Bank’s claim on the security Long
Beach mistakenly thought it was getting in exchange for the loan
it made to Alia.
Be that as it may, both parties agree that resolution of
this issue turns on the proper construction of the provision in
the policy that describes the property subject to coverage.

As

noted above, interpretation of that policy language is a
question of law for the court.
780.

See Progressive, 161 N.H. at

When interpreting an insurance policy, the court is

obligated to construe its language “as would a reasonable person
in the position of the insured based upon a more than casual
reading of the policy as a whole.”

N. Sec. Ins. Co. v. Connors,

161 N.H. 645, (2011) (citing Philbrick v. Liberty Mut. Fire Ins.
Co., 156 N.H. 389, 390 (2007)).

To do so, the court “look[s] to

the plain and ordinary meaning of the policy’s words in
context.”

Progressive, 161 N.H. at 781 (citation omitted).

Moreover:
Policy terms are construed objectively, and when the
terms of a policy are clear and unambiguous, [the
court] accord[s] the language its natural and
ordinary meaning. When an insurance policy’s
language is ambiguous, however, and one reasonable
interpretation favors coverage, [the court]
construe[s] the policy in the insured’s favor and
against the insurer.
Id. (citations omitted).

Ambiguity exists, however, only “if

the policy is reasonably susceptible of more than one

31

interpretation.”

Northern Security, 161 N.H. at 650.

Stewart

Guaranty argues that there is no ambiguity to construe in
Deutsche Bank’s favor.

The court agrees.

Schedule A of the policy describes the insured mortgage as
the mortgage from Alia to Long Beach.

That mortgage

incorporates the legal description of the vacant lot.

Schedule

A also contains two entries under the item calling for a
description of the land referred to in the policy.

The first

entry is: “SEE ATTACHED EXHIBIT ‘A’ FOR COMPLETE LEGAL
DESCRIPTION MADE A PART HEREOF.”
(doc. no. 13-3), at 6.

Def.’s Mot. Summ. J., Ex. K

The second entry, separated from the

first entry by several blank lines, is: “Property address: 132
Rogers Road, Alton NH.”

Id.

Stewart Guaranty construes Schedule A as providing that the
policy applies to the property whose legal description is
appended as Exhibit A, i.e., the vacant lot.

Deutsche Bank’s

alternative construction, that Schedule A provides that the
policy applies to the house lot, is not reasonable.

First of

all, Schedule A identifies the insured mortgage by book and page
number in the registry of deeds, and the mortgage so identified
incorporates the legal description of only one property, the
vacant lot.

Second, in the portion of Schedule A that

identifies the land referred to in the policy, the reference to
the vacant lot comes first and includes a one-page legal
32

description while the seven-word reference to the house lot
comes second and does not include a legal description.

When

construing a policy of title insurance that identifies two
properties, one by legal description and the other by street
address, it is not reasonable to construe the policy as applying
to the property identified by the street address, in that titles
are not indexed by street address in the registry of deeds.
Moreover, Deutsche Bank’s construction of the policy is also
unreasonable in that under it, a seven-word reference to a
street address – meaningless information for title research –
would turn the one-page legal description attached to the policy
into mere surplussage, a construction practice that is
judicially disfavored.

See Progressive, 161 N.H. at 782 (citing

Int’l Surplus Lines Ins. Co. v. Mfrs. & Merchs. Mut. Ins. Co.,
140 N.H. 15, 19 (1995)).

As between a construction that turns

seven lines into surplussage and one that does the same to an
entire one-page attachment, the court has no trouble concluding
that the former is reasonable while the latter is not.
Because there is no ambiguity to construe in Deutsche
Bank’s favor, Stewart Guaranty is entitled to summary judgment
on Deutsche Bank’s claim, stated in Count VII, that it breached
its duties under the policy of title insurance Stewart Guaranty
issued to Long Beach.

33

C. Alia Fadili’s Motion
Deutsche Bank asserts claims against Alia Fadili for breach
of contract (Count I), promissory estoppel (Count III),
negligence (Count V), negligent misrepresentation (Count IX),
and unjust enrichment (Count X).

