Stewart Title Guaranty Co. v. Kelly

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19-P-41 Appeals Court

STEWART TITLE GUARANTY COMPANY vs. SHANE M. KELLY.

No. 19-P-41.

Suffolk. November 14, 2019. - April 17, 2020.

Present: Kinder, Neyman, & Wendlandt, JJ.

Insurance, Title insurance, Subrogation. Subrogation. Real
Property, Mortgage, Title insurance. Mortgage, Discharge.
Contract, Insurance, Parties, Performance and breach,
Unjust enrichment. Unjust Enrichment. Practice, Civil,
Burden of proof, Summary judgment.

Civil action commenced in the Superior Court Department on
July 28, 2016.

The case was heard by Elizabeth M. Fahey, J., on motions
for summary judgment, and a motion for reconsideration was
considered by her.

Beth R. Levenson (Scott J. Clifford also present) for the
plaintiff.
Shane M. Kelly, pro se, submitted a brief.

WENDLANDT, J. This action presents occasion to address the

doctrine of subrogation in the context of a title insurance

policy, as well as the requirement of Mass. R. Civ. P. 56, 365
2

Mass. 824 (1974), that a party with the burden of proof on an

issue at trial come forward with evidence supporting the

essential elements of its claims. The plaintiff, Stewart Title

Guaranty Company (Stewart Title), a title insurance company,

brought the present action in Superior Court for breach of

contract and unjust enrichment. It sought to recover monies it

paid to discharge a first priority mortgage on real property in

the Allston section of Boston (property) owned by the defendant,

Shane M. Kelly. Stewart Title claimed that, pursuant to a title

insurance policy it held with JPMorgan Chase Bank, N.A.

(JPMorgan), the mortgagee on a second mortgage on the property,

Stewart Title was subrogated to JPMorgan's right to pursue a

claim against Kelly for breach of a provision of the second

mortgage. That provision essentially required Kelly to

discharge the first priority mortgage upon request by JPMorgan.

Kelly's defense principally relied on a theory that he had

no contractual relationship with Stewart Title, specifically

disputing Stewart Title's subrogation rights. It is undisputed

that he was not aware, until the filing of the present action,

that Stewart Title had paid to discharge the first mortgage. On

cross motions for summary judgment, a Superior Court judge
3

granted summary judgment in favor of Kelly.1 The judge denied

Stewart Title's subsequent motion for reconsideration. We

affirm.

Background. We summarize the evidence in the light most

favorable to Stewart Title, the party against whom the judge

allowed summary judgment. See Lambert v. Fleet Nat'l Bank, 449

Mass. 119, 120 (2007).

In 2001, Kelly, who was in the business of renovating

homes, acquired title to the property. In 2003, Kelly borrowed

$322,500 from Chevy Chase Bank, F.S.B. (Chevy Chase) secured by

a mortgage (first mortgage) to Mortgage Electronic Registration

Systems (MERS), as nominee for Chevy Chase, on the property.

Attorney Roseann Conti conducted the closing. The first

mortgage was recorded with the Suffolk County registry of deeds,

resulting in a first priority lien on the property.

In 2007, Kelly granted another mortgage (second mortgage)

on the property. As set forth supra, the second mortgage was to

JPMorgan, securing a promissory note for the $382,500 loaned to

Kelly by JPMorgan.2 JPMorgan retained Conti to conduct the

1 Kelly moved for summary judgment on all claims; Stewart
Title moved for summary judgment as to only its claim for breach
of contract.

2 Kelly did not use the proceeds from the loan secured by
the second mortgage to pay off the first mortgage; and no
provision of the second mortgage expressly required him to do
4

closing; however, despite knowledge of the first mortgage, Conti

did not notify JPMorgan. The second mortgage also was recorded

with the Suffolk County registry of deeds.

In connection with the second mortgage transaction,

JPMorgan acquired a title insurance policy from Stewart Title.

Conti acted as Stewart Title's agent. Again, Conti failed to

provide notice of the first mortgage. Thereafter, Kelly

continued to make payments on both the first and second

mortgages.

In May 2012, JPMorgan filed a complaint in Land Court to

reform the second mortgage on the basis that, as a result of a

mutual mistake, Kelly's signature was not affixed to the second

mortgage. Kelly received notice of the action, but did not

respond or otherwise appear. In February 2013, a Land Court

judge ordered a default judgment in favor of JPMorgan, reforming

the second mortgage.3

Thereafter, JPMorgan learned of the first mortgage and, in

December 2013, made a written demand to Kelly that he discharge

so. As set forth at note 4, infra, however, Kelly was required
"promptly" to discharge any priority liens.

