Stewart Title Guaranty Co. v. Kelly ( 2020 )

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19-P-41 Appeals Court
STEWART TITLE GUARANTY COMPANY vs. SHANE M. KELLY.
No. 19-P-41.
Suffolk. November 14, 2019. - April 17, 2020.
Present: Kinder, Neyman, & Wendlandt, JJ.
Insurance, Title insurance, Subrogation. Subrogation. Real
Property, Mortgage, Title insurance. Mortgage, Discharge.
Contract, Insurance, Parties, Performance and breach,
Unjust enrichment. Unjust Enrichment. Practice, Civil,
Burden of proof, Summary judgment.
Civil action commenced in the Superior Court Department on
July 28, 2016.
The case was heard by Elizabeth M. Fahey, J., on motions
for summary judgment, and a motion for reconsideration was
considered by her.
Beth R. Levenson (Scott J. Clifford also present) for the
plaintiff.
Shane M. Kelly, pro se, submitted a brief.
WENDLANDT, J. This action presents occasion to address the
doctrine of subrogation in the context of a title insurance
policy, as well as the requirement of Mass. R. Civ. P. 56, 365
2
Mass. 824 (1974), that a party with the burden of proof on an
issue at trial come forward with evidence supporting the
essential elements of its claims. The plaintiff, Stewart Title
Guaranty Company (Stewart Title), a title insurance company,
brought the present action in Superior Court for breach of
contract and unjust enrichment. It sought to recover monies it
paid to discharge a first priority mortgage on real property in
the Allston section of Boston (property) owned by the defendant,
Shane M. Kelly. Stewart Title claimed that, pursuant to a title
insurance policy it held with JPMorgan Chase Bank, N.A.
(JPMorgan), the mortgagee on a second mortgage on the property,
Stewart Title was subrogated to JPMorgan's right to pursue a
claim against Kelly for breach of a provision of the second
mortgage. That provision essentially required Kelly to
discharge the first priority mortgage upon request by JPMorgan.
Kelly's defense principally relied on a theory that he had
no contractual relationship with Stewart Title, specifically
disputing Stewart Title's subrogation rights. It is undisputed
that he was not aware, until the filing of the present action,
that Stewart Title had paid to discharge the first mortgage. On
cross motions for summary judgment, a Superior Court judge
3
granted summary judgment in favor of Kelly.1 The judge denied
Stewart Title's subsequent motion for reconsideration. We
affirm.
Background. We summarize the evidence in the light most
favorable to Stewart Title, the party against whom the judge
allowed summary judgment. See Lambert v. Fleet Nat'l Bank, 449
Mass. 119, 120 (2007).
In 2001, Kelly, who was in the business of renovating
homes, acquired title to the property. In 2003, Kelly borrowed
$322,500 from Chevy Chase Bank, F.S.B. (Chevy Chase) secured by
a mortgage (first mortgage) to Mortgage Electronic Registration
Systems (MERS), as nominee for Chevy Chase, on the property.
Attorney Roseann Conti conducted the closing. The first
mortgage was recorded with the Suffolk County registry of deeds,
resulting in a first priority lien on the property.
In 2007, Kelly granted another mortgage (second mortgage)
on the property. As set forth supra, the second mortgage was to
JPMorgan, securing a promissory note for the $382,500 loaned to
Kelly by JPMorgan.2 JPMorgan retained Conti to conduct the
1 Kelly moved for summary judgment on all claims; Stewart
Title moved for summary judgment as to only its claim for breach
of contract.
2 Kelly did not use the proceeds from the loan secured by
the second mortgage to pay off the first mortgage; and no
provision of the second mortgage expressly required him to do
4
closing; however, despite knowledge of the first mortgage, Conti
did not notify JPMorgan. The second mortgage also was recorded
with the Suffolk County registry of deeds.
In connection with the second mortgage transaction,
JPMorgan acquired a title insurance policy from Stewart Title.
Conti acted as Stewart Title's agent. Again, Conti failed to
provide notice of the first mortgage. Thereafter, Kelly
continued to make payments on both the first and second
mortgages.
In May 2012, JPMorgan filed a complaint in Land Court to
reform the second mortgage on the basis that, as a result of a
mutual mistake, Kelly's signature was not affixed to the second
mortgage. Kelly received notice of the action, but did not
respond or otherwise appear. In February 2013, a Land Court
judge ordered a default judgment in favor of JPMorgan, reforming
the second mortgage.3
Thereafter, JPMorgan learned of the first mortgage and, in
December 2013, made a written demand to Kelly that he discharge
so. As set forth at note 4, infra, however, Kelly was required
"promptly" to discharge any priority liens.