Deutsche Bank also seeks, in

Count II, a declaratory judgment that it is entitled to
foreclose on the vacant lot.
on all but Count X.

Fadili moves for summary judgment

She also seeks summary judgment on her

counterclaim for breach of contract.

Deutsche Bank objects.

Stewart Title and Stewart Guaranty also object,
principally, it seems, to challenge Fadili’s Rule 7.2(b)(1)
statement of facts.

Specifically, Stewart Title contests: (1)

“any assertion that any contractual or other relationship
existed between it and the Plaintiff, Deutsche Bank as Trustee,”
Def.’s Obj. (doc. no. 36), at 1; (2) “any assertion that it
acted negligently,” id. at 2; and (3) “[t]he assertion that Adel
attempted to convey 132 Roger Street to Amir,” id.

Stewart

Guaranty contests: (1) “[t]he assertion that any parcel conveyed
from Dreher9 to Adel, or from Adel to Amir or from Amir to Alia
was known as 132 Roger Street,” Def.’s Mem. of Law (doc. no. 371), at 17; (2) “[t]he assertion that Adel attempted to convey
132 Rogers Road to Amir,” id. at 18; (3) “[t]he assertion that
9

Gerald W. Dreher and Martha K. Dreher granted Adel a deed
to one part of the house lot. The remainder came in a deed to
Adel from Bradford H. and Virginia S. Jones.
34

Amir intended to convey [the house lot] to Alia,” id.; (4)
“[t]he assertion that any of the conveyances between the
Fadili’s was intended to transfer ownership of any particular
parcel,”10 id. at 19; and (5) “[t]he assertion that Alia intended
to acquire or mortgage 132 Rogers Road,” id. at 20.
1. Breach of Contract (Count I)
In Count I, Deutsche Bank claims that Fadili has breached
her promissory note by failing to make payments on it since
August of 2008, and breached the terms and conditions of her
loan by failing to give Long Beach a mortgage on the house lot.
Fadili argues that she is entitled to summary judgment on Count
I because: (1) Deutsche Bank does not hold the note and thus,
cannot enforce it; and (2) her performance on the note is
excused due to a failure of consideration and by the doctrines
of impossibility of performance and commercial frustration, due
to Deutsche Bank’s failure to retain title to the house lot
throughout the life of the loan.

Deutsche Bank disagrees,

categorically.

10

In addition to contesting that factual statement, Stewart
Guaranty goes on to argue that “evidence exists to create a
triable factual issue that the entire series of conveyances was
merely a device or series of devices to hide assets from
creditors without changing the beneficial or equitable ownership
thereof.” Def.’s Mem. of Law (document no. 37-1), at 19.
35

a. Validity of the Mortgage Deed
In an argument that is not explicitly tethered to any of
Deutsche Bank’s claims against her, Fadili contends that the
mortgage deed in this case is void ab initio because neither she
nor Long Beach intended for her loan to be secured by a mortgage
on the vacant lot.

While that may be, it is certain that

neither party intended for the loan to be unsecured.

More

importantly, what Fadili does not explain, and what the court
cannot understand, is how her position in this case would be
aided by a determination that she gave Long Beach nothing, in
the form of a void mortgage deed, in exchange for a loan of
$840,000.
Moreover, neither of the two cases Fadili cites in support
of her voidness argument is at all supportive of her position.
Keybank National Association v. NBD Bank stands for the
proposition that “[i]n order for a mortgage to be effective, it
must contain a description of the land intended to be covered
sufficient to identify it,” 699 N.E.2d 322, 326 (Ind. Ct. App.
1998) (citation omitted).

Here, Fadili does not challenge the

sufficiency of the legal description in her mortgage deed.

The

problem she faces is that the legal description in the deed
leads one directly to the vacant lot.

Moynihan v. Brennan, in

turn, was a case in which the court reformed a deed to bring it
in line with the intent of the grantor and the grantee by
36

reducing the amount of land the deed conveyed, not by
substituting one legal description for another, see 77 N.H. 273,
275 (1914).

