Filed: Dec. 23, 2010
Latest Update: Feb. 22, 2020
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 09-2301 JOHN C. BENNISON, Plaintiff - Appellant, v. WESTERN SURETY COMPANY, Defendant - Appellee. Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. Leonie M. Brinkema, District Judge. (1:09-cv-00891-LMB-IDD) Argued: October 26, 2010 Decided: December 23, 2010 Before TRAXLER, Chief Judge, GREGORY, Circuit Judge, and HAMILTON, Senior Circuit Judge. Affirmed by unpublished per curia
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 09-2301 JOHN C. BENNISON, Plaintiff - Appellant, v. WESTERN SURETY COMPANY, Defendant - Appellee. Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. Leonie M. Brinkema, District Judge. (1:09-cv-00891-LMB-IDD) Argued: October 26, 2010 Decided: December 23, 2010 Before TRAXLER, Chief Judge, GREGORY, Circuit Judge, and HAMILTON, Senior Circuit Judge. Affirmed by unpublished per curiam..
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 09-2301
JOHN C. BENNISON,
Plaintiff - Appellant,
v.
WESTERN SURETY COMPANY,
Defendant - Appellee.
Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. Leonie M. Brinkema,
District Judge. (1:09-cv-00891-LMB-IDD)
Argued: October 26, 2010 Decided: December 23, 2010
Before TRAXLER, Chief Judge, GREGORY, Circuit Judge, and
HAMILTON, Senior Circuit Judge.
Affirmed by unpublished per curiam opinion.
ARGUED: Burton Jay Rubin, BURTON JAY RUBIN, ATTORNEY AT LAW,
Burke, Virginia, for Appellant. Gregory T. Lawrence, CONTI,
FENN & LAWRENCE, LLC, Baltimore, Maryland, for Appellee. ON
BRIEF: Anthony M. Conti, CONTI, FENN & LAWRENCE, LLC, Baltimore,
Maryland, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
John Bennison (Bennison) brought this declaratory judgment
action against Western Surety Company (Western Surety) seeking a
declaration that Western Surety was liable under a surety bond
(the Surety Bond) it issued to Jaehyung Kim, Esquire, of the Law
Office of Jaehyung Kim, LLC d/b/a First Title & Escrow (First
Title). The district court granted Western Surety’s motion to
dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure, and Bennison appeals. We affirm.
This case has its genesis from a real estate transaction
involving the purchase of a home at 7214 Poplar Street,
Annandale, Virginia (the Poplar Street Property). To purchase
the home, the purchasers obtained financing from two sources.
First, the purchasers borrowed $600,000 from Burke and Herbert
Bank & Trust Company (Burke and Herbert). Next, the purchasers
secured $120,000 in financing (the Loan) from G.W. Investments,
Inc. (G.W. Investments). G.W. Investments’ lien on the Poplar
Street Property was subordinate to Burke and Herbert’s lien. 1
The settlement agent for the transaction was First Title,
who also acted as an agent for Chicago Title Insurance Company
1
Bennison was an “individual investor who placed funds with
. . . G.W. Investments” for the purpose of obtaining an interest
in the Loan. (J.A. 6). By assignment, Bennison acquired from
G.W. Investments all of its rights under the Loan.
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(Chicago Title). On October 6, 2006, G.W. Investments sent
closing instructions for the Loan to First Title via facsimile.
As part of its closing instructions, G.W. Investments directed
First Title to secure a commitment for title insurance on not
only the Poplar Street Property, but also on another property
owned by the purchasers, namely, a home located at 10957 Adare
Drive, Fairfax, Virginia (the Adare Drive Property).
On October 9, 2006, First Title faxed to G.W. Investments a
standard commitment for title insurance (the Chicago Title
Commitment). The Chicago Title Commitment provided that a
standard title insurance policy was to be issued covering the
property described in “Exhibit A.” (J.A. 52). The Chicago
Title Commitment contained two Exhibit As, one identified the
Poplar Street Property, the other identified the Adare Drive
Property.
On October 12, 2006, the purchasers closed on the Poplar
Street Property. At the closing, G.W. Investments released the
$120,000, the Poplar Street Property was transferred, and
Chicago Title was paid $338 for title insurance pursuant to the
Chicago Title Commitment. 2
2
The Loan was secured by a blanket deed of trust on both
the Poplar Street Property and the Adare Drive Property.
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On November 28, 2006, Chicago Title issued a standard title
insurance policy to G.W. Investments. Unlike the Chicago Title
Commitment, the standard title insurance policy issued to G.W.
