United States District Court, S.D. New York
MORRIS BUILDERS, L.P. a/k/a MORRIS INDUSTRIAL BUILDERS, L.P., Plaintiff,
FIDELITY NATIONAL TITLE INSURANCE COMPANY, FIRST AMERICAN TITLE INSURANCE COMPANY, and COMMONWEALTH LAND TITLE INSURANCE COMPANY, Defendants.
OPINION AND ORDER
Vincent L. Briccetti United States District Judge
Morris Builders, L.P. a/k/a Morris Industrial Builders, L.P.,
brings this action against defendants Fidelity National Title
Insurance Company (“Fidelity”), First American
Title Insurance Company (“First American”), and
Commonwealth Land Title Insurance Company
(“Commonwealth”), asserting claims for
declaratory relief and breach of contract.
pending is plaintiff's motion for leave to amend the
complaint and to add a new party plaintiff, pursuant to Rules
15(a)(2) and 21. (Doc. #23).
following reasons, the motion is GRANTED.
Court has subject matter jurisdiction pursuant to 28 U.S.C.
purpose of deciding the pending motion, the Court accepts as
true all well pleaded factual allegations in the proposed
amended complaint, as summarized below.
is a real estate development company that recently became the
owner of a parcel of land located on Austin Avenue in
Yonkers, New York (the “Austin Avenue site”).
Fidelity, First American, and Commonwealth are insurance
companies that issue title insurance policies.
1985, plaintiff along with the County of Westchester (the
“County”), the City of Yonkers
(“Yonkers”), the County of Westchester Industrial
Development Agency (“WIDA”), and the City of
Yonkers Industrial Development Agency (“YIDA”),
entered into a five-party agreement (the “five-party
agreement”), which (i) “acknowledged” that
the County owned twenty-five acres of the Austin Avenue site,
and (ii) provided that WIDA would lease the entire Austin
Avenue site to plaintiff under a long-term development lease.
(Proposed Am. Compl. ¶ 11). Simultaneously, WIDA and
plaintiff executed the lease agreement for the Austin Avenue
site, which was subsequently amended on June 18, 2017.
1989, defendants issued to plaintiff title insurance
policies covering the long-term development lease.
2011, plaintiff discovered what it considers a title
defect-namely that portions of the Austin Avenue site covered
by the five-party agreement, leased to plaintiff, and insured
by defendants, were actually dedicated public parkland owned
by Yonkers. On September 26, 2011, plaintiff put defendants
on notice of the title defect, indicating plaintiff would
file an action to quiet title, and requesting indemnification
for costs associated with that action. Defendants responded
that they would take “curative measures.”
(Proposed Am. Compl. ¶ 27).
August 15, 2012, plaintiff entered into a sublease agreement
with Target Corporation (“Target”) as tenant to
develop a Target retail store (the “Target
sublease”). Under the Target sublease, plaintiff agreed
to lease to Target a portion of the land plaintiff leased
parcel of land (“Lot 4”) contained the previously
discovered title defect that was insured by defendants and
from which plaintiff had been evicted because of the title
March 18, 2014, plaintiff commenced a federal action (the
“prior action”) against the County, WIDA,
Yonkers, and YIDA for, inter alia, breach of
contract and to quiet title. On June 21, 2016, the parties
entered a settlement agreement. Pursuant to that settlement,
on June 30, 2016, plaintiff purchased the Austin Avenue site
in fee simple through a corrective deed with Yonkers.
same day it purchased the Austin Avenue site, plaintiff
assigned the Target sublease to Morris Westchester Retail
Associates, LLC (“MWR”), plaintiff's
“subsidiary/affiliate” (Proposed Am. Compl.
¶ 45), and transferred to MWR the title to Lot 4.
Plaintiff alleges MWR was created for the purpose of holding
the lease to Lot 4 and acting as landlord to Target.
January 3, 2017, after this action was commenced, Target
notified plaintiff and MWR that it would terminate the Target
sublease. On January 30, plaintiff paid a $250, 000 break-up
fee to Target on behalf of MWR. Target terminated the Target
sublease on April 12. Plaintiff alleges Target terminated the
Target sublease “because of the title defects, the
failure of Defendants to cure, ...