United States District Court, District of Columbia
MEMORANDUM OPINION & ORDER
D.BATES United States District Judge.
purposes of this opinion, the following factual allegations
are accepted as true. In 2005, plaintiff Stewart Title
Guaranty Company and defendant Independent Settlement
Services entered an agreement under which Independent was
authorized to issue title insurance policies underwritten by
Stewart Title. Am. Compl. [ECF No. 10] ¶6. In 2007,
defendant Jimmy Lewis decided to refinance a property that he
owned in Washington, D.C. Id. ¶9. The $262, 500
loan was secured by a deed of trust granting a lien against
his property. Id. ¶ 10. And Independent, the
settlement agent for the transaction, issued a title
insurance commitment for the deed, underwritten by Stewart
Title. See id. ¶¶ 9-11. In May 2013, Lewis
sold the property for $399, 500, after representing to the
buyer that it was free and clear from any liens. Id.
¶¶20, 24. Lewis did not pay off his loan from the
proceeds of the sale and, shortly after the sale had been
consummated, he stopped making any payments at all.
Id. ¶¶ 21, 25.
the then-holder of the loan note attempted to foreclose
against the property, it discovered that the deed securing
the note had never been recorded. Id. ¶ 26.
Thus stymied in its attempts to collect, the note-holder
submitted a claim to Stewart Title in its role as title
insurer. Id. While Stewart Title processed the
claim, the note was transferred once more to Nationstar
Mortgage. Id. Ultimately, Stewart Title settled the
claim by paying Nationstar $262, 500 in exchange for all
claims and rights arising under the note. Id. ¶
30. Stewart Title now brings this action in an attempt to
recover its losses. Stewart Title's initial complaint
alleged claims for breach of contract and negligence against
Independent and a claim for breach of contract against Lewis.
See Compl. [ECF No. 1]. Independent moved to dismiss
only the contract claim against it, arguing that Stewart
Title had failed to identify a specific contractual
obligation that Independent had breached. See
Def's 1st Mot. to Dismiss [ECF No. 8] at 3. In response,
Stewart Title filed an amended complaint including additional
allegations and attaching the 2005 Underwriting Agreement
that it now seeks to enforce. See Am. Compl.;
Underwriting Agreement [ECF No. 10-2]. Still not satisfied,
Independent has renewed its motion to dismiss the contract
claim. See Def's 2d Mot. to Dismiss [ECF No.
12-1]. That motion has now been fully briefed and is ripe for
decision. For the reasons below, it will be denied.
considering a motion to dismiss under Federal Rule of Civil
Procedure 12(b)(6), a court must presume the truth of a
complaint's factual allegations, though it is "not
bound to accept as true a legal conclusion couched as a
factual allegation." Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007) (internal quotation
marks omitted). The court then asks whether the facts alleged
suffice "to state a claim to relief that is plausible on
its face." Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (internal quotation marks omitted). On a motion to
dismiss, the court considers "facts alleged in the
complaint, any documents either attached to or incorporated
in the complaint and matters of which [the court] may take
judicial notice." Mpoy v. Rhee, 758 F.3d 285,
291 n. 1 (D.C. Cir. 2014) (internal quotation marks omitted).
Because the Underwriting Agreement was attached to Stewart
Title's amended complaint and forms the basis of its
claim, it will be considered in connection with
Independent's motion to dismiss.
parties assume that D.C. law applies to Stewart Title's
breach of contract claim. To state a claim for breach of
contract under D.C. law, Stewart Title must describe the
terms of its contract with Independent and the nature of
Independent's alleged breach. See Francis v.
Rehman, 110 A.3d 615, 620 (D.C. 2015). As is the case
here, allegations that a contract has been breached often
raise issues of contract interpretation. "Where the
language in question is unambiguous, its interpretation is a
question of law for the court." Fort Lincoln Civic
Ass'n, Inc. v. Fort Lincoln New Town Corp., 944 A.2d
1055, 1064 (D.C. 2008) (internal quotation marks omitted). On
the other hand, where the relevant contractual language is
ambiguous, "[t]he choice among reasonable
interpretations ... is for the fact-finder to make based on
the evidence presented by the parties to support their
respective interpretations." Nextel Spectrum
Acquisition Corp. v. Hispanic Info. & Telecomm. Network,
Inc., 571 F.Supp.2d 59, 63 (D.D.C. 2008) (citing
Howard Univ. v. Best, 484 A.2d 958, 966 (D.C.
amended complaint, Stewart Title identifies a number of
contractual duties owed by Independent under the Underwriting
Agreement. See Am. Compl. ¶7. First, Stewart
Title contends, Independent was required to "conduct its
business in a sound and ethical manner" and to issue
title policies "according to recognized underwriting
practices, the rules and instructions given by [Stewart
Title], and those rules and instructions imposed by the
Department of Insurance or other regulatory body."
