US v. Lawyers Title Ins. Corp. dba Landamerica (2013)

MEMORANDUM OF DECISION ON CROSS MOTIONS FOR SUMMARY JUDGMENT

The court is presented with dueling motions for summary judgment.¹  The parties are at sword's point on several issues of law.   As one might expect, however, when both parties claim that there are no genuine issues as to the material facts, the facts are undisputed, save for one, which is not only material but critical.   Together the motions pose the question, “Can a title insurer be liable for defects in title even though a title insurance policy was never issued?”   The court's answer is, “Yes.”

I

On August 9, 2007 Stephen Merrick obtained a refinancing loan from BNC Mortgage, Inc. (BNC) in the amount of $337,500.00 in order to pay off existing financial obligations secured by a mortgage on 28–30 Village Road in Milford, Connecticut.   Mr. Merrick's note evidencing his debt to BNC was secured by a mortgage on the same property.   The plan was that the liens on the property securing Mr. Merrick's prior obligations would be released as those debts were paid off with the proceeds of BNC's loan, leaving BNC as the first lienholder should Mr. Merrick default on the note payable to BNC.

The loan closed on August 14, 2007.   Mr. Merrick's note was endorsed in blank by BNC, and there is no dispute that the plaintiff, U.S. Bank National Association (U.S. Bank), is entitled to the proceeds of the loan as the holder of that note.   See General Statutes § 42a–3–203 & 42a–3–204.   In addition, on or about September 15, 2008 Mortgage Electronic Registration Systems, Inc. (MERS), as BNC's designee, assigned the mortgage to U.S. Bank.

When Mr. Merrick defaulted on the note on or about October 20, 2008, and U.S. Bank attempted to foreclose on the property, it learned to its chagrin that Mr. Merrick's other financial obligations had not been paid off with the loan proceeds and the prior liens on the property securing those obligations had not been released.   Thus, U.S. Bank was not first in line to satisfy Mr. Merrick's unpaid debt by foreclosing on the property securing BNC's loan.

The culprit responsible for these consequences was Joseph A. Kriz, who acted as the title agent on BNC's loan to Mr. Merrick and conducted the closing on the loan.   Instead of paying off Mr. Merrick's debts with the proceeds of the BNC loan and effecting the release of the prior liens, Attorney Kriz absconded with the loan proceeds.   At the time of the closing Mr. Kriz was an authorized title agent for the defendant Lawyers Title Insurance Company (Lawyers Title), as well as other title insurance companies.   In that capacity he had provided BNC with a commitment for title insurance (title commitment) in the name of Lawyers Title.   This title commitment lacked a one-page attachment (“jacket”) which U.S. Bank refers to as “boilerplate” and Lawyers Title (and the title commitment itself) refers to as the “insuring provisions.”   At the closing Mr. Kriz failed to issue a title insurance policy (title policy) in the name of Lawyers Title or any other title insurer.

On October 20, 2008, after U.S. Bank learned of the unreleased prior liens, it notified Lawyers Title and made a claim for payment of the loss it had suffered as a result of defects in title occasioned by Mr. Kriz's failure to carry out his duties at the closing.²  Since no title policy had been issued in the name of Lawyers Title, it denied U.S. Bank's claim, arguing that, in the absence of such a policy, the title commitment, alone, was invalid because it lacked the “jacket.”

In addition to providing BNC with the title commitment Mr. Kriz issued a letter of protection (protection letter), also in the name of Lawyers Title, promising to reimburse BNC for any loss incurred in connection with the transaction as a result of Mr. Kriz's failure to comply with the closing instructions given him by BNC and for the title agent's fraud or dishonesty in the handling of BNC's funds.   Because Mr. Kriz failed to follow BNC's closing instructions regarding the priority to be accorded BNC's mortgage and because he defrauded BNC of the loan proceeds, U.S. Bank, as BNC's successor in title to the note and mortgage, made demand for reimbursement of its losses by Lawyers Title under the protection letter.   That demand was rejected as well:  the protection letter was issued to BNC not U.S. Bank, maintained Lawyers Title, and it was not assignable as a matter of law.   Nor had it been assigned as a matter of fact.

