Title Insurer Tort Claims Barred Absent an Independent Duty; Time-Barred Amendments Denied Where Relation-Back Fails

Case: Marrero v Thomas, 2026 NY Slip Op 03788 (App. Div. 2d Dep’t June 17, 2026)
Court: Appellate Division of the Supreme Court of New York, Second Department
Core holdings: (1) belated amendments adding contract-based claims are properly denied where time-barred and not saved by CPLR 203(f); (2) a negligence claim against a title insurer is dismissible where the policy confines negligence-based damages to the policy and the insurer assumed no duty independent of the contract; (3) renewal is proper where a subsequent discontinuance with prejudice eliminates the contingency on which contractual indemnification was pleaded.

1. Introduction

This appeal arose from a long-running Brooklyn title dispute. Karen Wharton purchased real property in 2004 and obtained a title insurance policy issued by Stewart Title Insurance Company (“Stewart”) through an agent. In 2005, plaintiffs sued to set aside Wharton’s deed (and a predecessor deed). Stewart retained counsel for Wharton, but Wharton elected to substitute her own counsel.

Wharton then impleaded Stewart, asserting (as relevant) (i) contractual indemnification—pleaded contingently “if” she were found liable to plaintiffs—and (ii) negligence. Years later, after the main action settled as to everyone except Wharton, Stewart sought summary judgment dismissing these third-party claims. Wharton cross-moved to amend to add breach of contract and breach of the implied covenant of good faith and fair dealing.

The procedural posture became decisive: after the November 30, 2018 order denied Stewart’s requested dismissal and denied Wharton’s proposed amendment, the main action was later discontinued with prejudice against all parties, including Wharton. Stewart then sought renewal (as to indemnification) and reargument (as to negligence), and obtained dismissal of both third-party claims. The Second Department affirmed.

Key issues

  • Pleading amendment: When should a court deny leave to amend under CPLR 3025(b) because proposed new claims are time-barred and do not relate back under CPLR 203(f)?
  • Renewal/reargument: How do CPLR 2221(e) (renewal) and CPLR 2221(d) (reargument) operate when post-order developments and legal misapprehensions are shown?
  • Title insurance liability: Can an insured maintain a tort (negligence) claim against a title insurer, or is liability confined to contract absent an independent duty?
  • Contingent indemnification: What happens to a contractual indemnification claim pleaded as dependent on the insured being found liable in the underlying action when that underlying action is discontinued with prejudice?

2. Summary of the Opinion

The Second Department:

  • Affirmed denial of Wharton’s cross-motion to amend the third-party complaint, holding the proposed breach of contract and implied covenant claims were time-barred under CPLR 213(2) and not saved by CPLR 203(f) because the earlier pleading did not give notice of the transactions/occurrences to be proved under the new theories.
  • Affirmed the order granting Stewart renewal and reargument and, on renewal/reargument, granted summary judgment dismissing:
    • Contractual indemnification: dismissed because the claim was pleaded as contingent on Wharton being found liable in the main action, and the main action had been discontinued with prejudice as to Wharton.
    • Negligence: dismissed because the policy restricted negligence-based damages arising from title status to the policy and Stewart assumed no independent duty outside the contract.
  • Dismissed Stewart’s cross-appeal from the 2018 order as academic because the pertinent portion had been effectively vacated upon renewal and reargument.

3. Analysis

A. Precedents Cited

1) Amendment standards and “patently devoid of merit”

  • Glaubach v Slifkin, 198 AD3d 623:

    The Opinion uses Glaubach v Slifkin to restate the familiar CPLR 3025(b) rule: leave to amend should be freely granted absent prejudice or surprise unless the proposed amendment is “palpably insufficient or patently devoid of merit.” Here, “patently devoid of merit” was established because the proposed new causes were time-barred and did not relate back.

  • Merlino v Knudson, 214 AD3d 642:

    Cited for the appellate deference principle: a trial court’s determination on leave to amend is discretionary and “will not be lightly disturbed.” That deference mattered because Wharton’s cross-motion was made very late in a case already pending for more than a decade.

2) Limitations and relation-back defects

  • Deutsche Bank Natl. Trust Co. v McAvoy, 188 AD3d 808:

    The Opinion cites Deutsche Bank Natl. Trust Co. v McAvoy for the proposition that time-barred proposed claims are “patently devoid of merit” for amendment purposes. The limitations analysis was not a side issue; it was dispositive.

  • Calamari v Panos, 131 AD3d 1088:

    The court relied on Calamari v Panos to underscore why CPLR 203(f) relation-back failed: the proposed breach-based claims were grounded in “distinct factual allegations as to the underlying conduct and the time period in which it occurred,” rather than a mere re-labeling of the same transactions noticed in the original pleading.

3) Title insurance: contract-limited liability and no tort duty absent independence

  • 53 Spencer Realty, LLC v Fidelity Natl. Title Ins. Co., 236 AD3d 716:

    Quoted for the foundational description of title insurance as an indemnity contract: the insurer “agrees to indemnify its insured for loss occasioned by a defect in title.” This frames the insured’s remedy as contract-centric and loss-based, not an open-ended duty to prevent problems or guarantee title.

  • Renaissance Venture Capital Corp. v Fidelity Natl. Tit. Ins. Co., 128 AD3d 790:

    Cited for the rule that the title insurer’s liability is based on contract and “the rights of the parties are limited to its terms.” The Opinion applies this directly to a policy provision restricting negligence-based damages tied to title status to the policy itself.

  • McColgan v Brewer, 75 AD3d 876:

    Used to support the conclusion that Stewart did not assume “any additional duty” independent of the contract. The negligence claim failed because the asserted wrong did not arise from a separate duty recognized by law.