3 The Land Court judgment also provided:
"[N]othing in this Judgment shall extend to . . . title and
interest in the Property of any party holding a record
interest in the Property who . . . has not been named as a
party to this proceeding in this court . . . ."
5
it. Specifically, JPMorgan invoked a provision of the second
mortgage, allowing JPMorgan to identify a priority lien on the
property and, upon notice to Kelly, to require him to discharge
it within ten days.4 Kelly did not discharge the first mortgage.
In addition, Kelly stopped making monthly payments to JPMorgan;
however, he continued to make payments on the loan secured by
the first mortgage. Eventually, faced with economic pressure,
Kelly contacted the office of the Attorney General to assist him
to restructure the first and second mortgages.
Relevant to the present dispute, the second mortgage
provided that, if Kelly failed to discharge the first mortgage,
JPMorgan could itself elect to discharge the priority lien and
add the amount paid to Kelly's debt secured by the second
mortgage.5 The second mortgage also provided that, upon request
4 Section 4 of the second mortgage provided:
"[Kelly] shall promptly discharge any lien which has
priority over this Security Instrument . . . . If
[JPMorgan] determines that any part of the Property is
subject to a lien which can attain priority over this
Security Instrument, [JPMorgan] may give [Kelly] a notice
identifying the lien. Within 10 days of the date on which
that notice is given, [Kelly] shall satisfy the
lien . . . ."
Section 4 contained other cure provisions; however, Kelly did
not invoke them.
5 Section 9 of the second mortgage provided:
"If (a) [Kelly] fails to perform the covenants and
agreements contained in this Security Instrument . . . then
6
by JPMorgan, any amount so paid by JPMorgan "shall be payable."
The record contains no such request.
Meanwhile, in December 2015, apparently in response to a
claim by JPMorgan on the title insurance policy, Stewart Title
had $268,084.83 paid to Chevy Chase's successor in interest to
discharge the first mortgage held by MERS.6 Stewart Title did
not inform Kelly (or the Attorney General) that it had taken
this action. In December 2016, following a negotiated
restructuring by the Attorney General, Kelly entered into a new
mortgage agreement (third mortgage) with a principal balance of
$562,159.847 owed to JPMorgan.
[JPMorgan] may do and pay for whatever is reasonable or
appropriate to protect [JPMorgan's] interest in the
Property and rights under this Security Instrument . . . .
[JPMorgan's] actions can include, but are not limited to:
(a) paying any sums secured by a lien which has priority
over this Security Instrument . . . . Any amounts
disbursed by [JPMorgan] under this Section 9 shall become
additional debt of [Kelly] secured by this Security
Instrument. These amounts shall bear interest at the Note
rate from the date of disbursement and shall be payable,
with such interest, upon notice from [JPMorgan] to [Kelly]
requesting payment."
6 The summary judgment record does not include evidence of
payment by Stewart Title to either JPMorgan or Chevy Chase's
successor in interest. Instead, the record includes a check
issued by JPMorgan and payable to Chevy Chase's successor in
interest. The check was sent with a cover letter apparently
from Stewart Title. Accordingly, the record is unclear, at
best, as to whether Stewart Title paid to discharge the first
mortgage.
7 The record is devoid of an explanation for the increase in
the amount of principal from the second mortgage to the third
7
Following discharge of the first mortgage, Stewart Title
asserted an attorney malpractice claim against Conti, which
Stewart Title elected to settle for $131,683.27 –- an amount
less than the full amount paid to discharge the first mortgage.
As set forth supra, Conti had failed to disclose the existence
of the first mortgage; as a result, Stewart Title through its
agent, Conti, failed to disclose the first mortgage to JPMorgan,
JPMorgan did not learn of the first mortgage timely, and Stewart
Title did not exclude the first mortgage from the policy
coverage.8
Stewart Title filed the present action against Kelly,
seeking the difference between the payment made to discharge the
first mortgage and the sum recovered from Conti. Stewart Title
claimed that it was entitled to damages against Kelly because
(1) Kelly breached the second mortgage when he failed to
discharge the first mortgage, and as JPMorgan's title insurer,
Stewart Title had the right as subrogee to enforce the second
mortgage. It is not clear, for example, whether the amount
increased due to JPMorgan adding the amount paid to discharge
the first mortgage to Kelly's overall indebtedness pursuant to
section 9 of the second mortgage. See notes 5-6, supra.