3 The Land Court judgment also provided:

"[N]othing in this Judgment shall extend to . . . title and
interest in the Property of any party holding a record
interest in the Property who . . . has not been named as a
party to this proceeding in this court . . . ."
5

it. Specifically, JPMorgan invoked a provision of the second

mortgage, allowing JPMorgan to identify a priority lien on the

property and, upon notice to Kelly, to require him to discharge

it within ten days.4 Kelly did not discharge the first mortgage.

In addition, Kelly stopped making monthly payments to JPMorgan;

however, he continued to make payments on the loan secured by

the first mortgage. Eventually, faced with economic pressure,

Kelly contacted the office of the Attorney General to assist him

to restructure the first and second mortgages.

Relevant to the present dispute, the second mortgage

provided that, if Kelly failed to discharge the first mortgage,

JPMorgan could itself elect to discharge the priority lien and

add the amount paid to Kelly's debt secured by the second

mortgage.5 The second mortgage also provided that, upon request

4 Section 4 of the second mortgage provided:

"[Kelly] shall promptly discharge any lien which has
priority over this Security Instrument . . . . If
[JPMorgan] determines that any part of the Property is
subject to a lien which can attain priority over this
Security Instrument, [JPMorgan] may give [Kelly] a notice
identifying the lien. Within 10 days of the date on which
that notice is given, [Kelly] shall satisfy the
lien . . . ."

Section 4 contained other cure provisions; however, Kelly did
not invoke them.

5 Section 9 of the second mortgage provided:

"If (a) [Kelly] fails to perform the covenants and
agreements contained in this Security Instrument . . . then
6

by JPMorgan, any amount so paid by JPMorgan "shall be payable."

The record contains no such request.

Meanwhile, in December 2015, apparently in response to a

claim by JPMorgan on the title insurance policy, Stewart Title

had $268,084.83 paid to Chevy Chase's successor in interest to

discharge the first mortgage held by MERS.6 Stewart Title did

not inform Kelly (or the Attorney General) that it had taken

this action. In December 2016, following a negotiated

restructuring by the Attorney General, Kelly entered into a new

mortgage agreement (third mortgage) with a principal balance of

$562,159.847 owed to JPMorgan.

[JPMorgan] may do and pay for whatever is reasonable or
appropriate to protect [JPMorgan's] interest in the
Property and rights under this Security Instrument . . . .
[JPMorgan's] actions can include, but are not limited to:
(a) paying any sums secured by a lien which has priority
over this Security Instrument . . . . Any amounts
disbursed by [JPMorgan] under this Section 9 shall become
additional debt of [Kelly] secured by this Security
Instrument. These amounts shall bear interest at the Note
rate from the date of disbursement and shall be payable,
with such interest, upon notice from [JPMorgan] to [Kelly]
requesting payment."

6 The summary judgment record does not include evidence of
payment by Stewart Title to either JPMorgan or Chevy Chase's
successor in interest. Instead, the record includes a check
issued by JPMorgan and payable to Chevy Chase's successor in
interest. The check was sent with a cover letter apparently
from Stewart Title. Accordingly, the record is unclear, at
best, as to whether Stewart Title paid to discharge the first
mortgage.

7 The record is devoid of an explanation for the increase in
the amount of principal from the second mortgage to the third
7

Following discharge of the first mortgage, Stewart Title

asserted an attorney malpractice claim against Conti, which

Stewart Title elected to settle for $131,683.27 –- an amount

less than the full amount paid to discharge the first mortgage.

As set forth supra, Conti had failed to disclose the existence

of the first mortgage; as a result, Stewart Title through its

agent, Conti, failed to disclose the first mortgage to JPMorgan,

JPMorgan did not learn of the first mortgage timely, and Stewart

Title did not exclude the first mortgage from the policy

coverage.8

Stewart Title filed the present action against Kelly,

seeking the difference between the payment made to discharge the

first mortgage and the sum recovered from Conti. Stewart Title

claimed that it was entitled to damages against Kelly because

(1) Kelly breached the second mortgage when he failed to

discharge the first mortgage, and as JPMorgan's title insurer,

Stewart Title had the right as subrogee to enforce the second

mortgage. It is not clear, for example, whether the amount
increased due to JPMorgan adding the amount paid to discharge
the first mortgage to Kelly's overall indebtedness pursuant to
section 9 of the second mortgage. See notes 5-6, supra.

