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Commonwealth Land Title Insurance Co. v. KCI Technologies, Inc.

United States District Court, District of Columbia

March 13, 2018

COMMONWEALTH LAND TITLE INSURANCE COMPANY, Plaintiff,
v.
KCI TECHNOLOGIES, INC. et al., Defendants.

          MEMORANDUM OPINION

          TREVOR N. MCFADDEN UNITED STATES DISTRICT JUDGE.

         Plaintiff Commonwealth Land Title Insurance Company (“Commonwealth”), a title insurance company, seeks judgment against defendants KCI Technologies, Inc. (“KCI”) and Wiles Mensch Corp. (“WMC”), both of which conducted surveys of a particular plot of land in Washington, D.C. under service contracts with land developer Infrastructure Capital Group, LLC or its affiliate ICG 16th Street Associates, LLC (collectively “ICG” or “Insured”). Commonwealth alleges that, because both surveyors were negligent in conducting the land surveys upon which it relied in issuing title insurance policies to ICG, the Defendants are liable for the payout it made under ICG's title claim seeking reimbursement for additional costs incurred as a result of the inaccurate surveys. The Defendants have filed separate motions to dismiss for failure to state a claim. As jurisdiction and venue is proper in this Court, [1] and upon consideration of the pleadings, relevant law, related legal memoranda in opposition and in support, and the entire record therein, I find that the statute of limitations has run on the Plaintiff's claims. Accordingly, the Defendants' motions will be granted, and the Complaint will be dismissed with prejudice.

         I. BACKGROUND

         At issue in this case are four different land surveys conducted on the same plot of land between 2006 and 2014; two of which were conducted by KCI and two of which were conducted by WMC. In 2006, ICG purchased the land lot at 900 16th Street NW, Washington, D.C. for the purpose of constructing a new commercial office building. Compl. ¶¶ 4-7. ICG hired KCI to conduct and produce a land title survey. Id. ¶ 8; see also Id. Ex. A (“KCI Professional Services Agreement” dated June 22, 2006).[2] KCI's 2006 survey did not identify any encroachment on the land, and contained a “Surveyor's Certification” that stated the survey was made in accordance with the “Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys.” Id. Ex. B (“KCI 2006 Survey” signed April 10, 2007). Commonwealth alleges that it relied upon this survey to issue a title insurance policy to ICG (“2007 Title Policy”). Id. ¶ 13.

         In December 2012, ICG hired WMC to conduct a Boundary, Topographic and Utility Survey (“WMC 2012 Survey”) which identified a party wall that encroached on the property by two to three inches. Id. ¶¶ 15-16. In May 2013, WMC re-conducted the same survey (“WMC 2013 Survey”) and stated to ICG that the encroachment was four inches. Id. ¶ 19. ICG subsequently again commissioned KCI to conduct an ALTA/ACSM Land Title Survey, which was issued in February 2014 (“KCI 2014 Survey”) and identified no encroachment. See Id. ¶ 21; Compl. ¶¶ 77-79. The survey included a certification similar to the one made in the KCI 2006 survey. See Id. ¶ 22; see also Id. Ex. H. Commonwealth alleges that it relied upon the KCI 2014 Survey to issue a title insurance policy to ICG (“2014 Title Policy”). Id. ¶ 24.

         On March 24, 2014, the architectural and construction company hired by ICG reported to ICG that the encroachment was actually 12 inches. Id. ¶ 27. In order to construct the building as intended, ICG decided to demolish the encroachment, incurring $2, 666, 379 in demolition costs and payment of a partial delay penalty to the building's main tenant. Id. ¶¶ 28, 36. On September 17, 2014 and November 17, 2014, ICG tendered claims on the 2007 and 2014 title policies, respectively, to Commonwealth, which accepted coverage and made a loss payment to ICG under the 2007 policy. Id. ¶¶ 31, 33-35; Mem. of P. & A. in Opp. to WMC's Mot. to Dismiss (“Opp. to WMC Mot. to Dismiss”) 2 n.1, ECF No. 13. Commonwealth claims that it incurred $1, 042, 025.31 due to the loss payment made to ICG and expenses. Id. ¶ 35.

