Old Republic Nat'l Title Ins. Co. v. Transcon. Title Co.

• Court: Superior Court of Maine
• Decided: November 29, 2007
• Docket: CUMcv-07-182
• Status: Unpublished

Opinion

STATE OF MAINE SUPERIOR COURT CUMBERLAND, ss. CIVIL ACTION

_T~:)- C,,"'I\- tI/; _ Docket No. CV-O(~~t DC')

OLD REPUBLIC NATIONAL TITLE INSURANCE CO.,

Plaintiff,

v. ORDER

TRANSCONTINENTAL TITLE CO.,

Defendant.

Before the court is defendant's motion to dismiss Count IV of the complaint.

Count IV is a request for a declaratory judgment with respect to the rights and

liabilities of plaintiff Old Republic National Insurance Co. and defendant

Transcontinental Title Co. in light of a March 21, 2006 letter from Transcontinental

stating its intention to terminate an agreement whereby Transcontinental had served as

Old Republic's agent for issuing title insurance policies (the "agency agreement").

Transcontinental asserts without contradiction that it is a Florida corporation and

that Old Republic is a Minnesota corporation. The agency agreement that was the

subject of Transcontinental's March 21, 2006 letter is a national agreement which applies

to some 35 states, including Maine, and the District of Columbia. Transcontinental also

asserts without contradiction that Old Republic has sued Transcontinental in at least 16

states and that in each of those states Old Republic has sought, inter alia, a declaratory

judgment that is identical or essentially identical to the declaratory judgment sought

here in Count IV.

According to Transcontinental, the first lawsuit brought by Old Republic against

Transcontinental containing this declaratory judgment request was filed in Massachusetts in September 2006, six and a half months prior to the commencement of

this action in Maine. The Massachusetts action was removed to the United States

District Court for the District of Massachusetts, where Transcontinental has filed a

counterclaim. Transcontinental contends that in light of the previously commenced

Massachusetts action and in light of the pending litigation on the same issue in 14 other

jurisdictions, Count IV should be dismissed with prejudice.

Transcontinental does not seek dismissal of Counts I through III of the

complaint, in which Old Republic alleges that Transcontinental violated its duties under

the agency agreement with respect to a specific refinancing transaction involving a

residence in Maine owned by persons named Benoit. Old Republic's complaint does

not identify when its claims involving the Benoit refinancing arose, although it is logical

to assume that the alleged acts and omissions that are complained of in connection with

the Benoit refinancing occurred prior to the termination of the agency relationship.

Transcontinental's motion to dismiss Count IV with prejudice is denied. The

claim in Count IV has not been litigated on the merits. However, any dismissal of that

claim with prejudice might arguably be given res judicata or collateral estoppel effect.

Even the case relied upon by Transcontinental, Eastern Fine Paper Inc. v. Garriga Trading

Co. Inc., 457 A.2d 1111, 1116 (Me. 1983), resulted only in a dismissal without prejudice.

Moreover, Eastern Fine Paper is distinguishable here because that case turned in part

upon politically sensitive questions under the law of Puerto Rico in an area where the

law of Puerto Rico was being rapidly developed by the Supreme Court of Puerto Rico.

No similar situation is present in this case. Other than pointing out the

duplication of effort and the potential inconsistencies that might result from proceeding

with litigation in 16 states, Transcontinental has not offered any reason why any

particular court is better equipped to decide the issues raised under Count IV. The

2 federal court in Massachusetts presumably has a head start, but if that case were to be

resolved on other grounds, Count IV would remain to be decided. Accordingly, to the

extent that Transcontinental is alternatively seeking to have Count IV dismissed

without prejudice, that request is also denied at this time.

At the same time, on this record it does not appear that Old Republic and

Transcontinental have any particular ties in Maine as opposed to their states of

incorporation, the states where their main offices are located, and the state or states

where the agency agreement that is the subject of Count IV was negotiated. 1 The court

sees no reason at this time why it should duplicate the work of the federal court in

Massachusetts or that of the various other courts where the same declaratory relief is

being sought.

Moreover, the issues in Count IV do not appear to be intertwined with the issues

in Counts I-III. Count IV concerns the interpretation of the "excessive claims/ stop loss"

provision of the agency agreement and whether that provision remains in effect in light

of the March 21, 2006 termination letter. If applicable, that provision arguably requires

reimbursement by Transcontinental if the aggregate amount paid by Old Republic on

all claims (not just Maine claims) in a given year exceeds 5% of the gross premiums

remitted to Old Republic by Transcontinental for that same year. In contrast, the issues

in Counts I through III involve specific alleged breaches of the agency agreement with

respect to a Maine refinancing.

Therefore the court will exercise its inherent authority to stay proceedings on

Count IV at this time 2 and will direct the parties to proceed with litigation on Counts I­

1 The record does not reveal where the head offices of Old Republic and Transcontinental are located, nor does it reveal where the agency agreement was reached. Neither party has suggested that this occurred in Maine. 2 See Landis v. North American Co., 299 U.S. 248,254-55 (1936).

3 III. At a later date, depending on the status of the other pending actions and what

happens with respect to Counts I through III, the court will consider whether to lift the

stay and proceed with respect to Count IV.

The parties have sought a new scheduling order and have requested exemption

from ADR. The court agrees that a scheduling order shall be amended in the following

respects, and the following deadlines shall apply to Counts I through III:

Discovery deadline: May 27, 2008 Plaintiff to designate experts: January 27, 2008 Defendant to designate experts: March 27, 2008 Jury trial request from plaintiffs (with fee): March 15,2008 Jury trial request from defendants (with fee): March 30,2008

The court will not relieve the parties from ADR. While it may be unproductive

for the national issues between the parties that are involved in Count IV to be mediated

in Maine, there is no reason why the specific Maine issues (Counts I-III) cannot be

mediated, and it is also possible that this entire action could be mediated and resolved

without prejudice to the parties' respective positions on the litigation pending in other

states. ADR deadline: April 30, 2008.

The entry shall be:

Defendant's motion to dismiss Count IV is denied. Proceedings on Count IV are

stayed pending further order of the court. Amended scheduling order issued. The

clerk is directed to incorporate this order in the docket by reference pursuant to Rule

79(a).

DATED: November ~ 2007.

Thomas D. Warren Justice, Superior Court

4 F COURTS md County 30x 287 ne 04112-0287

JOHN MCVEIGH ESQ PO BOX 9546 PORTLAND ME 04112

IF COURTS and County 30x 287 ine 04112-0287

JERROL CROUTER ESQ PO BOX 9781 PORTLAND ME 04104