Underwriting Agreement ¶3(a). Second, Stewart Title
continues, Independent was obligated to reimburse Stewart
Title for losses that it incurred "due to the
negligence" of Independent. Id. ¶ 5(a).
Title has pled sufficient factual allegations, taken as true,
to support a plausible claim that Independent has breached
its duties under the contract. Consider Independent's
duty to conduct its business in a "sound manner"
and "according to recognized underwriting
practices." Id. ¶ 3(a). Stewart Title
alleges that Independent breached this duty by
"[f]ailing to record and apparently losing" the
deed of trust executed in connection with the refinancing of
Lewis' property. Am. Compl. ¶ 37; see also
id ¶ 16. According to Stewart Title, "[t]he
standard, recognized practice in the title industry is to
record instruments promptly after closing is conducted."
Id. ¶ 14. To buttress that allegation, Stewart
Title further alleges that Independent received funds at
closing to register the deed, id. ¶ 13, and
that Stewart Title's own guidelines require a deed to be
recorded promptly after closing, id. ¶ 15. At
this early stage, these allegations suffice to state a claim
for breach of contract: if industry standards required
Independent to register the deed promptly after closing, and
Independent failed to do so, then it may have failed to
conduct its business in a "sound manner" and
"according to recognized underwriting principles."
disagrees, challenging Stewart Title to point to a provision
of the Underwriting Agreement that specifically and
unambiguously required Independent to record the deed of
trust. See Defi's 2d Mot. to Dismiss at 3-4; Def's
Reply [ECF No. 15] at 2. But that is not Stewart Title's
burden. To survive Independent's motion to dismiss, it
need only allege conduct by Independent that would be
prohibited by a reasonable construction of the Underwriting
Agreement. Because Stewart Title has done so,
Independent's argument fails.
Title has also adequately alleged a breach of the
Underwriting Agreement's "Division of Loss"
provision. Under that provision, Independent "shall be
liable" to Stewart Title for losses caused "due to
[Independent's] negligence." Underwriting Agreement
¶ 5(a). Stewart Title has brought a separate count for
negligence, based again on its allegation that Independent
failed to record and then lost the deed of trust.
See Am. Compl. ¶ 44. When Independent failed to
reimburse Stewart Title for losses resulting from that
negligence, Stewart Title contends, Independent also breached
the Underwriting Agreement. Id. ¶ 39.
Independent, for its part, concedes that Stewart Title has
successfully "pled a cause of action for
negligence." Def's Reply at 1 & n.1.
Nonetheless, Independent argues that Stewart Title's
associated contract claim must fail because Independent's
alleged failure to record the deed does not violate any
express provision of the Underwriting Agreement. See
Id. at 3-4.
that argument, which has already been rejected, is irrelevant
for present purposes. In its papers Independent fails even to
cite the "Division of Loss" provision at issue,
which appears to make Independent liable to Stewart Title for
losses caused by Independent's (adequately alleged)
negligence. Nor can Independent dismiss Stewart Title's
breach of contract claim on the general ground that
"duties derived from contract are separate and distinct
from common law tort duties." Def 's Reply at 3. As
a general matter, of course, Independent is correct. But the
specific contract at issue here appears to tie those duties
together: when Independent violates its tort duties, it has
an associated contractual obligation to reimburse Stewart
Title for losses incurred as a result. The Court may enforce
such contracts. See Gen. Elevator Co., Inc. v. District
of Columbia, 481 A.2d 116, 118 (D.C. 1984) (noting that
party needed to "establish appellant's
negligence" in order to establish "appellant's
liability under the indemnity contract"). Stewart Title
alleges that it suffered losses as a result of
Independent's negligence, and that Independent failed to
reimburse it for those losses. At this point, that will
suffice to state a claim for breach of
foregoing reasons, it is hereby ORDERED that 
Independent's partial motion to dismiss is DENIED. A
separate Order setting an initial ...