         On March 23, 2017, Commonwealth brought suit against KCI and WMC, alleging seven causes of action. Certified Copy of Transfer Order and Docket Sheet (“Superior Court Docket Sheet”), ECF No. 10. Of the seven counts, one count is against WMC and six counts are against KCI. Compl. 7-12. As against WMC, Commonwealth alleges that, as the assignee of ICG's rights and claims, it is subrogated to all claims that ICG had against WMC (Count One). Id. ¶ 38. Commonwealth seeks to recover ICG's costs of $2, 666, 379 for WMC's breach of contract for failing to take notice of a 12 inch encroachment. Id. ¶ 41.

         As against KCI, Commonwealth alleges that KCI's 2006 survey, in failing to notice a 12 inch encroachment on the property, was conducted negligently (Count Two) and negligently represented the true state of the property (Count Three). Id. ¶¶ 43-55. Commonwealth seeks judgment against KCI for $1, 042, 025.31, the amount incurred by Commonwealth as a result of its insuring and paying out a title claim to ICG. Id. Commonwealth also alleges these same claims as pertaining to KCI's 2014 survey (Counts Five and Six) and seeks the same judgment. Id. ¶¶ 60-74. Last, Commonwealth alleges that it is subrogated to all claims that ICG has against KCI by virtue of ICG's assignment of its rights and claims to Commonwealth. Id. ¶¶ 57, 76. It makes breach of contract claims against KCI with respect to the 2006 and 2014 surveys (Counts Four and Seven, respectively). Id. ¶¶ 56-59, 75-80.

         KCI timely removed this matter to this Court; Not. of Removal, ECF No. 1; and both KCI and WMC have filed motions to dismiss for failure to state a claim upon which relief can be granted. Def KCI Technologies, Inc.'s Mot. to Dismiss (“KCI Mot. to Dismiss”), ECF No. 7; Def Wiles Mensch Corp.'s Mot. to Dismiss (“WMC Mot. to Dismiss”), ECF No. 5; see also Def. KCI Technologies, Inc.'s Supp./Revised Mot. to Dismiss (“KCI Supp. Mot. to Dismiss”), ECF No. 19.[3]

         II. LEGAL STANDARD

         A party may move to dismiss a complaint on the ground that it “fail[s] to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). A complaint must contain sufficient factual allegations that, if true, “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). In evaluating a motion to dismiss pursuant to Rule 12(b)(6), the Court must construe the complaint in the light most favorable to the plaintiff and accept as true all reasonable factual inferences drawn from well-pled factual allegations. See In re United Mine Workers of Am. Emp. Benefit Plans Litig., 854 F.Supp. 914, 915 (D.D.C. 1994). In addition, “[i]n determining whether a complaint fails to state a claim, [the court] may consider only the 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.” Hurd v. District of Columbia Gov't, 864 F.3d 671, 678 (D.C. Cir. 2017) (quoting EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d 621, 624 (D.C. Cir. 1997)).

         III. ANALYSIS

         KCI and WMC each argue that Commonwealth's causes of action are time-barred under D.C. law by the three-year statute of limitations, and the Plaintiff does not dispute that this is the applicable statute of limitations. WMC Mot. to Dismiss. 8; Opp. to WMC Mot. to Dismiss 5; KCI's Reply to Pl.'s Opp. to Mot. to Dismiss 2, ECF No. 18; KCI Supp. Mot. to Dismiss ¶ 6; Opp. to KCI Supp. Mot. to Dismiss 4; see also D.C. Code Ann. § 12-301(7)-(8). Because I find that Commonwealth did not bring suit until after the statute of limitations had run, and that D.C.'s “discovery rule” is inapplicable to the circumstances as alleged, Commonwealth's claims are time-barred.

         A. The Statute of ...


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