For these reasons, Fadili’s reliance on Keybank and

Moynihan is unavailing.
b. Standing to Sue on the Note
Fadili argues that to the extent Count I is based on her
failure to perform under the promissory note, she is entitled to
summary judgment because: (1) Deutsche Bank’s complaint does not
adequately allege that it has standing to sue on the note; and
(2) she has produced evidence that Deutsche Bank does not hold
the note.

Because Deutsche Bank has responded by producing

evidence that it does, in fact, hold the note, see Pl.’s Mem. of
Law, Ex. 3 (doc. no. 38-4), Deutsche Bank has created a triable
issue of material fact and, as a result, Fadili is not entitled
to summary judgment on grounds that Deutsche Bank lacks standing
to sue on the note.
c. Excusal of Performance
Fadili further argues that because Deutsche Bank does not
have title to the house lot, it “cannot fulfill its obligation
to restore [her] to the full title both parties thought she
owned prior to the mortgage deed,” Def.’s Mem. of Law (doc. no.
32-1), at 11.

Fadili argues that this renders her obligations

under the promissory note “excused” as a matter of law due to

37

failure of consideration, impossibility of performance, and
commercial frustration.
As a preliminary matter, because Amir never conveyed the
house lot to Alia, due to the fact that he never owned it in the
first place, it is misleading to speak of Deutsche Bank’s
obligation to restore full title in the house lot to Alia.
Moreover, while she characterizes Deutsche Bank’s inability to
“restore” her title to the house lot as a failure of
consideration, she ignores completely the consideration Long
Beach provided, namely the $840,000 it loaned Alia, money Alia
then paid to Amir.

In Deutsche Bank’s view, if there is any

failure of consideration in this case, it is based on Amir’s
conveyance of the vacant lot in exchange for a purchase price
based on the value of the house lot.

Amir’s retention of the

proceeds from Alia’s loan from Long Beach is the “elephant in
the room” in this case.
Fadili’s failure-of-consideration argument also misses two
key points.

First, while Deutsche Bank does not hold a mortgage

on the house lot, it does hold a mortgage deed to the vacant
lot.

If Fadili were to pay off the loan, that mortgage would be

discharged, and Fadili would hold full title to the vacant lot.
Second, Long Beach’s loan to Fadili was secured by a mortgage on
the vacant lot rather than the house lot because Long Beach
commissioned a title search based on the property description in
38

the P&S.

The P&S, in turn, was executed by Amir and Alia.

If

the P&S had incorporated the legal description of the house lot
rather than the vacant lot, then, perhaps, things might have
unfolded differently.

But since Fadili provided the P&S to Long

Beach, she cannot now rely on her failure to properly describe
the house lot in the P&S to excuse her from any performance
under the note.

Regardless of what Fadili and Long Beach may

have thought she was mortgaging, the fact remains that she
borrowed $840,000 from Long Beach, and Deutsche Bank now holds
security for that loan in the form of a mortgage on the vacant
lot.

In short, Fadili is not entitled to summary judgment on

Count I on grounds that her performance under the note is
excused.
2. Promissory Estoppel (Count III)
In Count III, Deutsche Bank alleges that “[d]ue to the
inadvertence and neglect of the Defendant, Alia Fadili, Long
Beach was given a mortgage for the [vacant lot],” Compl. ¶ 53,
and on that basis, asks the court to estop Fadili from denying
that she gave Long Beach a mortgage on the vacant lot.

Fadili

makes two arguments for summary judgment on Count III: (1)
“Counts II and III of the Complaint must fail because Plaintiff
admits in virtually every Count of the Complaint that the
parties did not intend to grant or receive a mortgage on the
vacant lot,” Def.’s Mem. of Law (doc. no. 32-1), at 6; and (2)
39

“Plaintiff is not entitled to judgment based on Promissory
Estoppel as that action is based on the alleged negligence of
Defendant and Defendant could not have been negligent as a
matter of law because no duty was owed by her to review for
accuracy the documents prepared by Stewart Title,” id. at 13.
Deutsche Bank does not respond.
Both Count III and Fadili’s arguments for summary judgment
are somewhat perplexing.

Regardless, “in all instances,

application of promissory estoppel is appropriate only in the
absence of an express agreement” on the same subject, unless
that agreement is somehow unenforceable in contract.”