This lawsuit followed.   The parties have made essentially the same arguments as they advanced in the claims process, although they have been refined and expanded on in the memoranda supporting and opposing their respective motions for summary judgment.

II

The operative complaint (complaint) is U.S. Bank's second amended complaint dated July 18, 2011.  (File # 165.)   Count one seeks damages for breach of contract based on issuance of the title commitment by Mr. Kriz in the name of Lawyers Title.   Count three is for breach of the covenant of good faith and fair dealing by Lawyers Title in denying U.S. Bank's claim under the title commitment.   Both parties seek summary judgment on both counts.

The issues raised as to counts one and three are (1) whether U.S. Bank has “standing” to assert a claim under the title commitment in the absence of a document purporting to assign any claims BNC may have had to U.S. Bank;  and (2) whether, in the absence of a title policy, the title commitment can impose contractual obligations on Lawyers Title when it is not accompanied by the “jacket.”

Each party also seeks summary judgment on count two of the complaint, which seeks damages for breach of contract, this time based on Mr. Kriz's issuance of the protection letter to BNC, and on count four, which asserts that Lawyers Title violated the covenant of good faith and fair dealing when it denied U.S. Bank's claim under the closing protection letter.   The issues raised as to counts two and four are:  (1) whether, in the absence of language in the protection letter extending its protection to BNC's “successors and assigns” or any document purporting to assign BNC's rights to U.S. Bank, U.S. Bank has standing to enforce whatever contract rights BNC may have had;  (2) whether the protection letter is valid when a title policy was never issued by Lawyers Title;  and (3) whether Mr. Kriz's status as Lawyers Title's authorized title agent imposes contractual obligations on it arising out of his failure to issue a title policy in its name.

Count five of the complaint asserts a claim that Lawyers Title violated the Connecticut Unfair Trade Practices Act (CUTPA), based on its alleged failure to inform subsequent holders of notes and mortgages that the coverage afforded by its letters of protection did not run to such holders;  it is also a target of Lawyers Title's motion for summary judgment.   See Part V, infra.³

Since Lawyers Title argues that U.S. Bank lacks standing to enforce either the title commitment or the protection letter, and standing is a jurisdictional prerequisite to U.S. Bank's maintenance of this lawsuit, the court will address that issue first.

III

“The issue of standing implicates subject matter jurisdiction.”  St. George v. Gordon, 264 Conn. 538, 544 (2003).  “It is a basic principle of law that a plaintiff must have standing for the court to have jurisdiction.   Standing is the legal right to set judicial machinery in motion.   One cannot rightfully invoke the jurisdiction of the court unless he has, in an individual or representative capacity, some real interest in the cause of action or a legal or equitable right, title or interest in the subject matter of the controversy.”  Ganim v. Smith & Wesson Corp., 258 Conn. 313, 347 (2001).   “It is the burden of the party who seeks the exercise of jurisdiction in his favor ․ clearly to allege facts demonstrating that he is a proper party to invoke judicial resolution of the dispute.”  St. George v. Gordon, supra, 544–45.

US Bank was not a party to the loan transaction between Mr. Merrick and BNC. Thus, any rights of U.S. Bank must be as the subsequent holder of the note and assignee of the mortgage given by Mr. Merrick to BNC. Lawyers Title claims that there are no such rights because the title commitment, though it runs to BNC's “successors and assigns,” was never, in fact, assigned to U.S. Bank. As for the protection letter, unlike the title commitment, it contains no language extending its protection to anyone other than BNC, the original lender and mortgagee;  even if it was assignable, there is no evidence that it was ever assigned to U.S. Bank.

A

Lawyers Title concedes that the title commitment confers rights of enforcement on BNC's “successors and assigns.”   US Bank concedes that there was never any assignment to it of BNC's rights.   There need not be an assignment, however, for U.S. Bank to enforce whatever rights BNC may have had under the title commitment because it is indisputably BNC's “successor” in its right to collect on the Merrick note and to foreclose on the securing mortgage;  by its terms the title commitment runs not only to BNC's “assigns” but also to its “successors.”

