Developer Finance Corporation, et al v. Chicago Title Insurance Company
Filing
52
ORDER denying 44 Motion to Reopen Case. So Ordered by Magistrate Judge Landya B. McCafferty.(gla)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
Developer Finance Corporation
and Prescott Orchards Land
Development, LLC
v.
Civil No. 10-cv-462-LM
Chicago Title Insurance Company
O R D E R
In an order dated March 6, 2012, the court granted summary
judgment to Prescott Orchards Land Development, LLC (“Prescott”)
on its request for a declaratory judgment that it was entitled
to coverage under a policy of owner’s title insurance that was
issued to it by Chicago Title Insurance Company (“Chicago
Title”).
Having granted Prescott the declaratory judgment it
sought, the court closed the case.
Now before the court is a
pleading filed by Prescott and Developer Finance Corporation
(“DFC”) captioned “Motion to Reopen for the Determination of
Damages,” which identifies, as its legal basis, Rule 60(b) of
the Federal Rules of Civil Procedure.
Chicago Title objects.
For the reasons that follow, the motion to reopen is denied.
The procedural rule on which DFC and Prescott base their
motion provides, in pertinent part, that “the court may relieve
a party . . . from a final judgment, order, or proceeding for
. . . any . . . reason that justifies relief.”
60(b)(6).
Fed. R. Civ. P.
Obviously, DFC and Prescott do not seek relief from
the court’s grant of summary judgment in Prescott’s favor.
Rather, as they clarify in their reply, they seek relief from
the court’s directive to the clerk of the court to close their
case.
In their view, there are issues that remain to be
resolved in this case, specifically, the amount of damages to
which they are entitled.
DFC and Prescott are mistaken.
This case was a declaratory judgment action.
It was
initiated by a two-count “complaint,” which is more aptly
characterized as a petition.1
See N.H. Rev. Stat. Ann. (“RSA”) §
491:22 (“Any person claiming a present legal or equitable right
or title may maintain a petition against any person claiming
adversely to such right or title to determine the question as
between the parties . . .”).
That pleading is captioned
“Complaint for Declaratory Relief.”
Doc. no. 1, at 1.
Count I
is captioned “Declaratory Relief Under Lenders’ Policies of
Title [Insurance].”
Id. at 6.
Count II is captioned
“Declaratory Relief Under Owner’s Policy of Title [Insurance].”
Id. at 8.
While they are somewhat unclear, the principal
prayers for relief in petitioners’ “complaint” seek a
1
Accordingly, DFC and Prescott will be referred to in this
order collectively as “petitioners.”
2
declaration of their legal rights vis à vis Chicago Title.
id. at 12.
See
Beyond that, five of the six New Hampshire Supreme
Court opinions cited in petitioners’ memorandum of law in
support of their motion for summary judgment were in
declaratory-judgment cases,2 and much of the legal exposition in
their memorandum focused on an insurer’s duty to defend its
insured.3
Petitioners neither argued nor identified any legal
theory under which they would be entitled to damages from
Chicago Title.
In other words, there was nothing in either the
“complaint” or petitioners’ summary-judgment motion to suggest
that they were asserting a claim for damages.
Based upon all of the foregoing, the court treated the
“complaint” as a petition for a declaratory judgment and
determined that the case had come to a close once it granted
Prescott the relief it had asked for.
Moreover, during the
fourteen-day period for filing a motion for reconsideration to
2
See State Farm Ins. Co. v. Bruns, 156 N.H. 708, 709
(2008); Philbrick v. Liberty Mut. Fire Ins. Co., 156 N.H. 389,
389 (2007); Carter v. Concord Gen. Mut. Ins. Co., 155 N.H. 515,
516 (2007); Broom v. Cont’l Cas. Co., 152 N.H. 749, 751 (2005);
Moore v. N.H. Ins. Co., 122 N.H. 328, 331 (1982).
3
As best the court can tell, Chicago Title’s duty to defend
was never an issue in this case, given the lack of any cause of
action asserted against petitioners for which they needed a
defense. See State Farm, 156 N.H. at 710 (describing
circumstances in which an insurer may have a duty to defend its
insured).
3
correct a manifest error of fact of law, see LR 7.2(e),
petitioners filed nothing with the court other than their
objection to Chicago Title’s motion for relief from judgment.
That is, they advanced no argument that the court had erred by
closing a case in which issues remained to be resolved.
In
their reply brief, petitioners acknowledge, in a bit of an
understatement, that “[t]he procedure to reopen by a victorious
party may be rare.”
Doc. no. 50, at 5.
Then they argue that
the “unique circumstances” of this case justify such an
unconventional use of Rule 60(b)(6).
Id.
But, they offer no
legal support for the proposition that Rule 60(b)(6) may be
used, after the entry of judgment in a declaratory-judgment
action, to transform such an action into a claim for damages.
In sum, the court cannot reopen this case because there is
nothing to reopen.
