Iglesias v. Pentagon Title & Escrow, LLC
51 A.3d 51
Md. Ct. Spec. App.2012Background
- Two related appeals arise from a large identity‑fraud scheme involving Iglesias and two separate condo transactions.
- In each purchase, a forged power of attorney enabled Ramirez (English Turn) or Canales (Sawyer Terrace) to sign on Iglesias’s behalf.
- Settlement occurred at Pentagon’s office; loans were funded by Chase on English Turn and by WMC on Sawyer Terrace; Iglesias never attended settlements.
- SACs alleged negligence by Pentagon (settlement agent), Shin (attorney), and Chase (lender) for failure to verify the true party to the transactions and for inadequately scrutinizing the POAs.
- Iglesias sought damages equal to the full purchase prices, arguing the defendants breached duties of care in processing and funding the fraudulent deals.
- The circuit court granted Chase’s dismissal and later summary judgments for Pentagon and Shin; Iglesias appeals on liability and limitations grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Duty of care owed by Chase to Iglesias | Chase owed a duty to verify the claimant’s identity and the POA. | No privity or equivalent relationship; no duty to Iglesias as a non‑party. | Chase owed no cognizable duty to Iglesias as a matter of law. |
| Duty to look behind facially valid POAs by Pentagon/Shin | Red flags and close relationship could create an equivalent privity imposing a duty. | No duty to investigate beyond notarized POAs; acted per lenders’ instructions. | Pentagon and Shin owed no duty to look behind facially valid POAs; summary judgments affirmed. |
| Default and limitations on Shin claim | Default should have been entered; limitations defense should not bar claim. | No abuse of discretion; action against Shin accrued in 2006 and was timely before amendment. | No default; limitations barred the Shin claim; judgments affirmed. |
Key Cases Cited
- Jacques v. First National Bank, 307 Md. 527, 515 A.2d 756 (Md. 1986) (duty for economic loss requires intimate nexus or privity)
- Chicago Title Ins. Co. v. Allfirst Bank, 394 Md. 270, 905 A.2d 366 (Md. 2006) (non-customer liability when intimate nexus exists; look behind blank POA)
- Crosby v. Loudoun Nat’l Bank, 235 F.2d 540 (4th Cir. 1956) (no duty to go behind broad POA; agent as trustee; lender not obliged to ensure funds applied correctly)
- In re Baxter, 320 B.R. 30 (D.D.C. 2004) (lender/closing agent not obliged to look behind facially valid POA in fraud context)
- Walpert, Smullian & Blumenthal, P.A. v. Katz, 361 Md. 645, 762 A.2d 582 (Md. 2000) (equivalent privity when face‑to‑face meeting; reliance and vulnerability)
- Simmons v. Lennon, 139 Md.App. 15, 773 A.2d 1064 (Md. 2001) (no duty absent equivalent privity; reliance in fraud cases)