A “successor” is defined simply as one “who succeeds to the office, rights, responsibilities, or place of another;  one who replaces or follows another.”   Black's Law Dictionary (7th Ed.1999).   Cf. In the Matter of Bachand, 306 Conn. 37, 53 (2012);  Tourangeau et al. v. Uniroyal, Inc. et al., 138 F.Sup.2d 259, 265–66 (D.Conn.2001).   Since U.S. Bank is the legal holder of the Merrick note and the assignee of the mortgage securing it, it has succeeded to all of BNC's rights, including its right to enforce the title commitment, assuming it is enforceable.   See Part IV, infra.

The court finds that there are no facts in dispute material to the question whether U.S. Bank has standing to enforce BNC's rights under the title commitment, and that, as a matter of law, U.S. Bank has such standing.

B

Unlike the title commitment, there is no language in the protection letter extending its coverage to BNC's “successors” or “assigns.”   Even though protection letters are considered contracts of indemnification between lenders and title insurance underwriters;  see, e.g., J.P. Morgan Chase Bank N.A. & FDIC v. First American Title Ins. Co., 795 F.Sup.2d 624, 629 (E.D.Mich.2011);  and contracts are freely assignable in Connecticut;  see Rumbin v. Utica Mutual Ins. Co., 254 Conn. 259, 267 (2000);  there is no document purporting to assign to U.S. Bank any contract rights which BNC might have had against Lawyers Title under the protection letter.   How, then, can U.S. Bank have standing to enforce the protection letter, which was addressed only to BNC?

Lawyers Title argues that it cannot, citing two treatises on the law of title insurance for the proposition that only the addressee (BNC in this case) is benefitted by and can make a claim under a protection letter.   For example, using a form closing protection letter promulgated by the American Land Title Association in 2008,⁴ “insured lenders can demand express coverage for ‘its successors and assigns, as their interests may appear,’ thus extending the letter's protection to the secondary mortgage market purchasers.   But this extended coverage must be express ․ “ (Emphasis added.)   B. Burke, Law of Title Insurance (3d Ed.2010 suppl.) § 13.10, p. 13–102.   See also J.B. Nielsen, Title & Escrow Claims Guide (2d Ed.2012) § 14.1, p. 14–2.   Cf. National Mtge. Warehouse, LLC v. Bankers First Mtge. Co., Inc., et al., 190 F.Sup.2d 774, 782 n.2 (D.Md.2002).

None of the cases relied on by U.S. Bank to refute this argument overcome the twin obstacles to its reliance on the protection letter for a cause of action against Lawyers Title;  viz., the absence of language extending the letter's protection to a “successor” or “assign” and the lack of a document assigning any contract rights that BNC might have had to U.S. Bank. While it cites a treatise on title insurance for “two rationales [that] support coverage [under a protection letter] for assignees or conduit lenders”;  J.D. Palomar, Title Insurance Law (2012–13 Ed.) § 20.18, p. 371;  the treatise, itself, acknowledges that “courts have assumed, without deciding, that an assignee, purchaser or funder of the mortgage can sue under the closing protection letter ․ These courts have not actually decided the issue, however.   Instead, each has resolved the assignee's claim on other grounds.”  Id. Since the right to sue is an essential element of standing, this court does not have the option of avoiding the issue.