8 "'[A] title insurance policy . . . is . . . an agreement
to indemnify the policyholder . . . against loss through defects
in title' . . . . Before issuing a policy, a title insurer
searches real property records for title defects and, if any are
discovered, excludes such known defects from the policy
coverage." GMAC Mtge., LLC v. First Am. Title Ins. Co., 464
Mass. 733, 739 (2013), quoting B. Burke, Law of Title Insurance
§ 2.01[A], at 2–5 (3d ed. Supp. 2012).
8
mortgage against Kelly; and (2) Stewart Title's payment to
discharge the first mortgage unjustly enriched Kelly. Stewart
Title and Kelly filed cross motions for summary judgment. The
judge allowed Kelly's motion and denied Stewart Title's motion.
Stewart Title filed a motion for reconsideration with an
accompanying affidavit averring, for the first time, that the
title insurance policy (on which Stewart Title exclusively had
relied in its summary judgment papers in support of its position
that it was JPMorgan's subrogee) was only a portion of a larger
title insurance policy between Stewart Title and JPMorgan.
Specifically, Stewart Title averred that the title insurance
policy that it had offered during the summary judgment stage was
missing a "jacket," which included an express subrogation
clause. The judge denied the motion.
Discussion. Our review of the judge's decision on summary
judgment is de novo. Pinti v. Emigrant Mtge. Co., 472 Mass.
226, 231 (2015). On appeal, we ask "whether, viewing the
evidence in the light most favorable to the nonmoving party, all
material facts have been established and the moving party is
entitled to a judgment as a matter of law." Augat, Inc. v.
Liberty Mut. Ins. Co., 410 Mass. 117, 120 (1991), citing Mass.
R. Civ. P. 56 (c), 365 Mass. 824 (1974). "[A] party moving for
summary judgment in a case in which the opposing party will have
the burden of proof at trial is entitled to summary judgment if
9
he demonstrates, by reference to material described in Mass. R.
Civ. P. 56 (c), unmet by countervailing materials, that the
party opposing the motion has no reasonable expectation of
proving an essential element of that party's case."
Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716
(1991).
1. Breach of contract. Stewart Title's claim for breach
of contract rested on its allegation that Kelly breached the
second mortgage when, in December 2013, he failed to discharge
the first mortgage. Because Stewart Title was not a party to
the second mortgage, an essential element of its claim was proof
of its status as JPMorgan's subrogee.
"Subrogation is an equitable adjustment of rights that
operates when a creditor or victim of loss is entitled to
recover from two sources, one of which bears a primary legal
responsibility. If the secondary source (the subrogee) pays the
obligation, it succeeds to the rights of the party it has paid
(the creditor or loss victim, called the subrogor) against the
third, primarily responsible party." Frost v. Porter Leasing
Corp., 386 Mass. 425, 426-427 (1982). The doctrine applies,
with certain limits, to policies of insurance such that, upon
payment to the insured, "the insurer is entitled to share the
benefit of any rights of recovery the insured may have against
[the primarily responsible party] for the same loss covered."
10
Id. at 427. "An insurer's right of subrogation may be reserved
in an [express] agreement between the insurer and the insured
. . . or may arise by implication." Id.
a. Express subrogation. Stewart Title's breach of
contract claim was based on its position that it was JPMorgan's
subrogee through an express agreement in its title insurance
policy with JPMorgan. Throughout the litigation, including in
its complaint and in its summary judgment papers, Stewart Title
exclusively relied on the title insurance document appended to
its complaint in support of its subrogee status. The judge,
examining this document, concluded that the policy did not have
an express subrogation clause. On appeal, Stewart Title does
not argue otherwise; indeed, our own review of the document
confirms the judge's conclusion.
Instead, Stewart Title contends that the judge's reliance
on its failure to come forward with an express subrogation
clause was error because it was not aware that its status as
subrogee was disputed. The record, however, reveals that
Stewart Title's position is untenable. Throughout the
litigation, Kelly's position was that he owed no contractual
obligation to Stewart Title because it was not subrogated to
JPMorgan's rights under the second mortgage as modified by the
Land Court judgment.