Rockwood

v. SKF USA Inc., 758 F. Supp. 2d 44, 57 (D.N.H. 2010) (quoting
Great Lakes Aircraft Co. v. City of Claremont, 135 N.H. 270, 290
(1992)).

Given that Fadili’s relationship with Long Beach was

governed by various express agreements, she is entitled to
judgment as a matter of law on Count III.
3. Negligence (Count V)
In Count V, Deutsche Bank claims that Fadili breached her
duty to Long Beach by: (1) failing to make sure that Amir gave
her a deed to the house lot; and (2) presenting Long Beach with
a purchase and sale agreement that included a registry of deeds
book and page reference to the vacant lot rather than the house
lot.

Fadili argues that she is entitled to summary judgment on

Count V because she owed Long Beach no duty to provide a correct
40

legal description of the property she was pledging as security
for her loan.

More specifically, Fadili argues that: (1)

“Plaintiff’s complaint cites no source of the duty alleged to be
owed by a borrower to the lending bank to review a mortgage
description prepared by the lending bank[’]s chosen agent,”
Def.’s Mem. of Law (doc. no. 32-1), at 8, and that “[t]he notion
that a borrower owes a duty to the lender to independently
verify the property description where the lender has hired an
independent expert to prepare the mortgage documents is an
argument that finds no purchase anywhere in the law.”

Id.

In

reliance on Manchenton v. Auto Leasing Corp., 135 N.H. 298
(1992), Deutsche Bank contends that by providing information to
Long Beach, she undertook a duty to provide correct information.
In a negligence action, “[w]hether a duty exists in a
particular case is a question of law.”

Coan v. N.H. Dep’t of

Envtl. Servs., 161 N.H. 1, 8 (2010) (citing Hungerford v. Jones,
143 N.H. 208, 211 (1998)).

The particulars of this case are

that Fadili presented a P&S to Long Beach and that Long Beach
commissioned a title search based on the information in the P&S
and, ultimately, made a loan to Fadili.

Thus, the duty on which

Deutsche Bank bases its negligence claim was not, as Fadili
would have it, a mortgagor’s duty to review the mortgage
description prepared by her lender’s title company.

Rather, the

duty at issue is a borrower’s duty to give her lender an
41

accurate description of the property she proposes to mortgage as
security for her loan.

Given the circumstances of this case,

the court is not prepared to say, as a matter of law, that
Fadili did not owe Long Beach a duty to accurately identify the
property she intended to purchase and put up as security for her
loan from Long Beach.

Cf. Snierson v. Scruton, 145 N.H. 73, 78

(2000) (“It is the duty of one who volunteers information to
another not having equal knowledge, with the intention that he
[or she] will act upon it, to exercise reasonable care to verify
the truth of his [or her] statements before making them.”)
(quoting Patch v. Arsenault, 139 N.H. 313, 319 (1995)).
Accordingly, Fadili is not entitled to summary judgment on Count
V.
4. Negligent Misrepresentation (Count IX)
In count IX, Deutsche Bank claims that Fadili is liable for
negligent misrepresentation because she “provided a purchase and
sale agreement to Long Beach and represented that she was to
become the owner of the [house lot] pursuant to the terms of the
purchase and sale agreement.”

Compl. ¶ 97.

Fadili argues that

she is entitled to summary judgment on Count IX because she
denies preparing the P&S (even though she admits to signing it),
and there is no evidence on a whole host of factual matters
related to the preparation of the P&S, its transmission to Long
Beach, and Long Beach’s use of it.
42

She further notes that

Deutsche Bank has identified no witness from Long Beach who can
testify on the element of reliance.

Without responding directly

to Fadili’s evidentiary concerns, Deutsche Bank simply points
out that Fadili’s mortgage broker presented the P&S to Stewart
Title, which relied on the faulty information contained therein
to prepare a plethora of documents for Long Beach.
To prevail on its claim for negligent misrepresentation,
Deutsche Bank must “prove that [Fadili] made a representation
with knowledge of its falsity or with conscious indifference to
its truth with the intention to cause [Long Beach] to rely upon
it and that [Long Beach] justifiably relied upon it.”

