Connecticut Court Holds Real Estate Broker Did Not Have Standing to Sue Closing Attorney for Failing to Provide Purchasers With Title Search

The Superior Court of Connecticut recently held that a closing attorney was not liable to a real estate agent or broker for not providing a title search to the purchasers of a property.  See Carroll v. Lyman, 2018 WL 5793531 (Conn. Super. Ct. Oct. 19, 2018).  In the case, plaintiffs purchased a property that had been advertised as including “direct lake frontage as well as a private dock.”  After purchasing the property, they discovered that the property immediately adjacent to the lake and dock, as well as the dock itself, were owned by a neighbor.  Plaintiffs sued the sellers and the real estate agent and broker for this misrepresentation.  The agent and broker then brought two claims against plaintiffs’ closing attorney.  The first, a claim of common law indemnification, was based on the argument that the attorney was negligent by not providing plaintiffs with the title search prior to the closing.  The second, a claim of breach of fiduciary duty, was based on the argument that the attorney breached her fiduciary duty to plaintiffs by not providing them with the title search and/or not giving them the option to purchase a title insurance policy.  The closing attorney moved to dismiss.

The Court granted the closing attorney’s motion, finding that the agent and broker lacked standing to bring these claims against the closing attorney.  First, the Court found that the indemnification claim failed as a matter of law because there was no duty between the closing attorney and the real estate agent and broker.  It held: “Attorneys do not owe persons other than their own clients a duty, and are therefore not liable to persons other than their clients for negligence acts,” nor were the agent or broker “the intended or foreseeable beneficiary of the attorney’s services.”  Second, the Court found that this same analysis applied to the breach of fiduciary duty claim, holding that the closing attorney did not owe any duty to the agent or broker, and that the claims against the attorney should be dismissed.

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com, Michael Crowley at mcrowley@riker.com, or Dylan Goetsch at dgoetsch@riker.com.