Surowiec v. Capital Title Agency, Inc.

790 F. Supp. 2d 997 (2011)

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Nature of the Case

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Facts

Surowiec (P) purchased a condominium unit from Shamrock Glen, LLC. Scott Romley, an employee with Capital Title Agency, Inc. (D), served as escrow agent for the transaction. P purchased his condominium unit as a short-term investment paying $137,000. P expected to receive a marketable title free and clear of all liens and would not have bought the property if he had known that it remained encumbered with liens. Unencumbered units in the Shamrock Glen development sold for more than $130,000. P's unit remained subject to liens and was appraised at $31,000. P claims that Romley failed to disclose before closing that the property would remain encumbered by deeds of trusts held by certain investors in the Shamrock Glen development. P claims that those junior liens and related foreclosure actions brought by the investors have prevented him from selling the condominium, resulting in financial loss. P sued Ds in November 2009. P asserted claims for breach of contract, breach of fiduciary duty, fraud, negligent misrepresentation, negligence, and breach of the implied covenant of good faith and fair dealing. Phelps, D's in-house counsel, learned of the potential litigation when Shamrock’s attorney sent him a letter detailing owners’ inquiries about outstanding liens on their properties. Phelps reviewed the matter but failed to advise his clients to preserve evidence or to implement a document retention policy. It was revealed in discovery that D had destroyed documents relevant to the case by its failure to suspend routine document destructions policies. P filed a motion for default judgment or an adverse jury instruction.