Akwa

Vista, LLC v. NRT, Inc., 160 N.H. 594, 601 (2010) (citing
Snierson, 145 N.H. at 77).

While the complaint is not as clear

as it might be regarding the statement(s) Deutsche Bank claims
to be misrepresentations – it could reasonably be read as
alleging that Alia made a false statement about the P&S or a
false statement in the P&S – the objection to Fadili’s summary
judgment motion makes it clear that the alleged misrepresentation is the statement in the P&S that the property with the
street address 132 Roger Road is more particularly described in
the deed recorded at Page 728 of Book 1719 in the Belknap County
Registry of Deeds.

While Fadili points out, correctly, that the

record contains no direct evidence of any specific individual at
Long Beach reading and relying on the P&S, the record is replete
43

with compelling undisputed circumstantial evidence of reliance;
Long Beach did, after all, secure an appraisal of 132 Roger Road
and, thereafter, loaned Alia $840,000.

Accordingly, Fadili is

not entitled to summary judgment on Count IX on the grounds
advanced in her motion.
5. Declaratory Judgment (Count II)
In Count II, Deutsche Bank asks the court to declare that
it is entitled to exercise its rights under the mortgage against
the vacant lot, in order to partially recover on its loan to
Fadili.

Fadili argues that she is entitled to summary judgment

on Deutsche Bank’s request for a declaratory judgment because:
(1) Deutsche Bank has admitted, throughout its complaint, that
the parties did not intend to encumber the vacant lot with a
mortgage; (2) Deutsche Bank has recourse under the policy of
title insurance issued by Stewart Guaranty; and (3) Deutsche
Bank is bound by the negligence of Long Beach’s agent, Stewart
Title, which failed to discover that it was using the legal
description of the vacant lot rather than the house lot.
Deutsche Bank responds only to Fadili’s second argument,
contending that her reliance on Wilshire Servicing Corp. v.
Timber Ridge Partnership, 743 N.E.2d 1173 (Ind. Ct. App. 2001),
is misplaced.

The court is not persuaded by any of Fadili’s

arguments for summary judgment on Count II.

44

Her first argument is that Deutsche Bank, having alleged
that Long Beach did not intend to accept a mortgage on the
vacant lot, cannot also seek to enforce a mortgage on the vacant
lot.

Long Beach may not have intended to take a mortgage on the

vacant lot, but it surely intended to take a mortgage on some
piece of property to secure the loan it made to Fadili.

And, it

is clear that Fadili intended to give a mortgage to secure the
loan.

So, even if it were undisputed that Fadili and Long Beach

did not intend for Fadili’s loan to be secured by a loan on the
vacant lot, that fact would provide no basis for judgment as a
matter of law in favor of Fadili on Count II.

Such a

determination would have the result of rendering her loan
entirely unsecured, which, indisputably, was not the intent of
either Long Beach or Fadili.
Fadili’s second argument (i.e., that Deutsche Bank has
recourse against Stewart Guaranty) is foreclosed by the court’s
grant of summary judgment to Stewart Guaranty.
Fadili’s third argument is that Deutsche Bank is bound by
Stewart Title’s alleged negligence in: (1) failing to discover,
in 2006, that it had erroneously used the legal description of
the vacant lot when performing services in connection with the
2002 transaction between Adel and Amir; and (2) perpetuating
that mistake while performing services in connection with the
transaction between Amir and Alia.
45

Even assuming that Stewart

Title was negligent, and that Deutsche Bank is bound by that
negligence, Fadili is not entitled to judgment as a matter of
law on Deutsche Bank’s request for the court to declare that it
is entitled to exercise its rights under the mortgage with
respect to the vacant lot.
Fadili seems to suggest that if Deutsche Bank is bound by
Stewart Title’s negligence, the mortgage on the vacant lot is a
nullity.
loan.

But that would leave Deutsche Bank with an unsecured

Because Fadili has failed to produce undisputed evidence,

or any evidence at all, from which it could be found that Long
Beach intended to make her an unsecured loan, her third argument
fails.11
For its part, Deutsche Bank recognizes that it is bound by
Stewart Title’s negligence.