  • Choudhary v First Option Tit. Agency, 107 AD3d 657 (cited as “cf.”):

    The “cf.” signal indicates a contrasting scenario where circumstances may support an extra-contract duty (or different analysis) in the title context. The Second Department invoked it to emphasize that this case did not present such circumstances.

  • Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70 NY2d 382:

    Cited “generally” for New York’s doctrinal boundary between contract and tort: a negligence claim cannot be used to recover for a breach of contract unless there is a legal duty independent of the contract itself. The Opinion treats Wharton’s negligence theory as an impermissible attempt to expand contract remedies into tort.

B. Legal Reasoning

1) Why the amendment was properly denied (CPLR 3025[b], 213[2], 203[f])

Wharton sought to add breach of contract and breach of the implied covenant of good faith and fair dealing years into the litigation. The court’s reasoning was sequential:

  • Step 1 — Limitations: The proposed claims were time-barred under CPLR 213(2) (six-year limitations period for contract claims).
  • Step 2 — Relation-back failure: CPLR 203(f) did not rescue them because the “original pleading does not give notice of the transactions, occurrences, or series of transactions or occurrences, to be proved pursuant to the amended pleading.” In other words, the new theories were not just new labels; they depended on different factual allegations and time periods.
  • Step 3 — Merit threshold for amendment: Because the claims were time-barred and did not relate back, they were “patently devoid of merit,” justifying denial even under the liberal amendment policy of CPLR 3025(b).

2) Renewal as to contractual indemnification (CPLR 2221[e])

Renewal requires “new evidence” that would change the prior determination. Stewart satisfied this by showing that, after the 2018 order, the main action was discontinued with prejudice against all parties, including Wharton.

That new procedural fact extinguished the contingency embedded in Wharton’s pleaded indemnification theory: she sought contractual indemnification only “if” she were found liable in the main action. With a discontinuance with prejudice, there would be no finding of liability and no damages assessed against her in that action—so the indemnification cause of action, “as alleged,” could not stand.

3) Reargument as to negligence (CPLR 2221[d][2])

Reargument is appropriate where the court “misapprehended the facts” or “the applicable law.” The Second Department agreed the motion court had misapprehended the governing principles for negligence claims against a title insurer.

On reargument, summary judgment dismissal was warranted because:

  • Policy-based limitation: The title policy expressly restricted negligence-based damages “which arises out of the status of the insured title” to the policy. That contractual limitation reinforced that the dispute belonged in contract, not tort.
  • No independent duty: Stewart did not assume any duty to Wharton separate from the insurance contract. Absent an independent duty, a negligence claim cannot be used to enlarge contractual obligations or remedies.
  • No triable issue: Wharton’s opposition did not raise a triable issue of fact once the analysis was properly framed as contract-limited and duty-dependent.

C. Impact

1) Litigation strategy in title insurance disputes

  • Tort claims will face early dismissal where the alleged negligence is simply a repackaged complaint about the “status of the insured title” and the policy limits remedies to the contract.
  • Plead independent duty facts (if they exist) early and specifically. The Opinion signals that conclusory negligence allegations will not survive when the insurer’s role is purely contractual.

2) Amendments late in the case: limitations and notice are gatekeepers

  • The decision reinforces that “freely granted” amendments under CPLR 3025(b) are still screened for substantive viability; time-barred claims that do not relate back are dead on arrival.
  • Relation-back under CPLR 203(f) turns on whether the original pleading provided notice of the transactions/occurrences underlying the new claims—not merely whether the claims concern the same general relationship between the parties.

3) Renewal/reargument as practical corrective tools

  • Renewal: Subsequent dispositive procedural events—like a discontinuance with prejudice—can qualify as “new evidence” that changes the legal landscape for contingent claims.
  • Reargument: Where an order rests on an incorrect understanding of the law governing contract/tort boundaries, CPLR 2221(d) provides a mechanism to correct course without waiting for appeal alone.

4. Complex Concepts Simplified

  • Title insurance as “indemnity,” not a guarantee: A title policy generally promises to reimburse the insured for covered losses caused by title defects; it does not necessarily promise that no defect exists or create broad tort duties.
  • Independent duty (contract vs tort): In New York, you cannot usually sue in negligence for what is essentially a failure to perform a contract. You need a duty that exists apart from the contract—something the law imposes independently (or that the defendant voluntarily assumed beyond the contract).
  • Leave to amend vs. “patently devoid of merit”: Courts are liberal in allowing amendments, but not when the new claim is legally doomed (for example, barred by the statute of limitations).
  • Relation-back (CPLR 203[f]): A late claim can sometimes “relate back” to an earlier pleading date, but only if the earlier pleading gave notice of the factual transactions/occurrences the new claim depends on.
  • Renewal vs reargument: “Renewal” is based on new evidence or changed circumstances; “reargument” is based on the court’s mistaken understanding of facts or law on the original motion.
  • Discontinuance with prejudice: A voluntary end to a case that bars bringing the same claims again. Here, it eliminated the possibility of the insured being found liable in the main action—collapsing a contingent indemnification claim.

5. Conclusion

Marrero v Thomas consolidates two practical rules with outsized procedural importance in New York practice. First, proposed amendments adding contract-based theories will be denied when they are time-barred and the original pleading did not provide the notice needed for CPLR 203(f) relation-back—rendering the amendment “patently devoid of merit” despite CPLR 3025(b)’s liberal standard. Second, negligence claims against a title insurer will not stand where the alleged wrong arises from the status of title covered by the policy, the policy confines such claims to contract remedies, and the insurer assumed no independent duty. The decision thus reinforces New York’s contract–tort boundary in the title insurance context and illustrates how renewal and reargument can properly recalibrate a case after dispositive procedural developments.