The parties to the closing of a refinance loan such as the one here include the lender, BNC, the borrower, Mr. Merrick, and the title insurance underwriter, represented by its title or issuing agent, in this case Mr. Kriz. “(T)he closing protection letter contains the underwriter's promise to reimburse the addressee if loss results from an agent's failure to follow closing instructions or to apply settlement funds in an honest fashion.”   (Citations omitted.)  J.P. Morgan Chase Bank N.A. & FDIC v. First American Title Ins. Co., supra, 795 F.Sup.2d 629.  “The primary protection of the Letter remains as to the risk that the title agent or approved attorney will steal the money delivered at closing.”  (Citation omitted.)  Id., 630.   The money delivered to Mr. Kriz at the closing and stolen by him was BNC's, not U.S. Bank's.   Therefore, it stands to reason that it is only BNC that was protected by the letter, not U.S. Bank, that is, in the absence of language in the protection letter extending the letter's coverage down the chain of subsequent holders or an assignment of BNC's contract rights to U.S. Bank.

The court finds that there are no facts in dispute material to the question whether U.S. Bank has standing to enforce BNC's rights under the protection letter, and that, as a matter of law, U.S. Bank has no such standing.

IV

Having found that U.S. Bank has standing to assert BNC's rights under the title commitment;  see Part III A, supra;  the court will now address the parties' competing claims for summary judgment on counts one and three.

In count one U.S. Bank seeks damages for Lawyers Title's breach of an alleged contract to provide BNC with title insurance.   It alleges that “(c)onduct of the closing by [Lawyers Title's] verified agent, Attorney Joseph A. Kriz, following the issuance of the [title commitment] and disbursement of [BNC's] funds, bound [Lawyers Title] to provide coverage insuring that [BNC] would be in the first mortgage position.”   Complaint, ¶ 17.   Lawyers Title has denied this allegation, as well as an allegation that Mr. Kriz “was acting within the actual or colorable scope of his authority as the verified agent for [Lawyers Title] when he issued the [title commitment], conducted the closing, and disbursed [BNC's] proceeds.”   See complaint, ¶ 16;  Answer and Special Defense to 2d Amended Complaint (File # 170, Aug. 19, 2011) (answer).   Moreover, Lawyers Title asserts a special defense;  viz., that “the [title commitment] is invalid because it does not include Insuring Provisions, as required by the explicit language of the [title commitment].”  Id., Second Special Defense.

Count three alleges that Lawyers Title breached the covenant of good faith and fair dealing in failing to honor U.S. Bank's claim under the title commitment.

The law governing the consideration of motions for summary judgment is well-known.   Summary judgment “shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.”  Practice Book § 17–49.  “In seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact.   The courts are in entire agreement that the moving party for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law, entitle him to a judgment as a matter of law.   The courts hold the movant to a strict standard.   To satisfy his burden the movant must make a showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact ․ As the burden of proof is on the movant, the evidence must be viewed in the light most favorable to the opponent ․ When documents submitted in support of a motion for summary judgment fail to establish that there is no genuine issue of material fact, the nonmoving party has no obligation to submit documents establishing the existence of such an issue ․ Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some disputed factual issue ․ It is not enough, however, for the opposing party merely to assert the existence of such a disputed issue.   Mere assertions of fact ․ are insufficient to establish the existence of a material fact and, therefore, cannot refute evidence properly presented to the court under Practice Book § [17–45].”  (Internal quotation marks omitted.)   Zielinski v. Kotsoris, 279 Conn. 312, 318–19, 901 A.2d 1207 (2006).

“[S]ummary judgment is appropriate only if a fair and reasonable person could conclude only one way ․ [A] summary disposition ․ should be on evidence which a jury would not be at liberty to disbelieve and which would require a directed verdict for the moving party ․ [A] directed verdict may be rendered only where, on the evidence viewed in the light most favorable to the nonmovant, the trier of fact could not reasonably reach any other conclusion than that embodied in the verdict as directed.”  (Citations omitted;  emphasis in original;  internal quotation marks omitted.)  Dugan v. Mobile Medical Testing Services, Inc., 265 Conn. 791, 815, 830 A.2d 752 (2003).  “In ruling on a motion for summary judgment, the court's function is not to decide issues of material fact, but rather to determine whether any such issues exist.”   Nolan v. Borkowski, 206 Conn. 495, 500, 538 A.2d 1031 (1988).