Prescott sought a declaratory judgment, and
the court granted it.
To be sure, the “complaint” mentioned
various alleged damages, but making passing reference to damages
and actually suing to recover them are two different things.
Because this case included no claim for damages, reopening it is
not an appropriate procedure for pursuing the relief petitioners
now seek.
Thus, their motion must be denied.
Petitioners’ continuing misunderstanding of the nature of
declaratory judgment is expressed in several ways in their
4
current pleadings.4
For example, while Chicago Title’s response
to Prescott’s claim on its policy may be “a violation of the
contract for title insurance,” Pet’r’s Mem. of Law (doc. no. 441), at 5, a question on which the court offers no opinion,
nothing that Chicago Title said or did could have possibly been
“a violation of the express Order of this Court,” id.
That is
because the court never ordered Chicago Title to pay anything to
DFC or Prescott; it merely determined that to the extent that
petitioners have been harmed by the presence of New Lane on
their property, they are entitled to coverage under the policy
they were issued by Chicago Title.
Thus, petitioners’
suggestion that if the court denies the motion before it, they
will “file a new action to collect on the judgment handed down
by the Court on March 6, 2012,” Pet’r’s Reply (doc. no. 50), at
5, is ill considered.
In document no. 38, the court handed down
a declaratory judgment, not a money judgment against Chicago
4
That misunderstanding was probably foreshadowed by the
caption of document no. 32: “Plaintiff’s Motion for Summary
Judgment as to Liability Under Count II.” In retrospect, it may
have been helpful for the court to have pointed out, in its
order on summary judgment, that a request for a declaratory
judgment, unlike, for example, a claim for breach of contract,
does not involve determinations of liability and damages.
Rather, in a declaratory judgment action, the court is called
upon only to determine, as a matter of law, the legal rights of
the petitioner(s) and the respondent(s). See RSA 491:22.
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Title, which means that there is no judgment on which
petitioners could collect.
Of course, the current lack of a judgment on which
petitioners can collect does not mean that they lack an avenue
for recovery.
In fact, the New Hampshire case on which
petitioners rely for their theory of bad faith points the way.
In Jarvis v. Prudential Insurance Company of America, the New
Hampshire Supreme Court described the damages that a policy
holder may recover from its insurer for a bad-faith denial of
coverage, see 122 N.H. 648, 653-54 (1982).
Before doing so,
however, it described the claims in the case before it:
We next address the plaintiffs’ count in
contract. Count II of the amended writ alleges that
the failure of the defendant to pay certain disputed
insurance benefits constituted a bad-faith breach of
contract, which entitled them to consequential and
punitive damages, including damages for emotional
distress.
The underlying factor in determining whether
there has been a bad-faith breach of contract is
whether the terms of the insurance policy cover the
services of an L.P.A. A petition for declaratory
judgment is pending in the superior court to determine
this question. If it is determined in the declaratory
judgment action that the plaintiffs’ policy did cover
the services of an L.P.A., the plaintiffs will then,
and only then, be able to assert their claim that the
defendant’s denial of benefits was in bad faith.
Id. at 653.
As Jarvis makes clear, the proper vehicle for a
policyholder to use when seeking to recover from an insurer that
6
has wrongfully failed to pay a claim is an action against the
insurer for breach of contract.
But, because petitioners have
asserted no such cause of action against Chicago Title, the
relief they seek in the motion before the court is unavailable.
To conclude, DFC and/or Prescott might be entitled to
damages from Chicago Title.5
no opinion on that matter.
Again, to be clear, the court has
But, at this point, the court has
not awarded any damages against Chicago Title, because it has
never been properly asked to do so.
Petitioners sought only a
declaratory judgment in this action, which the court granted.
Because there remain no unresolved issues in this case,
petitioners’ motion to reopen it, document no. 44, is
necessarily denied.
Having determined that petitioners’
declaratory-judgment action does not provide a legal context for
determining whether Chicago Title has breached its contract with
them or, if so, the amount of damages to which they are
entitled, the court finds considerable merit in Chicago Title’s
5
In connection with that issue, the court notes that at the
heart of petitioners’ claim against its title-insurance policy
is a cease-and-desist order that was in effect for approximately
sixty days and then vacated. It is not at all clear that there
has ever been a legal determination concerning petitioners’
title to the lots that New Lane allegedly crosses. Such a
determination would, of course, play a key role in determining
whether, and to what extent, petitioners may have been damaged
by any failure to identify the existence of New Lane before they
purchased their property. That issue, however, is not before
this court.
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suggestion that the dispute over the value of petitioners’ claim
is readily amenable to resolution through mediation.
But, it is
for the parties themselves to determine how best to resolve
their differences.
SO ORDERED.
__________________________
Landya McCafferty
United States Magistrate Judge
November 6, 2012
cc:
Conrad WP Cascadden, Esq.
Paul R. Kfoury, Sr., Esq.
Lisa Snow Wade, Esq.
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