8 "'[A] title insurance policy . . . is . . . an agreement
to indemnify the policyholder . . . against loss through defects
in title' . . . . Before issuing a policy, a title insurer
searches real property records for title defects and, if any are
discovered, excludes such known defects from the policy
coverage." GMAC Mtge., LLC v. First Am. Title Ins. Co., 464
Mass. 733, 739 (2013), quoting B. Burke, Law of Title Insurance
§ 2.01[A], at 2–5 (3d ed. Supp. 2012).
8

mortgage against Kelly; and (2) Stewart Title's payment to

discharge the first mortgage unjustly enriched Kelly. Stewart

Title and Kelly filed cross motions for summary judgment. The

judge allowed Kelly's motion and denied Stewart Title's motion.

Stewart Title filed a motion for reconsideration with an

accompanying affidavit averring, for the first time, that the

title insurance policy (on which Stewart Title exclusively had

relied in its summary judgment papers in support of its position

that it was JPMorgan's subrogee) was only a portion of a larger

title insurance policy between Stewart Title and JPMorgan.

Specifically, Stewart Title averred that the title insurance

policy that it had offered during the summary judgment stage was

missing a "jacket," which included an express subrogation

clause. The judge denied the motion.

Discussion. Our review of the judge's decision on summary

judgment is de novo. Pinti v. Emigrant Mtge. Co., 472 Mass.

226, 231 (2015). On appeal, we ask "whether, viewing the

evidence in the light most favorable to the nonmoving party, all

material facts have been established and the moving party is

entitled to a judgment as a matter of law." Augat, Inc. v.

Liberty Mut. Ins. Co., 410 Mass. 117, 120 (1991), citing Mass.

R. Civ. P. 56 (c), 365 Mass. 824 (1974). "[A] party moving for

summary judgment in a case in which the opposing party will have

the burden of proof at trial is entitled to summary judgment if
9

he demonstrates, by reference to material described in Mass. R.

Civ. P. 56 (c), unmet by countervailing materials, that the

party opposing the motion has no reasonable expectation of

proving an essential element of that party's case."

Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716

(1991).

1. Breach of contract. Stewart Title's claim for breach

of contract rested on its allegation that Kelly breached the

second mortgage when, in December 2013, he failed to discharge

the first mortgage. Because Stewart Title was not a party to

the second mortgage, an essential element of its claim was proof

of its status as JPMorgan's subrogee.

"Subrogation is an equitable adjustment of rights that

operates when a creditor or victim of loss is entitled to

recover from two sources, one of which bears a primary legal

responsibility. If the secondary source (the subrogee) pays the

obligation, it succeeds to the rights of the party it has paid

(the creditor or loss victim, called the subrogor) against the

third, primarily responsible party." Frost v. Porter Leasing

Corp., 386 Mass. 425, 426-427 (1982). The doctrine applies,

with certain limits, to policies of insurance such that, upon

payment to the insured, "the insurer is entitled to share the

benefit of any rights of recovery the insured may have against

[the primarily responsible party] for the same loss covered."
10

Id. at 427. "An insurer's right of subrogation may be reserved

in an [express] agreement between the insurer and the insured

. . . or may arise by implication." Id.

a. Express subrogation. Stewart Title's breach of

contract claim was based on its position that it was JPMorgan's

subrogee through an express agreement in its title insurance

policy with JPMorgan. Throughout the litigation, including in

its complaint and in its summary judgment papers, Stewart Title

exclusively relied on the title insurance document appended to

its complaint in support of its subrogee status. The judge,

examining this document, concluded that the policy did not have

an express subrogation clause. On appeal, Stewart Title does

not argue otherwise; indeed, our own review of the document

confirms the judge's conclusion.

Instead, Stewart Title contends that the judge's reliance

on its failure to come forward with an express subrogation

clause was error because it was not aware that its status as

subrogee was disputed. The record, however, reveals that

Stewart Title's position is untenable. Throughout the

litigation, Kelly's position was that he owed no contractual

obligation to Stewart Title because it was not subrogated to

JPMorgan's rights under the second mortgage as modified by the

Land Court judgment.
11

In his answer, Kelly expressly denied Stewart Title's

allegation that it was a subrogee to JPMorgan.9 The answer also

sets forth Kelly's position that Stewart Title "has no standing

to sue [Kelly] . . . because it was not a party to the contract

or a party to the Land Court judgment."