Investments did not include the Adare Drive Property.
In or about July 2007, the purchasers defaulted on all of
their mortgages on both the Poplar Street Property and the Adare
Drive Property. Both the Poplar Street Property and the Adare
Drive Property were sold at foreclosure in or about February
2008. Partly because of a prior lien on the Adare Drive
Property, no surplus was available to pay the balance due on the
Loan.
On October 6, 2008, Bennison filed a complaint against
Chicago Title in the United States District Court for the
Eastern District of Virginia. In this lawsuit, Bennison
represented that title insurance was obtained on the both the
Poplar Street Property and the Adare Drive Property. Bennison
settled his lawsuit against Chicago Title for approximately
$37,000.
While the case against Chicago Title was pending, Bennison
made a claim on the Surety Bond issued by Western Surety to
First Title. The Surety Bond provided that it was null and void
if First Title acted in full compliance with the laws of the
Commonwealth of Virginia and rules, regulations, and orders
prescribed by the Virginia State Bar pertaining to settlement
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agents. Western Surety denied the claim, and Bennison brought
this declaratory judgment action in the United States District
Court for the Eastern District of Virginia. In direct
contradiction to his position in the Chicago Title action,
Bennison alleged that no commitment for title insurance, and,
therefore, no title insurance was obtained on the Adare Drive
Property.
In Virginia, a real estate settlement agent is required to
purchase a surety bond. Va. Code. Ann. § 55-525.20(B)(3). All
funds deposited with the settlement agent must be handled in a
fiduciary capacity, and such funds must be applied only in
accordance with the terms of the individual instructions or
agreements under which the funds were accepted. Id. § 55-
525.24(A)(2). Bennison alleged in the district court that First
Title violated § 55-525.24(A)(2) by not disbursing the
settlement funds in accordance with the closing instructions.
According to Bennison, First Title did not comply with the
closing instructions because it failed to secure a commitment
for title insurance on the Adare Drive Property.
Western Surety moved for dismissal of the complaint
pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure. The district court held a hearing on the motion,
and, at the conclusion of the hearing, the district court
granted the motion. According to the district court, the
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“commitment . . . is clear on its face that Chicago Title was
going to provide title [insurance] for the two properties.”
(J.A. 128). Bennison noted a timely appeal.
On appeal, Bennison argues that the district court erred
when it granted Western Surety’s motion to dismiss. Bennison
alleges that he pled sufficient facts to demonstrate that
Western Surety was liable under the Surety Bond because First
Title did not disperse the settlement funds in accordance with
G.W. Investment’s closing instructions. More specifically,
Bennison alleges that First Title never obtained a commitment
for title insurance on the Adare Drive Property in direct
contravention to such instructions.
The parties agree that Western Surety is only liable under
the Surety Bond if First Title disbursed the settlement funds in
contravention to G.W. Investment’s closing instructions. Here,
the closing instructions, among other things, directed First
Title to secure a commitment for title insurance on not only the
Poplar Street Property, but also on the Adare Drive Property.
First Title did just that. First Title faxed to G.W.
Investments the Chicago Title Commitment, which provided that a
standard title insurance policy was to be issued covering the
property described in “Exhibit A.” (J.A. 52). The Chicago
Title Commitment contains two Exhibit As, one identifying the
Poplar Street Property, the other identifying the Adare Drive
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Property. As the district court noted, the listing of both of
these properties in the Exhibit As secured a commitment for
title insurance on both of these properties.
Bennison argues that First Title disbursed the settlement
funds in contravention to G.W. Investment’s closing
instructions, because: (1) the Exhibit A covering the Adare
Drive Property was “extraneous” to the Chicago Title Commitment,
Appellant’s Reply Br. at 4, and (2) the deposition testimony of
an employee of First Title taken during Bennison’s action
against Chicago Title demonstrates that no commitment for title
insurance was obtained on the Adare Drive Property. Neither of
these arguments has merit. The Exhibit A covering the Adare
Drive Property was not extraneous to the Chicago Title
Commitment--it was part of it, as evidenced by the facts that
the Exhibit As were sent in First Title’s facsimile to G.W.
Investments and that the two Exhibits As followed sequentially
in the facsimile. With regard to the deposition testimony, at
most, the First Title employee was not sure whether a commitment
for title insurance was obtained on the Adare Drive Property.
Such vague and inconclusive testimony is of no help to Bennison.
Accordingly, the judgment of the district court is affirmed.
AFFIRMED
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