11
In his answer, Kelly expressly denied Stewart Title's
allegation that it was a subrogee to JPMorgan.9 The answer also
sets forth Kelly's position that Stewart Title "has no standing
to sue [Kelly] . . . because it was not a party to the contract
or a party to the Land Court judgment."
Continuing to assert this defense in his motion for summary
judgment, Kelly argued that Stewart Title could not enforce the
second mortgage because "there was no contractual relationship
between Stewart and Kelly," and it was not a party to the Land
Court judgment reforming the second mortgage. In other words,
Kelly made plain that he disputed Stewart Title's position that
it could enforce the second mortgage as subrogee of JPMorgan.10
Similarly, in his opposition to Stewart Title's cross
motion for summary judgment, Kelly (again) disputed that Stewart
Title was a subrogee with rights to enforce the second mortgage.
9 Kelly's affirmative defenses included: "[Stewart Title]
does not have any signed agreement with [Kelly] allowing it to
be first lien holder on the [property]. [Stewart Title] lacks
any contractual relationship with [Kelly]" (emphasis added); and
because Stewart Title was not a party to the Land Court
judgment, "it is prohibited from using the terms of that
judgment against [Kelly] or otherwise stepping into the shoes of
a party to that judgment" (emphasis added).
10Kelly, who was pro se, also argued that Stewart Title's
position was a "manipulation of how subrogation is applied"
because it sought to elevate JPMorgan to the priority lien
position even though Stewart Title had paid MERS, which would
(Kelly argued) at best entitle Stewart Title to be subrogated to
MERS, putting Stewart Title in the place of MERS –- in a senior
lien position to its own client, JPMorgan.
12
Indeed, Kelly's entire defense to the breach of contract claim
rested on the argument that Stewart Title had no standing to
bring its claim because it was not a party to the second
mortgage as reformed by the Land Court judgment. As but one
example, Kelly's response to Stewart Title's "Statement of
Material Facts" at the summary judgment stage stated:
"Kelly disputes that he is obligated to pay [Stewart Title]
any amounts due to its loss under any contract or
subrogation theory. The Land Court judgment is enforceable
only between Kelly and [JPMorgan] as they were the only
parties to that court action. [Stewart Title] cannot be a
subrogee to the Land Court judgment. [Stewart Title]
cannot enforce an unsigned contract it was not a party to."
(Emphasis added.)
In fact, Stewart Title acknowledged this as the "crux" of
Kelly's argument11 and responded by stating that it had standing
to enforce the second mortgage as reformed by the Land Court
judgment because it was the subrogee of JPMorgan.12 Given this
extensive history, Stewart Title's position that it was not
aware of the dispute concerning its status as subrogee to
11Stewart Title asserts that Kelly disputed only the
enforceability of the Land Court judgment by Stewart Title, as
opposed to JPMorgan, based on the language of the Land Court
judgment. See note 3, supra. Even this myopic reading of
Kelly's position, however, required Stewart Title to show that
it was subrogated to the rights of JPMorgan, the actual party in
the Land Court judgment. Indeed, this was the "crux" of Kelly's
argument and the "crux" of Stewart Title's response.
12The issue of Stewart Title's standing to enforce the
second mortgage also arose at the hearing on the cross motions.
13
JPMorgan -- an essential element of its breach of contract claim
-- has no basis.
To prove its breach of contract claim, Stewart Title was
required to show that it had a contract with Kelly, or (as was
its theory) that it was subrogated to JPMorgan's rights under
the second mortgage. See George W. Wilcox, Inc. v. Shell E.
Petroleum Prods., Inc., 283 Mass. 383, 388 (1933) (proof of
enforceable contract required to recover for breach of
contract); 13 S.H. Jenkins, Corbin on Contracts § 67.39(2), at
19 (J.M. Perillo ed., rev. ed. 2003) ("In an action for damages
or other type of reparation for a breach of contract, the
plaintiff must allege and prove the making of the contract and
the fact of the breach"). See also General Exchange Ins. Corp.
v. Driscoll, 315 Mass. 360, 364 (1944) (claim of subrogation
rights under contract, rather than equitable principles,
requires proof of express subrogation language). Stewart Title
chose to rely exclusively on a document that contains no express
subrogation clause to support its position (which Kelly
throughout the litigation disputed) that it was JPMorgan's
subrogee. Stewart Title maintains that it never contended that
the document it submitted in support of its position that it was
JPMorgan's subrogee was the entirety of the title insurance
policy. As the party with the burden to establish a contractual
right against Kelly, however, it was incumbent upon Stewart
14
Title to support its claim for subrogation. It cannot, at the
summary judgment stage, rely on mere allegations or documents
that fail to support its position. See Madsen v. Erwin, 395
Mass. 715, 719 (1985); Mass. R. Civ. P. 56 (e), 365 Mass. 824
(1974).