Continuing to assert this defense in his motion for summary

judgment, Kelly argued that Stewart Title could not enforce the

second mortgage because "there was no contractual relationship

between Stewart and Kelly," and it was not a party to the Land

Court judgment reforming the second mortgage. In other words,

Kelly made plain that he disputed Stewart Title's position that

it could enforce the second mortgage as subrogee of JPMorgan.10

Similarly, in his opposition to Stewart Title's cross

motion for summary judgment, Kelly (again) disputed that Stewart

Title was a subrogee with rights to enforce the second mortgage.

9 Kelly's affirmative defenses included: "[Stewart Title]
does not have any signed agreement with [Kelly] allowing it to
be first lien holder on the [property]. [Stewart Title] lacks
any contractual relationship with [Kelly]" (emphasis added); and
because Stewart Title was not a party to the Land Court
judgment, "it is prohibited from using the terms of that
judgment against [Kelly] or otherwise stepping into the shoes of
a party to that judgment" (emphasis added).

10Kelly, who was pro se, also argued that Stewart Title's
position was a "manipulation of how subrogation is applied"
because it sought to elevate JPMorgan to the priority lien
position even though Stewart Title had paid MERS, which would
(Kelly argued) at best entitle Stewart Title to be subrogated to
MERS, putting Stewart Title in the place of MERS –- in a senior
lien position to its own client, JPMorgan.
12

Indeed, Kelly's entire defense to the breach of contract claim

rested on the argument that Stewart Title had no standing to

bring its claim because it was not a party to the second

mortgage as reformed by the Land Court judgment. As but one

example, Kelly's response to Stewart Title's "Statement of

Material Facts" at the summary judgment stage stated:

"Kelly disputes that he is obligated to pay [Stewart Title]
any amounts due to its loss under any contract or
subrogation theory. The Land Court judgment is enforceable
only between Kelly and [JPMorgan] as they were the only
parties to that court action. [Stewart Title] cannot be a
subrogee to the Land Court judgment. [Stewart Title]
cannot enforce an unsigned contract it was not a party to."
(Emphasis added.)

In fact, Stewart Title acknowledged this as the "crux" of

Kelly's argument11 and responded by stating that it had standing

to enforce the second mortgage as reformed by the Land Court

judgment because it was the subrogee of JPMorgan.12 Given this

extensive history, Stewart Title's position that it was not

aware of the dispute concerning its status as subrogee to

11Stewart Title asserts that Kelly disputed only the
enforceability of the Land Court judgment by Stewart Title, as
opposed to JPMorgan, based on the language of the Land Court
judgment. See note 3, supra. Even this myopic reading of
Kelly's position, however, required Stewart Title to show that
it was subrogated to the rights of JPMorgan, the actual party in
the Land Court judgment. Indeed, this was the "crux" of Kelly's
argument and the "crux" of Stewart Title's response.

12The issue of Stewart Title's standing to enforce the
second mortgage also arose at the hearing on the cross motions.
13

JPMorgan -- an essential element of its breach of contract claim

-- has no basis.

To prove its breach of contract claim, Stewart Title was

required to show that it had a contract with Kelly, or (as was

its theory) that it was subrogated to JPMorgan's rights under

the second mortgage. See George W. Wilcox, Inc. v. Shell E.

Petroleum Prods., Inc., 283 Mass. 383, 388 (1933) (proof of

enforceable contract required to recover for breach of

contract); 13 S.H. Jenkins, Corbin on Contracts § 67.39(2), at

19 (J.M. Perillo ed., rev. ed. 2003) ("In an action for damages

or other type of reparation for a breach of contract, the

plaintiff must allege and prove the making of the contract and

the fact of the breach"). See also General Exchange Ins. Corp.

v. Driscoll, 315 Mass. 360, 364 (1944) (claim of subrogation

rights under contract, rather than equitable principles,

requires proof of express subrogation language). Stewart Title

chose to rely exclusively on a document that contains no express

subrogation clause to support its position (which Kelly

throughout the litigation disputed) that it was JPMorgan's

subrogee. Stewart Title maintains that it never contended that

the document it submitted in support of its position that it was

JPMorgan's subrogee was the entirety of the title insurance

policy. As the party with the burden to establish a contractual

right against Kelly, however, it was incumbent upon Stewart
14

Title to support its claim for subrogation. It cannot, at the

summary judgment stage, rely on mere allegations or documents

that fail to support its position. See Madsen v. Erwin, 395

Mass. 715, 719 (1985); Mass. R. Civ. P. 56 (e), 365 Mass. 824

(1974).

