A title agent failed to record a mortgage. The guarantor who backed that agent tried to pin the blame on a subcontractor - and lost.
New York's Appellate Division, First Department, ruled on August 27, 2026 that the guarantor could not pass his liability down the chain to a company he said was hired to file the paperwork.
It started with a routine job. Fidelity National Title Insurance Company (Fidelity) hired Sky Abstract Corp. (Sky) as its policy issuing agency and made it responsible for recording a first mortgage on a Brooklyn property. Sky issued Fidelity's title policy to Greenpoint Mortgage Funding Inc. (Greenpoint) but never recorded the mortgage.
The gap mattered. The property was later sold to a new owner, who took a loan from JPMorgan Chase Bank and gave the bank a mortgage in return. Chase's mortgage was recorded promptly. The buyer defaulted in February 2008, and Chase filed for foreclosure that June. Sky did not record the original mortgage until July 2, 2008 - by then, Chase had already locked in its position.
Fidelity paid Greenpoint for the loss of its first priority position, then sued Sky and the guarantor who had backed Sky's obligations to the insurer.
The guarantor tried to spread the loss. He filed third-party claims for common-law indemnification against Nationwide Court Services, Inc. (Nationwide), which he said Sky had retained to record the mortgage. His argument: he did nothing wrong, he owed Fidelity only because he had backed Sky, and Nationwide was the party that actually failed.
The court disagreed. A common-law indemnification claim does not require a contract with the party you are chasing, it said. But the person seeking indemnity must show their duty to pay rests either on liability imposed by law - such as vicarious liability, where one party answers for another's conduct - or on an existing relationship between the two, like that of a guarantor and the principal it backs.
Neither applied. As the court put it, "the key element of a common-law cause of action for indemnification is not a duty running from the indemnitor to the injured party, but rather is a separate duty owed the indemnitee by the indemnitor."
Sky dealt directly with Nationwide. The guarantor did not. His claim that "Sky provided Nationwide with the mortgage for recording" described Sky's dealings, not his own. Finding no direct tie between the guarantor and Nationwide, the court affirmed the dismissal, without costs.
