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Azran v. Fidelity National Financial, Inc.

United States District Court, N.D. Illinois, Eastern Division

August 3, 2016

DAVID AZRAN, Plaintiff,
v.
FIDELITY NATIONAL FINANCIAL, INC., TICOR TITLE INSURANCE COMPANY, and CHICAGO TITLE INSURANCE COMPANY, Defendants.

          MEMORANDUM OPINION AND ORDER

          JORGE L. ALONSO United States District Judge

         Before the Court are three motions. For the reasons explained below, Fidelity National Financial, Inc.’s motion to dismiss the Second Amended Complaint [25] is granted; plaintiff’s motion for leave to file a supplemental response to Fidelity National Financial, Inc.’s motion to dismiss [65] is granted; and Ticor Title Insurance Company and Chicago Title Insurance Company’s motion to dismiss the Second Amended Complaint [26] is granted in part and denied in part.

         BACKGROUND

         Plaintiff, David Azran, brought this suit for breach of contract, common-law and statutory fraud, and a bad-faith failure to pay a title insurance claim. He alleges that on March 5, 2008, he loaned Cesareo Olivo $65, 000 after Olivo had purchased a property at 6638 South Albany Avenue (the “Albany Property”) in Chicago. The loan was secured by a mortgage on the Albany Property. In connection with the loan, Ticor Title Insurance Company (“Ticor”) issued Azran a lender’s title policy, effective March 5, 2008. Ticor recorded the mortgage on August 11, 2008. Unbeknown to Azran, Olivo sold the Albany Property on July 28, 2008, before the mortgage was recorded. Olivo failed to pay the balance on the loan, and Azran says that he did not find out about the sale until January 2010. He contends that if Ticor had promptly recorded his mortgage, the loan would have been paid in full at the closing on Olivo’s sale of the Albany Property in 2008.

         Plaintiff names as defendants Ticor; Chicago Title Insurance Company (“Chicago Title”); and Fidelity National Financial, Inc. (“Fidelity”). Before the Court are defendants’ motions to dismiss the Second Amended Complaint (the “complaint”).

         DISCUSSION

         A. Legal Standards

         On a Rule 12(b)(6) motion to dismiss, the Court construes the complaint in the light most favorable to the plaintiff, accepts as true all well-pleaded facts in the complaint, and draws all reasonable inferences in plaintiff’s favor. Cincinnati Life Ins. Co. v. Beyrer, 722 F.3d 939, 946 (7th Cir. 2013). “[A] complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations” but must contain “enough facts to state a claim for relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556).

         District courts exercising diversity jurisdiction must apply the choice-of-law rules of the forum state to determine what substantive law governs the case. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941). The parties rely on Illinois law, so the Court will apply Illinois law. See Harter v. Iowa Grain Co., 220 F.3d 544, 559 n.13 (7th Cir. 2000) (the court will not perform an independent choice-of-law analysis where the parties agree on the governing law and the choice bears a “reasonable relation” to their dispute).

         B. Fidelity’s Motion

         Fidelity moves to dismiss the complaint on the ground that it “is not a proper defendant” and “[t]here is nothing that links [it] to any of the facts or allegations contained in” the complaint. (ECF No. 25, Fidelity’s Mot. at 3.) The complaint alleges that Fidelity is the parent company of Fidelity National Title Group (“FNTG”), of which the other defendants are a part. (ECF No. 17-1, Second Am. Compl. at 2.) Plaintiff’s claims against Fidelity appear to rely on the allegations that his title insurance claim was wrongfully denied, “FNTG” then accused him of “wrongful conduct, ” and Fidelity tried to “substitute a bogus title insurance policy” issued in the name of Chicago Title. The complaint often treats defendants as a group or refers to FNTG, a non-party (and, evidently, merely a business name), as having engaged in misconduct. The Court is unable to discern a complete claim against Fidelity itself. Plaintiff’s assertion that Fidelity had an “active role” in the denial of his insurance claim is misplaced because he does not allege that he had a contract with Fidelity. Similarly, plaintiff’s contention that “FNTG and each of FNTG’s members are simply acting as [Fidelity’s] alter egos under the direction of [Fidelity’s] CEO, ” (ECF No. 31, Pl.’s Resp. at 4), is unpersuasive because there are no alter-ego allegations in the complaint. The fact that Fidelity may be the parent company of one of the other defendant entities is not enough to allege alter-ego liability.[1] See, e.g., Zurich Am. Ins. Co. v. Watts Indus., 417 F.3d 682, 688 (7th Cir. 2005). To the extent that plaintiff is attempting to allege that Fidelity engaged in fraud, the Court addresses plaintiff’s deficient fraud allegations below.

         Fidelity is therefore dismissed from this action. Although Fidelity requests a with-prejudice dismissal, the dismissal will be without prejudice. It appears unlikely that plaintiff will be able to state a claim against Fidelity, but at this juncture the Court is unable to say that it is impossible.

         C. Ticor and Chicago Title’s Motion

         1. Breach of ...


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