As set forth supra, Stewart Title filed a motion for

reconsideration and an accompanying affidavit from its employee,

attaching a "jacket" that contained an express subrogation

provision; Stewart Title contends that the judge abused her

discretion by denying its motion. See Audubon Hill S. Condo.

Ass'n v. Community Ass'n Underwriters of Am., Inc., 82 Mass.

App. Ct. 461, 470 (2012) (denial of Mass. R. Civ. P. 60 [b], 365

Mass. 828 [1974], motion reviewed for abuse of discretion).

Where a party moves for reconsideration based on newly submitted

evidence, it must show that its failure to submit the evidence

earlier was the result of a "mistake, inadvertence, surprise, or

excusable neglect." Cullen Enters., Inc. v. Massachusetts

Property Ins. Underwriting Ass'n, 399 Mass. 886, 893-894 (1987),

quoting Mass. R. Civ. P. 60 (b). Given the disputed nature of

Stewart Title's subrogation theory, the judge acted within her

discretion in denying the motion. See Tai v. Boston, 45 Mass.

App. Ct. 220, 222-223 (1998) ("simple oversight" not excusable

neglect).
15

b. Implied subrogation. In the alternative, Stewart Title

contends that it is entitled to implied subrogation to pursue

its contract claim because without it, JPMorgan (its insured)

would receive a windfall because it "would have benefitted by

removing the priority mortgage without having to pay for this to

be done."13 While "[t]he reason for implied subrogation under

contracts of insurance is to prevent an unwarranted windfall to

the insured," it is not at all clear how allowing Stewart Title

to pursue a claim against Kelly avoids a windfall to JPMorgan.

Frost, 386 Mass. at 428.

Moreover, unlike in cases allowing a title insurer to be

subrogated to the rights of its insured-mortgagee against a

mortgagor, Kelly is not primarily liable for JPMorgan's loss.14

13Of course, JPMorgan paid Stewart Title (in the form of
closing costs from Kelly) the premium for the title insurance
policy to protect itself from the very risk Stewart Title
eventually was called upon to cure. "'Unlike other forms of
insurance, title insurance is not directed at future risks. It
is directed at risks that are already in existence on the date
the policy is issued.' Because title insurance narrowly covers
defects in, or encumbrances on, titles that are in existence
when a policy issues, title insurers attempt to eliminate or
reduce risks prior to the issuance of a title insurance
policy. . . . [T]itle insurance typically requires a single
premium payment (often a percentage of the property value) for
indefinite coverage . . . ." GMAC Mtge., LLC v. First Am. Title
Ins. Co., 464 Mass. 733, 740 (2013), quoting B. Burke, Law of
Title Insurance § 2.01[C], at 2-22 (3d ed. Supp. 2008).

14In order to recover under implied subrogation, (1) the
insured must have suffered an actual loss for which a third
party is primarily liable; (2) the insurer must have compensated
the insured for the same loss; and (3) the insurer must have
16

Kelly, for example, did not represent that the property was

clear of all encumbrances. Contrast American Title Ins. Co. v.

Coakley, 419 So. 2d 816, 816 (Fla. Dist. Ct. App. 1982)

(permitting title insurer, which paid to clear priority Internal

Revenue Service lien, to be subrogated to rights of its insured

where third party failed to disclose lien on property despite

covenant to do so); Transamerica Title Ins. Co. v. Johnson, 103

Wash. 2d 409, 417-418 (1985) (permitting title insurance

company, which paid to clear sewer lien on property, to be

subrogated pursuant to express clause in title insurance policy

to buyer's rights where seller covenanted to provide property

free and clear of all liens).

