Edwards v. Fidelity National Title Ins. Co.

Opinion

STATE OF MAINE BUSINESS AND CONSUMER COURT CUMBERLAND, ss. DOCKET NO. BCD-CV-14-IS v-· DARLENE F. EDWARDS and LEWIS M. ) EDWARDS, III, )

)

Plain tiffs, ) ORDER ON PLAINTIFFS'

) MOTION TO RECONSIDER v. )

)

FIDELITY NATIONAL TITLE ) INSURANCE COiviPANY, )

)

Defendant. )

Before the Court is the Motion to Reconsider by Plaintiffs Darlene F. Edwards and Lewis M. Edwards, III ("the Edwards") and the opposition thereto by Defendant Fidelity National Title Insurance Company ("Fidelity"). The motion came before the court for oral argument on March 23,2015.

For the reasons set forth herein, this Court grants the Motion to Reconsider in part and, in so doing, will enter summary judgment in f.wor of the Edwards on Fidelity's duty to detend based on this Court's conclusion that the claims of deeded easement rights asserted by the Scott Defendants and the Cottage Lot Owners in the two underlying cases ru·e potentially covered under the Policy.

The Edwards filed a Motion for Summary Judgment in this case in October 20 H wherein they sought summary judgment on the issue of Fidelity's duty to defend them in two underlying cases. Fidelity opposed this motion. By Order dated December 12, 201'1<, this conrt denied the Motion for Summary Judgment filed by the Edwards on the issue of Fidelity's duty to defend.

The Edwards timely tiled the instru1t motion asking· this court to reconsider its

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summary judg·ment decision on the issue of Fidelity's duty to defend them because of their views that 1) there is potential for coverage under the Policy based on the claims of deeded easement rights allegedly burdening the Property as asserted by the Scott Defendants and the Cottage Lot Owners in these underlying cases, and 2) there is potential coverage under the Policy based on the claim made by the Town of Owls Head of public rights adverse to the Property at issue in one of the underlying cases.

Analysis

A. Claims of deeded easement rights asserted in the underlying cases There 1s no dispute that the claims by the Scott Defendants and the Cottage Lot Owners in the underlying cases alleging that they have deeded easement rights which encumber the Property are claims which meet the definition of 11 Covered Risks 11 as defined by

the Policy. Rather, the dispute between the parties here focuses on the language of Exception

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No. 6 in ScheduJe B of the Policy which excepts coverage for covenants, conditions,

restrictions, rights of ways, easements, reservations, riparian rights of water rights affecting said premises as contained in pl"i01· chain of title or as shown on the recorded plan. 11 (PSOMF at Tab I -Schedule B to Policy).

Specifically, the parties disagree as to the meaning of the terms "contained in prior chain of title" and "shown on the recorded plan 11 set forth in Exception No. 6. As noted by this Court in its Order dated December lQ, '20H, policy language is ambiguous if it is reasonably susceptible of different interpretations or if any ordinary person in the shoes of the insured would not understand that the policy did not cover claims such as those brought. Co:r v. Commonwealth Land Title Ins. Co., 59 A.3d 1280, 1283 (Me. 201S). By its Order dated December 12, 20 H, this Court has already determined that both of these terms are ambiguous in the context of the Policy.

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However, although this Court agreed with the Edwards that the terms "contained in prim chain of title" and "shown on the recorded plan" are ambiguous, the court did not resolve the ambiguity in favor of the Edwards. Rather, the court suggested that extrinsic evidence should be considered to resolve these ambiguities.

As set forth in more detail below, upon reconsideration, this court agrees with the Edwards that it should not attempt to resolve these ambiguities in the Policy language by examining· extrinsic evidence. Rather, it is clear that these ambiguities must be resolved in f.wor of the Edwards.