In moving for summary judgment on these counts each party claims that there is no genuine dispute as to any material fact, but there is a material fact, indeed a critical fact which seems to the court much in dispute;  namely, Mr. Kriz's authority to bind Lawyers Title by his actions at the closing of this transaction.

“The existence of an agency relationship is a question of fact ․ It is well-settled that the nature and extent of an agent's authority is a question of fact for the trier where the evidence is conflicting or where there are several reasonable inferences which can be drawn ․” (Citations and internal quotation marks omitted.)  Wesley v. Schaller Subaru, 277 Conn. 526, 543, 544 (2006).

Mr. Kriz was clearly an agent of Lawyers Title for the purpose of “issuing ․ title insurance commitments, policies and endorsements on real estate located in the state of Connecticut.”   Lawyers Title Insurance Corporation Agency Agreement, p. 2. See exhibit F, Memorandum of Law in Response to Order for Additional Briefing and Argument (File # 201, Mar. 28, 2013).   So, there is no dispute that he had actual authority as Lawyers Title's agent to issue title insurance commitments, as he did here.⁵

According to its complaint, however, U.S. Bank also relies on Mr. Kriz's conduct at the closing of this refinance loan to bind Lawyers Title to provide title coverage.   It is far from clear on the record here what authority Mr. Kriz had, if any, to conduct the closing.⁶  Lawyers Title argues that he had none, citing to the agency agreement.   But the language of the agreement is not clear on that point.   It does not forbid Mr. Kriz from conducting closings;  it states simply that he may not “receive in the name of [Lawyers Title] any funds, including escrow and settlement funds.”   There is no evidence in the record as to the custom and practice in the closing of refinance loans from which the court could conclude that Mr. Kriz's lack of authority to “receive” funds “in the name of Lawyers Title” would necessarily preclude him from conducting closings.   Conversely, there is no evidence in the record from which the court could conclude whether title insurance policies are customarily issued at the time of the closing so that Mr. Kriz's actual authority to issue such policies would allow a trier of fact to conclude that he had implied or apparent authority to conduct closings.

Questions of whether an agent, like Mr. Kriz, had implied or apparent authority to bind his principal, Lawyers Title, in a particular transaction are quintessentially questions of fact to be determined via reasonable and logical inferences drawn from the circumstances of the relationship between principal and agent and the acts or statements of the principal.   See Tomlinson v. Board of Education, 226 Conn. 704, 734–35 (1993);  Yale University v. Out of the Box, 118 Conn.App. 800, 808 (2010).

Lawyers Title cites to the case of National Mtge. Warehouse, LLC v. Bankers First Mtge. Co., Inc., supra, 190 F.Sup.2d 780, for the proposition that title agents generally do not have actual authority to conduct closings on behalf of a title insurer.   In that case, however, the title agent, by the terms of the agency agreement, “was expressly precluded from conducting any settlement or closing business on behalf of” the title company.   Moreover, on the issue of whether title agents typically act as closing agents, another federal district court has observed that, “Title insurance underwriters generally issue title insurance policies through local ‘issuing agents.’  ․ The ‘issuing agents' typically close the underlying real estate sale and also act as the parties' ‘closing agents.’  “ J.P. Morgan Chase Bank, N.A. & FDIC v. First American Title Ins. Co., supra, 795 F.Sup.2d 628.   Thus, caselaw does not define the authority of title agents like Mr. Kriz to conduct closings.

Lawyers Title also cites three cases which it believes refute U.S. Bank's claim of its liability on counts one and three.   See Cameron County Savings Ass'n. v. Stewart Title Guaranty Co., 819 S.W.2d 600 (Ct.App.Tex.1991);  Security Union Title Ins. Co. v. Citibank, 715 So.2d 973 (Ct.App.Fla.1998);  Pal Properties, LLC v. Ticor Title Ins. Co., 2008 WL 5158894 (Ct.App.Mich.2008).   In each of these cases the claimant sought damages from the title insurance company based on the fraudulent conduct of its title agent at the closing of the transaction;  in two of them (Cameron County and Pal Properties) the court granted summary judgment for the title insurer.   In each of those cases, however, the court pointed to the fact that the agent's actual authority was expressly limited by the agency agreement to the issuance of title commitments and title policies and did not extend to the conduct of closings.   Nor did the evidence show any actions on the part of the principal, the insurer, that could lead the claimant to believe that the agent had the apparent authority to conduct closings.   The records on which those courts acted in granting summary judgment were far more complete and unambiguous on those subjects than the record provided by Lawyers Title in this case.

