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Williams v. Stewart Title Co.

United States District Court, D. Colorado

March 11, 2019

ILON T. WILLIAMS, Plaintiff,



         This matter comes before the Court on defendant Stewart Title Company's Renewed Motion to Dismiss [Docket No. 26]. The Court has jurisdiction pursuant to 28 U.S.C. § 1332.

         I. BACKGROUND

         The allegations in plaintiff's Amended Complaint [Docket No. 21] are to be taken as true in considering a motion to dismiss. Brown v. Montoya, 662 F.3d 1152, 1162 (10th Cir. 2011).

         In March 2012, Ryan Altman sustained injuries while making renovations on plaintiff's home in Boulder, Colorado. Docket No. 21 at 3, ¶ 8. Altman subsequently asserted a premises-liability claim against plaintiff Ilon T. Williams and obtained a default judgment in the amount of $1, 367, 386.30. Id. at 3-4, ¶¶ 10-12. On September 18, 2014, Altman recorded a lien against plaintiff's home and other properties she owns in the amount of the judgment. Id. at 4, ¶ 13. Plaintiff became aware of the lien on March 16, 2015. Id., ¶ 14.

         In January 2016, plaintiff entered into a contract to sell her Boulder house to Asher and Martina Panian. Id. at 5, ¶ 23.[1] The Panians hired defendant to act as the title company, provide title insurance, and close the transaction. Id., ¶ 25. The closing agreement, executed by plaintiff, defendant, and the Panians, required defendant to furnish a title insurance policy to the Panians upon completion of a satisfactory title search and examination. Docket No. 21 at 6-7, ¶¶ 36, 39. Defendant issued a title commitment to the Panians on behalf of Stewart Title Guaranty Company (“STGC”). Id. at 6, ¶ 33; see also Docket No. 21-2 at 2-3. Defendant issued the policy without identifying Altman's lien. Id. at 8, ¶ 52. After closing, it was discovered that Altman's lien remained on the property. Id. at 8, ¶ 51.

         In the name of the Panians, STGC initiated a lawsuit in the District Court of Boulder County, Colorado (the “state court action”) against Altman and plaintiff, alleging that, in the course of issuing the title insurance policy, plaintiff represented under oath that there were no secured interests or liens on her property. Id. at 8-9, ¶¶ 54-55; Docket No. 26-3 at 2, ¶ 10.[2] Plaintiff counterclaimed, alleging in part that STGC acted through its “authorized agent, [defendant], ” to conduct the closing of the sale of the Boulder house. Docket No. 26-4 at 11, ¶ 15. After a trial in late 2017, a jury found plaintiff liable for breach of contract, fraudulent concealment, fraudulent misrepresentation, and fraudulent inducement against STGC, as well as liable on four other claims. Docket No. 26-1 at 3-11. The jury found STGC not liable on plaintiff's counterclaims for negligent misrepresentation, fraudulent concealment, and fraudulent misrepresentation. Id. at 14-21. Plaintiff has appealed the verdict to the Colorado Court of Appeals. Docket No. 26-2.

         On February 16, 2018, plaintiff filed this lawsuit. Docket No. 1. The operative complaint includes claims against defendant for negligence per se, breach of contract, and negligent misrepresentation/nondisclosure causing loss in a business transaction. Docket No. 21 at 10-13. Other than the breach of contract claim here, the allegations in the complaint are nearly identical to the allegations made against STGC in the state court action. See id. at 13-15, ¶¶ 91-105; Docket No. 26-4 at 17-18, ¶¶ 74-83.

         Defendant offers four reasons for dismissing plaintiff's claims. Docket No. 26 at 2. First, it argues that plaintiff has not met the amount-in-controversy requirement, warranting dismissal under Fed.R.Civ.P. 12(b)(1). Id. Second, defendant argues that plaintiff's claims are compulsory counterclaims under Colo. R. Civ. P. 13(a) that should have been brought in the state court action. Id. at 4-5. Third, defendant argues that the Court should dismiss or stay this case either under the Colorado River doctrine or based on res judicata because the issues have been resolved in defendant's favor in the parallel state court action. Id. at 5-6. Finally, defendant argues that plaintiff fails to state a claim for which relief can be granted under Fed.R.Civ.P. 12(b)(6). Id. at 10.

         II. ANALYSIS

         A. Subject Matter Jurisdiction

         Defendant first argues that plaintiff has not satisfied the amount-in-controversy requirement needed to establish federal jurisdiction.

         A motion under Fed.R.Civ.P. 12(b)(1) is a request for the court to dismiss a claim for lack of subject matter jurisdiction. Fed.R.Civ.P. 12(b)(1). A plaintiff bears the burden of establishing that the Court has jurisdiction. Basso v. Utah Power & Light Co., 495 F.2d 906, 909 (10th Cir. 1974). When the court lacks subject matter jurisdiction over a claim for relief, dismissal is proper under Rule 12(b)(1). See Jackson v. City and Cty. of Denver, No. 11-cv-02293-PAB-KLM, 2012 WL 4355556 at *1 (D. Colo. Sept. 24, 2012).

         Rule 12(b)(1) challenges are generally presented in one of two forms: “[t]he moving party may (1) facially attack the complaint's allegations as to the existence of subject matter jurisdiction, or (2) go beyond allegations contained in the complaint by presenting evidence to challenge the factual basis upon which subject matter jurisdiction rests.” Merrill Lynch Bus. Fin. Servs., Inc. v. Nudell, 363 F.3d 1072, 1074 (10th Cir. 2004) (quoting Maestas v. Lujan, 351 F.3d 1001, 1013 (10th Cir. 2003)). The court may review materials outside the pleadings ...

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