As set forth supra, Stewart Title filed a motion for
reconsideration and an accompanying affidavit from its employee,
attaching a "jacket" that contained an express subrogation
provision; Stewart Title contends that the judge abused her
discretion by denying its motion. See Audubon Hill S. Condo.
Ass'n v. Community Ass'n Underwriters of Am., Inc., 82 Mass.
App. Ct. 461, 470 (2012) (denial of Mass. R. Civ. P. 60 [b], 365
Mass. 828 [1974], motion reviewed for abuse of discretion).
Where a party moves for reconsideration based on newly submitted
evidence, it must show that its failure to submit the evidence
earlier was the result of a "mistake, inadvertence, surprise, or
excusable neglect." Cullen Enters., Inc. v. Massachusetts
Property Ins. Underwriting Ass'n, 399 Mass. 886, 893-894 (1987),
quoting Mass. R. Civ. P. 60 (b). Given the disputed nature of
Stewart Title's subrogation theory, the judge acted within her
discretion in denying the motion. See Tai v. Boston, 45 Mass.
App. Ct. 220, 222-223 (1998) ("simple oversight" not excusable
neglect).
15
b. Implied subrogation. In the alternative, Stewart Title
contends that it is entitled to implied subrogation to pursue
its contract claim because without it, JPMorgan (its insured)
would receive a windfall because it "would have benefitted by
removing the priority mortgage without having to pay for this to
be done."13 While "[t]he reason for implied subrogation under
contracts of insurance is to prevent an unwarranted windfall to
the insured," it is not at all clear how allowing Stewart Title
to pursue a claim against Kelly avoids a windfall to JPMorgan.
Frost, 386 Mass. at 428.
Moreover, unlike in cases allowing a title insurer to be
subrogated to the rights of its insured-mortgagee against a
mortgagor, Kelly is not primarily liable for JPMorgan's loss.14
13Of course, JPMorgan paid Stewart Title (in the form of
closing costs from Kelly) the premium for the title insurance
policy to protect itself from the very risk Stewart Title
eventually was called upon to cure. "'Unlike other forms of
insurance, title insurance is not directed at future risks. It
is directed at risks that are already in existence on the date
the policy is issued.' Because title insurance narrowly covers
defects in, or encumbrances on, titles that are in existence
when a policy issues, title insurers attempt to eliminate or
reduce risks prior to the issuance of a title insurance
policy. . . . [T]itle insurance typically requires a single
premium payment (often a percentage of the property value) for
indefinite coverage . . . ." GMAC Mtge., LLC v. First Am. Title
Ins. Co., 464 Mass. 733, 740 (2013), quoting B. Burke, Law of
Title Insurance § 2.01[C], at 2-22 (3d ed. Supp. 2008).
14In order to recover under implied subrogation, (1) the
insured must have suffered an actual loss for which a third
party is primarily liable; (2) the insurer must have compensated
the insured for the same loss; and (3) the insurer must have
16
Kelly, for example, did not represent that the property was
clear of all encumbrances. Contrast American Title Ins. Co. v.
Coakley, 419 So. 2d 816, 816 (Fla. Dist. Ct. App. 1982)
(permitting title insurer, which paid to clear priority Internal
Revenue Service lien, to be subrogated to rights of its insured
where third party failed to disclose lien on property despite
covenant to do so); Transamerica Title Ins. Co. v. Johnson, 103
Wash. 2d 409, 417-418 (1985) (permitting title insurance
company, which paid to clear sewer lien on property, to be
subrogated pursuant to express clause in title insurance policy
to buyer's rights where seller covenanted to provide property
free and clear of all liens).