For example, it is undisputed here that the HUD–1 statement listed First American Title Insurance Company (First American) as the title insurer for this loan, and that the HUD–1 had to be approved by BNC before any funds were disbursed at the closing.   On the other hand, Mr. Kriz issued a check for the insurer's share of the premium paid for title insurance to Lawyer's Title not First American.   On the third hand, Lawyer's Title never negotiated that check for payment.   The inferences to be drawn from these facts as to whether Mr. Kriz was acting in such a way as to bind Lawyers Title to issue a title policy are for the trier of fact not this court.  “In ruling on a motion for summary judgment, the court's function is not to decide issues of material fact, but rather to determine whether any such issues exist.”  Nolan v. Borkowski, 206 Conn. 495, 500, 538 A.2d 1031 (1988).

The record here is not sufficient for this court to say that a reasonable trier of fact could reach only one conclusion on the issue of whether Mr. Kriz had authority to act and did act for Lawyers Title at the closing.   If he had authority to act and did act for Lawyers Title, the trier could conclude that U.S. Bank has a valid claim against Lawyers Title even in the absence of a title policy.   Accordingly, the court finds that there are material facts in dispute between the parties as to Lawyers Title's liability on count one and count three which preclude the grant of summary judgment for either party.

V

Lawyers Title's argument for summary judgment on count five of the complaint, alleging a CUTPA violation, is simplicity itself:  US Bank's CUTPA claim is brought as an assignee of BNC, not in its own right, and CUTPA claims are not assignable.   For the latter proposition Lawyers Title cites one Superior Court decision, Kaufman v. Burger & Burger, Inc., Superior Court, judicial district of Stamford–Norwalk at Stamford, Docket No. CV 87 0088826, 3 CSCR 317 (Feb. 23, 1988), and predicts appellate court adoption of that position at some time in the future, based on dicta in the Supreme Court's decision in Stearns & Wheeler v. Kowalsky Bros., 289 Conn. 1, 9 n. 12 (2008).

The court need not reach that issue, however, because it is clear from the wording of the complaint that U.S. Bank is suing in its own right as a subsequent holder of the note and mortgage.   Paragraph 35 of count five alleges that Lawyers Title issues letters of protection “to promote and increase its base of title insurance business.” ⁷  Issuing such letters to increase business, without notice that they do not extend coverage to assigns or successors of the original addressees, is the unfair trade practice alleged.   In this case only U.S. Bank, not BNC, is the party injured by this alleged unfair practice because, as Lawyers Title has been at pains to point out, its only status vis-a-vis the letter of protection could be as an assignee of BNC. This court's denial of a right to recover by U.S. Bank under the letter of protection;  see Part III, supra;  illustrates the damage potentially suffered by an assignee or other subsequent holder of the type of letter of protection issued by Lawyers Title in connection with this transaction.   Therefore, the claim is U.S. Bank's and not that of its predecessor in interest.⁸

VI

US Bank's motion for summary judgment is DENIED.   Lawyers Title's motion for summary judgment is GRANTED as to counts two and four of the complaint, and judgment enters accordingly.   As to all other claims, its motion for summary judgment is DENIED.

BY THE COURT

Joseph M. Shortall

Judge Trial Referee

FOOTNOTES

FN1. See in the file # 's 167 & 168, the plaintiff's motion and supporting memorandum of law, and # 196, the defendant's objection thereto.   File # 's 182 & 183 are the defendant's motion and supporting memorandum of law, and # 197 is the plaintiff's objection thereto.   File # 's 201 & 202 are supplemental memoranda of law filed by the parties pursuant to a court order, # 198..  FN1. See in the file # 's 167 & 168, the plaintiff's motion and supporting memorandum of law, and # 196, the defendant's objection thereto.   File # 's 182 & 183 are the defendant's motion and supporting memorandum of law, and # 197 is the plaintiff's objection thereto.   File # 's 201 & 202 are supplemental memoranda of law filed by the parties pursuant to a court order, # 198.

