FIDELITY NATIONAL TITLE INSURANCE COMPANY v. SKY ABSTRACT CORP (2026)

Order, Supreme Court, New York County (Louis L. Nock, J.), entered on or about September 6, 2024, which, to the extent appealed from, granted the motion of third-party defendant Nationwide Court Services, Inc. (Nationwide) to dismiss the third-party complaint as against it, unanimously affirmed, without costs.

This action arises from defendant Sky Abstract Corp.'s failure to timely record a first mortgage insured by plaintiff Fidelity National Title Insurance Company for a property in Brooklyn.  Fidelity retained Sky as its title insurance policy issuing agency, with a responsibility to record the mortgage.  However, Sky did not record the mortgage when it issued Fidelity's title policy to nonparty Greenpoint Mortgage Funding Inc. The property was later conveyed to Alexander Aber, who in turn granted a mortgage to nonparty JPMorgan Chase Bank, N.A., in exchange for a loan.  This mortgage was promptly recorded.  Alexander defaulted on his Chase loan in February 2008, and Chase brought a foreclosure action in June 2008.  It was not until July 2, 2008, that Sky recorded the initial mortgage.  Fidelity ultimately paid Greenpoint for the loss of its first priority position.  Fidelity then brought this action against Sky and third-party plaintiff, Joseph Kunstlinger, who guaranteed Sky's obligations to Fidelity.

Kunstlinger, in turn, filed third-party claims for common-law indemnification against Nationwide, who Kunstlinger alleges Sky retained to record the mortgage, and others.

Supreme Court properly dismissed Kunstlinger's claims against Nationwide for common-law indemnification.  A party bringing a common-law indemnification claim does not need to have a contractual relationship with the proposed indemnitor (see Raquet v. Braun, 90 N.Y.2d 177, 183, 659 N.Y.S.2d 237, 681 N.E.2d 404 [1997] ).  However, the indemnitee's obligation to pay the plaintiff must be predicated either on liability by operation of law, such as vicarious liability (id. at 182–183, 659 N.Y.S.2d 237, 681 N.E.2d 404;  Mas v. Two Bridges Assoc., 75 N.Y.2d 680, 690, 555 N.Y.S.2d 669, 554 N.E.2d 1257 [1990];  McCarthy v. Turner Constr., Inc., 17 N.Y.3d 369, 377–378, 929 N.Y.S.2d 556, 953 N.E.2d 794 [2011] ), or on an existing relationship between the indemnitor and the indemnitee, such as in the case of a guarantor and principal (see e.g. United Rentals [N. Am.], Inc. v. Iron Age Tool Corp., 150 A.D.3d 1304, 1306, 57 N.Y.S.3d 177 [2d Dept 2017] ).  Indeed, “the key element of a common-law cause of action for indemnification is not a duty running from the indemnitor to the injured party, but rather is a separate duty owed the indemnitee by the indemnitor” (Raquet, 90 N.Y.2d at 183, 659 N.Y.S.2d 237, 681 N.E.2d 404 [internal quotation marks omitted] ).

Reviewing the complaint under this framework, and affording the allegations a liberal construction and the presumption of truth, neither of the foregoing circumstances exist between Kunstlinger individually and defendants.

With respect to Nationwide, Kunstlinger alleges that “Sky provided Nationwide with the mortgage for recording,” but Nationwide failed to record the mortgage, rendering it directly at fault for Fidelity's, and in turn Kunstlinger's, damages.  Kunstlinger contends that he is free from wrongdoing and his obligation to pay Fidelity's damages is rooted solely in his purported guarantor status with Sky, with whom Nationwide had a direct relationship.  These allegations, even when liberally construed, fail to allege the type of direct relationship between Kunstlinger and Nationwide that is necessary to plead a common-law indemnity claim.

We have considered the remaining arguments and find them unavailing.