The purchaser of property in Hawaii who had to fight to gain possession of his property after discovering a couple occupying the house sought reimbursement of the cost to defend the suit from the title company, which refused to defend the owner in the matter.
The case is Richard Goodin Sr. v. Fidelity National Title Insurance Co. (U.S. District Court for the Middle District of Florida, No. 3:11-cv-149-J-32JRK).
In 2005, Richard Goodin purchased title insurance from Fidelity National Title Insurance Co. for a house he had recently bought in Hawaii. When Goodin tried to gain actual possession of his new house, he found it occupied by a couple, the Wrights. An action to determine ownership ensued, and though Goodin appealed to Fidelity to defend him in the suit, Fidelity refused. Goodin retained and lost counsel twice before proceeding with the property action pro se. Ultimately, the circuit court in Hawaii found that Goodin was a bona fide purchaser and was therefore entitled to actual possession and rent from the Wrights for the period the Wrights occupied the property.
After his success in circuit court, Goodin filed a complaint against Fidelity and several other defendants in federal court in Hawaii alleging legal malpractice, breach of contract, legal fraud and conspiracy to commit fraud, all arising from the events surrounding the preceding property action. The court granted summary judgment in favor of all defendants except Fidelity. In a later judgment, the court dismissed without prejudice Goodin’s breach of contract claim against Fidelity, finding that the court lacked jurisdiction because Goodin had failed to properly allege the $75,000 amount in controversy required for several diversity jurisdicition.
Goodin then brought the current suit against Fidelity alone and alleged that Fidelity breached its obligation under the title policy in bad faith by failing to defend Godin in the state circuit court property action. Also, Goodin again alleged legal malpractice, conspiracy to commit fraud, fraud and legal fraud, but this time he asserted these torts only against Fidelity, arguing that Fidelity is ultimately responsible for the alleged misdeeds of the defendants against whom GOodin previously brought suit in federal court in Hawaii.
Fidelity moved to dismiss Goodin’s complaint because Goodin’s clains are barred by res judicata; Goodin failed to allege facts on which relief may be granted; and Goodin has once again failed to meet the amount in controversy on which relief may be granted
The court dismissed Goodin’s suit against Fidelity for lack of subject matter jurisdiction.
The court noted that Goodin demanded $20 million in general and punitive damages.
“However, Goodin did not lose his house to the Wrights, nor has Goodin alleged that any misconduct has occurred between his previous suit and now,” the court stated. “Indeed, Goodin’s complaint lists no other specific cliam as to his losses due to Fidelity’s alleged misconduct. Therefore, his out-of-pocket losses are presumably the same as they were in Hawaii: $34,705.40. Consequently, Fidelity argues that Goodin has once again failed to allege the proper amount in controversy. IN response, Goodin argues only that he has met the required $75,000 amount because his policy with Fidelity is worth up to $125,000. Because Goodin is pro se and pro se pleadings are held to a less stringent standard than pleadings drafted by attorneys and will, therefore, be liberally construed, the court will also address Goodin’s demand for punitive damages and injuries alleged in the complaint.
The court found Goodin’s argument that his policy limit with Fidelity can serve to satisfy the amount in controversy is misguided. It noted that many courts have held that it is the value of the claim at issue, not the value of the policy limit that is considered for purposes of determining the amount in controversy. It said that Goodin does not seek the value of the title insured by Fidelity, but rather seeks damages that resulted from Fidelity’s failure to defend him in his suit against the Wrights. It said it is improper to consider the face value of the policy as the amount in controversy. The court said Goodin’s argument was actually limited to his emand for $20 million.
“From the record before the court, it appears to a legal certainty that Goodin cannot recover the amount necessary to satisfy the jurisdictional threshold,” the court stated. “Even assuming arguendo that any of his non-contract claims would support a claim for mental distress damages, his allegations of mental anguish and stress are impermissibly vague. Moreover, the court is skeptical of any claim alleging that jurisdiction exists when that claim depends primarily upon the accrual of intangible damages. Goodin actually won his property action and he has not alleged any specific injury related to stress which would allow the court to conclude that non-economic damages should be counted on to establish the amount in controversy; nor has he identified any financial costs.
“Additionally, Goodin’s claim that a notice of pendency action (NOPA) filed by a third party stripped him of his opportunity to sell his home was resolved in Hawaii,” the court continued. “There, the court found that Goodin presented no facts showing that the third party intended to injure Goodin, or that the NOPA caused any harm to Goodin. Further, the court observed that the Wrights had filed a NOPA nearly four months before the third party filed its NOPA. Therefore, the court noted, even if the NOPA at issue would restrict Goodin’s ability to warrant marketable title, the first NOPA already provided the same limitations. Here, Goodin alleges no additional fact which could lead the court to a different conclusion. Indeed, Goodin even attaches the Hawaii District Court’s order to the complaint, thereby incorporating it into the allegations already set forth.”