In its view, however, being bound

simply means being left with an $840,000 loan that is secured by
a mortgage on a $500,000 property rather than a mortgage on a $1
million property.

That appears to be correct, but Deutsche Bank

has not moved for summary judgment on Count II.
Because the court is not persuaded by any of Fadili’s three
arguments, she is not entitled to summary judgment on Count II.
11

If Stewart Title’s alleged negligence had resulted in
Alia giving Long Beach a mortgage that was unenforceable because
it did not contain a sufficient legal description of any
property, then, perhaps, being bound by the title company’s
negligence would leave Deutsche Bank with no security for the
loan. But that is not the situation in this case.
46

But, because Deutsche Bank has not moved for summary judgment on
Count II, the court can do no more at this point than deny
Fadili’s motion for summary judgment on Deutsche Bank’s request
for a declaratory judgment.
6. Fadili’s Counterclaim for Breach of Contract
In the first count of her counterclaim, Alia asserts that
Long Beach was contractually obligated to prepare the closing
documents for the conveyance from Amir to her and that it
breached the loan contract “by preparing a mortgage deed with
the incorrect deed description, resulting ultimately in the loss
of the [house lot] at the bankruptcy auction in the Fall of
2008.”

Def.’s Answer & Countercls. (doc. no. 5) ¶ 114.

On that

basis, she seeks to recover from Deutsche Bank “all the interest
and principal payments she made under the promissory note and
mortgage, the equity she lost in the property, and the
attorney’s fees and costs she incurred in attempting to halt the
bankruptcy sale of the property.”

Id. ¶ 116.

At summary

judgment, she says she is entitled to the closing costs she
paid.

She further argues that where, as here, the purpose of a

contract has been rendered a nullity and an obligor’s
performance is excused, she is entitled to recoup the mortgage
payments she has already made.

Deutsche Bank simply says that

summary judgment is not appropriate because genuine issues of

47

material fact remain as to whether Fadili herself was the cause
of the damages she seeks in her breach of contract claim.
The court agrees with Deutsche Bank that Fadili is not
entitled to summary judgment on her breach of contract claim.
In so ruling, the court notes that Fadili has made no factual
allegations concerning the instructions Long Beach gave Stewart
Title prior to Stewart Title’s title search.

The only evidence

in the record pertaining to those instructions consists of the
P&S Fadili provided Long Beach, which already incorporated the
“mistake” she accuses Long Beach of making.
D. Deutsche Bank’s Motion
Without providing the “short and concise statement of
material facts, supported by appropriate record citations”
required by Local Rule 7.2(b)(1), Deutsche Bank moves for
summary judgment.

Oddly, neither the caption of the motion, nor

the body of it, nor the prayers for relief indicate what,
precisely, Deutsche Bank is seeking summary judgment on, i.e.,
its own claims or Fadili’s counterclaims.

As best the court can

tell, the whole purpose of Deutsche Bank’s motion is to contest
the following allegation in Fadili’s counterclaim: “Plaintiff
hired Stewart Title as its agent for the preparation of the
closing documents.”

Def.’s Answer & Countercls. ¶ 109.

Whatever else it may be, document no. 33 is not a properly

48

supported motion for summary judgment.

As a result, it is

denied.

Conclusion
For the reasons given: (1) Stewart Title’s motion for
summary judgment, document no. 29, is granted; (2) Stewart
Guaranty’s motion for summary judgment, document no. 31, is
granted; (3) Fadili’s motion for summary judgment, document no.
32, is granted as to Count III, but is otherwise denied; and (4)
Deutsch Bank’s motion for summary judgment, document no. 33, is
denied.

The following claims remain for trial: Counts I, II,

and IV-X of Deutsche Bank’s complaint, and all three of Fadili’s
counterclaims.

The court notes, however, that Count II of

Deutsche Bank’s complaint, its request for a declaratory
judgment, is for resolution by the court rather than the jury.
SO ORDERED.

__________________________
Landya McCafferty
United States Magistrate Judge
October 4, 2011
cc:

Edmond J. Ford, Esq.
Steven M. Latici, Esq.
William Philpot, Jr., Esq.
Christopher J. Somma, Esq.

49