Here, Stewart Title bears the responsibility because it
(through its agent, Conti) knew that the first mortgage
encumbered the property and failed to disclose it to JPMorgan,
thereby depriving JPMorgan of the opportunity to mandate that
the encumbrance be cleared as a condition of the second
mortgage. Stewart Title now wishes to be subrogated to the
right of JPMorgan when, years after Stewart Title's negligence
in failing to disclose the first mortgage to JPMorgan, Kelly
breached a provision of the second mortgage, requiring him to
been obligated to make the payment as a duty to indemnify the
insured in order to protect its own interest, rather than as a
volunteer. See 16 L.R. Russ & T.F. Segalla, Couch on Insurance
3d § 223:1 (2005). See also Frost, 386 Mass. at 428-429.
17
clear the first mortgage within ten days' notice. Stewart Title
does not cite to any case law where implied subrogation was
allowed under such circumstances. Indeed, the few cases outside
Massachusetts that address similar (albeit not identical)
situations in the title insurance context hold otherwise. See,
e.g., USLife Title Ins. Co. of Dallas v. Romero, 98 N.M. 699,
703 (1982) (negligence of title insurance company in failing to
exclude known tax lien from coverage under its policy precluded
subrogation when it paid lien pursuant to policy); Lawyers Title
Ins. Corp. v. Edmar Constr. Co., 294 A.2d 865, 869 (D.C. 1972)
(subrogation principles did not permit title insurer to recover
from construction company amount it paid to discharge senior
lienholder where it issued title insurance policy knowing of
priority lien); Lawyers Title Ins. Corp. v. Capp, 174 Ind. App.
633, 637 (1977) (subrogation not available to title insurer to
seek repayment of amount it paid under its policy in view of
fact that insurer's negligence contributed to its failure to
exclude defect in title from its policy).
Some jurisdictions have gone so far as to foreclose
subrogation altogether in such circumstances. See Coy v. Raabe,
69 Wash. 2d 346, 351 (1966) ("it is difficult to think of a
situation in which a title insurance company could not claim
unjust enrichment as to someone who might inadvertently benefit
by their negligence. Either they insure or they don't. It is
18
not the province of the court to relieve a title insurance
company of its contractual obligation"). We need not go so far.
It is sufficient that on the record presented here, the equities
do not favor Stewart Title.
Stewart Title's position regarding its rights as JPMorgan's
subrogee is fatally flawed for an additional reason. When Kelly
breached the provision of the second mortgage requiring him to
pay to discharge the first mortgage, JPMorgan's remedy was
itself to elect to discharge the first mortgage. If it elected
to do so, JPMorgan would be entitled, under the second mortgage,
to add the discharge payment as "additional debt" to the second
mortgage. This additional indebtedness would bear interest as
set forth in the note secured by the second mortgage.
The second mortgage further allowed JPMorgan to request
payment of the additional indebtedness. The record, however, is
devoid of any such request. Thus, nothing in the second
mortgage permits Stewart Title to the lump sum payment it now
seeks.15 See Frost, 386 Mass. at 427 ("If the secondary source
[the subrogee] pays the obligation, it succeeds to the rights of
the party it has paid [the creditor or loss victim, called the
subrogor] against the third, primarily responsible party").
15Neither party addresses the impact of the third mortgage
on the foregoing.
19
2. Unjust enrichment. Stewart Title contends that there
is a material dispute of fact as to whether Kelly reasonably
should have expected it to pay to discharge the first mortgage
and thus that summary judgment should not have entered as to
that claim. In order to recover for unjust enrichment, a
plaintiff must prove that (1) it conferred a measurable benefit
upon the defendant; (2) it reasonably expected compensation from
the defendant; and (3) the defendant accepted the benefit with
the knowledge, actual or chargeable, of the plaintiff's
reasonable expectation. See Finard & Co. v. Sitt Asset Mgt., 79
Mass. App. Ct. 226, 229 (2011). Here, Stewart Title's claim
falters on at least the third element. It is undisputed that
Kelly's first notice that Stewart Title paid to discharge the
first mortgage came when Stewart Title filed the present action.
There is no evidence that Kelly had actual or constructive
knowledge of Stewart Title's intent or plan to discharge the
first mortgage, or Stewart Title's expectation to be compensated
by Kelly for its action. At best, the record shows that Kelly
should have known that, following his inability to pay to
discharge the first mortgage, JPMorgan could elect to discharge
it and add the amount to Kelly's overall indebtedness at the
agreed upon interest rate. In light of the foregoing, summary
judgment was proper.16
16 Stewart Title's request for appellate attorney's fees and
20
Judgment affirmed.
Order denying motion for
reconsideration affirmed.
costs is denied.