FN2. The claim was made in the name of Chase Home Finance, LLC, the servicer of the loan for U.S. Bank..  FN2. The claim was made in the name of Chase Home Finance, LLC, the servicer of the loan for U.S. Bank.

FN3. In addition to summary judgment on counts one through five of the complaint Lawyers Title's motion seeks summary judgment on several of its special defenses.  Practice Book § 17–44 does not provide for summary judgment on special defenses.   See. e.g., Moffa v. GEICO General Ins. Co., Superior Court, judicial district of Waterbury, Docket No. CV 96 132030, 1998 Ct.Super. 12388 (Oct. 23, 1998)..  FN3. In addition to summary judgment on counts one through five of the complaint Lawyers Title's motion seeks summary judgment on several of its special defenses.  Practice Book § 17–44 does not provide for summary judgment on special defenses.   See. e.g., Moffa v. GEICO General Ins. Co., Superior Court, judicial district of Waterbury, Docket No. CV 96 132030, 1998 Ct.Super. 12388 (Oct. 23, 1998).

FN4. This is not the form letter used in this transaction, which closed in 2007..  FN4. This is not the form letter used in this transaction, which closed in 2007.

FN5. In Mortgage Network, Inc. v. Ameribank Mtge. Lending, LLC, 177 Ohio Appeals 3d 733 (Ohio Ct.App.2008), the court rejected a title insurer's argument that a title commitment was invalid because of a missing “jacket” where the insurer's title agent had failed to attach it.   The court held that the title company “cannot disaffirm liability on the policy because its apparent agent caused a condition precedent to fail.”  Id., 742.   The same reasoning suggests that Mr. Kriz's failure to attach the insuring provisions, the “jacket,” is chargeable to Lawyers Title and should not, alone, defeat U.S. Bank's reliance on the title commitment as a basis for liability on counts one and three..  FN5. In Mortgage Network, Inc. v. Ameribank Mtge. Lending, LLC, 177 Ohio Appeals 3d 733 (Ohio Ct.App.2008), the court rejected a title insurer's argument that a title commitment was invalid because of a missing “jacket” where the insurer's title agent had failed to attach it.   The court held that the title company “cannot disaffirm liability on the policy because its apparent agent caused a condition precedent to fail.”  Id., 742.   The same reasoning suggests that Mr. Kriz's failure to attach the insuring provisions, the “jacket,” is chargeable to Lawyers Title and should not, alone, defeat U.S. Bank's reliance on the title commitment as a basis for liability on counts one and three.

FN6. Lawyers Title admits the allegation in the complaint that Mr. Kriz did, in fact, conduct the closing on August 14, 2007..  FN6. Lawyers Title admits the allegation in the complaint that Mr. Kriz did, in fact, conduct the closing on August 14, 2007.

FN7. “The closing protection letter is designed to persuade the underwriter's customers to trust their agents, thereby increasing policy sales.”  J.P. Morgan Chase Bank, N.A. & FDIC v. First American Title Ins. Co., supra, 795 F.Sup.2d 628..  FN7. “The closing protection letter is designed to persuade the underwriter's customers to trust their agents, thereby increasing policy sales.”  J.P. Morgan Chase Bank, N.A. & FDIC v. First American Title Ins. Co., supra, 795 F.Sup.2d 628.

FN8. Of course, the court expresses no opinion on the merits of U.S. Bank's claim of a CUTPA violation by Lawyers Title..  FN8. Of course, the court expresses no opinion on the merits of U.S. Bank's claim of a CUTPA violation by Lawyers Title.

Shortall, Joseph M., J.T.R.