Fidelity National Title Insurance Co. v. Bernstein (Lawyers Weekly No. 002-006-12, 5 pp.) (Joseph F. Anderson Jr., J.) 3:11-cv-01848; D.S.C.
Holding: According to the plaintiff-title insurer, the defendant-attorney negligently failed to have a prior $200,000 mortgage cancelled or released as part of a real estate closing; later, the bank foreclosed, and the title insurer had to pay $200,000 to satisfy the prior mortgage. Although the foreclosing bank still has the mortgaged properties and could sell them, the attorney has failed to show that the title insurer has not incurred enough damages to allow this court to exercise diversity jurisdiction.
Contrary to the attorney’s argument, the insurer contends that (1) it is not entitled to a set-off when the bank sells the property and (2) any sale would not likely yield enough proceeds to satisfy both the foreclosing bank’s lien and the prior $200,000 mortgage.
The attorney’s motion to dismiss is denied. The attorney’s motion to stay these proceedings until the bank sells the properties is also denied.
Given the current economic environment, a sale may not be feasible for quite some time, and this action would linger indefinitely. Moreover, the bank should be free to sell the lots at its discretion when it sees fit.