Here, Stewart Title bears the responsibility because it

(through its agent, Conti) knew that the first mortgage

encumbered the property and failed to disclose it to JPMorgan,

thereby depriving JPMorgan of the opportunity to mandate that

the encumbrance be cleared as a condition of the second

mortgage. Stewart Title now wishes to be subrogated to the

right of JPMorgan when, years after Stewart Title's negligence

in failing to disclose the first mortgage to JPMorgan, Kelly

breached a provision of the second mortgage, requiring him to

been obligated to make the payment as a duty to indemnify the
insured in order to protect its own interest, rather than as a
volunteer. See 16 L.R. Russ & T.F. Segalla, Couch on Insurance
3d § 223:1 (2005). See also Frost, 386 Mass. at 428-429.
17

clear the first mortgage within ten days' notice. Stewart Title

does not cite to any case law where implied subrogation was

allowed under such circumstances. Indeed, the few cases outside

Massachusetts that address similar (albeit not identical)

situations in the title insurance context hold otherwise. See,

e.g., USLife Title Ins. Co. of Dallas v. Romero, 98 N.M. 699,

703 (1982) (negligence of title insurance company in failing to

exclude known tax lien from coverage under its policy precluded

subrogation when it paid lien pursuant to policy); Lawyers Title

Ins. Corp. v. Edmar Constr. Co., 294 A.2d 865, 869 (D.C. 1972)

(subrogation principles did not permit title insurer to recover

from construction company amount it paid to discharge senior

lienholder where it issued title insurance policy knowing of

priority lien); Lawyers Title Ins. Corp. v. Capp, 174 Ind. App.

633, 637 (1977) (subrogation not available to title insurer to

seek repayment of amount it paid under its policy in view of

fact that insurer's negligence contributed to its failure to

exclude defect in title from its policy).

Some jurisdictions have gone so far as to foreclose

subrogation altogether in such circumstances. See Coy v. Raabe,

69 Wash. 2d 346, 351 (1966) ("it is difficult to think of a

situation in which a title insurance company could not claim

unjust enrichment as to someone who might inadvertently benefit

by their negligence. Either they insure or they don't. It is
18

not the province of the court to relieve a title insurance

company of its contractual obligation"). We need not go so far.

It is sufficient that on the record presented here, the equities

do not favor Stewart Title.

Stewart Title's position regarding its rights as JPMorgan's

subrogee is fatally flawed for an additional reason. When Kelly

breached the provision of the second mortgage requiring him to

pay to discharge the first mortgage, JPMorgan's remedy was

itself to elect to discharge the first mortgage. If it elected

to do so, JPMorgan would be entitled, under the second mortgage,

to add the discharge payment as "additional debt" to the second

mortgage. This additional indebtedness would bear interest as

set forth in the note secured by the second mortgage.

The second mortgage further allowed JPMorgan to request

payment of the additional indebtedness. The record, however, is

devoid of any such request. Thus, nothing in the second

mortgage permits Stewart Title to the lump sum payment it now

seeks.15 See Frost, 386 Mass. at 427 ("If the secondary source

[the subrogee] pays the obligation, it succeeds to the rights of

the party it has paid [the creditor or loss victim, called the

subrogor] against the third, primarily responsible party").

15Neither party addresses the impact of the third mortgage
on the foregoing.
19

2. Unjust enrichment. Stewart Title contends that there

is a material dispute of fact as to whether Kelly reasonably

should have expected it to pay to discharge the first mortgage

and thus that summary judgment should not have entered as to

that claim. In order to recover for unjust enrichment, a

plaintiff must prove that (1) it conferred a measurable benefit

upon the defendant; (2) it reasonably expected compensation from

the defendant; and (3) the defendant accepted the benefit with

the knowledge, actual or chargeable, of the plaintiff's

reasonable expectation. See Finard & Co. v. Sitt Asset Mgt., 79

Mass. App. Ct. 226, 229 (2011). Here, Stewart Title's claim

falters on at least the third element. It is undisputed that

Kelly's first notice that Stewart Title paid to discharge the

first mortgage came when Stewart Title filed the present action.

There is no evidence that Kelly had actual or constructive

knowledge of Stewart Title's intent or plan to discharge the

first mortgage, or Stewart Title's expectation to be compensated

by Kelly for its action. At best, the record shows that Kelly

should have known that, following his inability to pay to

discharge the first mortgage, JPMorgan could elect to discharge

it and add the amount to Kelly's overall indebtedness at the

agreed upon interest rate. In light of the foregoing, summary

judgment was proper.16

16 Stewart Title's request for appellate attorney's fees and
20

Judgment affirmed.

Order denying motion for
reconsideration affirmed.

costs is denied.