If an exclusion m a policy is ambiguous, the comt interprets it strictly against the insurer and liberally in f.wor of the insured. Patrons O.iford Ius. Co. v. Han·is, 905 A.2d 819, 82•1• (Me. 2006). This is because "[u]ltimately, Maine law 'place[s] the burden of uncertainty as to [a] policy's coverage on the insurer."' Centenuial Ius. Co. v. Patterson, 56·1· F.sd 46, 5':1.• (1st Cir. 2009) (quoting Travelers Indem. Co. v. Dingwell, 4•14• A.2d 220, 227 (Me. 1980)). Therefore, "[r]egarcUess of extrinsic evidence, if the complaint-read in conjunction with the policy- reveals a mere potential that the facts may come within the coverage, then the duty to defend exists." Co.r v. Commonwealth, 59 A.sd at 128S (citing Penney v. Capitol City Trausje1~ Inc., 707 A.2d 387 (Me. 1998)); see also OueBeacou America Ins. Co. v. Johnny's Selected Seeds, Inc., 2014< WL 1569517; !11etropolitan Property and Casualty Ius. Co. v. JvlcCartlty, 75'1· F.Sd 4·7 (1st Cir. 20 14•).

The term "contained in the prior chain of title'' as used in Exception No 6, when construed in favor of the Edwards, means the record of successive couveya11ces, or other forms qf alienation, for the Property 'With the record period starting with a warranty deed recorded at least 1·0 years prior to the present date. See Black's Law Dictionary for a definition of "chain of title" and Jv!aine Title Standard 201 which prescribes the accepted standard followed by attol'l1eys and title examiners in searching and examining· the record for real property in Maine.

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Upon a rev1ew of the facts alleged by the claimants in their counterclaims in the underlying cases, it is clear that the potentia] exists that the deeded easements claimed are not "contained in the prior chain of title" for the Property. The counterclaim by the Scott Defendants cites two deeds as being within the chain of title tor the Scott property and supporting their claim of deeded easement rights: a deed from the Estate of James Young to RobertS. Hurtig and Marie E. Hurtig recorded at the Knox County Registry of Deeds at Boo}{ J4.16, Page 147 and a deed from the H tirtigs to the Scott Defendants recorded at said Regis try at Book 1857, Page 087. (PSOMF at Tab 6- Counterclaim by Scott Defendants~~ 9,10, 18 and 19). There is no assertion in the Scott counterclaim that these deeds are "contained in the prior chain of title" for the Property of the Edwards. Likewise, the claims of deeded easement rights by the Cottage Lot Owners cite to various deeds in their respective chains of title which are not alleged to be "contained in the prior chain of title'' for the Property of the Edwards. (PSOMF at Tab 8- Amended Counterclaim by Cottage Lot Owners ~ ~ 18-35). Thus, there is clearly potential that the claimed deeded easement rights are easements affecting the Property \ovhich are not "contained in the prior chain of title" for the Property.

The term "shown on the recorded plan" as used in Exception No 6 of the Policy is ambiguous because it is not clear which plan is meant. Thus, where it cannot be said which pl~1 is meant, this exception cannot be interpreted to except coverage which is otherwise covered as a "Covered Risk" under the Policy.

Moreover, even if it could be said that "the recorded plan" unambig-uously means the Blackinton Plan, this does not provide Fidelity with a basis to deny its duty to defend because there is nothing- on the Blackinton Plan which unambiguously shows an easement for use of the beach on the Property of the Edwards for bathing and boating- tor the benefit of the property of the Scotts or the properties of the Cottage Lot Owners.

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The threshold for imposing a duty to defend is low and that threshold has been met in this case.

B. The Town's Claim of Dedicated Public Easement The Edwards ask this Court to reconsider the interpretation of the term "stated cause of action" as contained in the Policy, and to grant them, rather than Fidelity, summary judgment on the issue of whether Fidelity owes a duty to defend the claim of the Town. The Court entertained and has considered written and oral arguments on these issues and remains persuaded that Fidelity is entitled to summary judg·ment on this issue. Specifically, as stated in Part F of the Court's previous Order dated December 12, 2014•, the Policy clearly and unambiguously limits Fidelity's duty to defend to "stated causes of action alleging matters insured against by this policy." A cause of action cannot be equated with an affirmative defense. See Philadelphia lndem. Im. Co. v. Chicago Title Ius. Co., 771 F.sd 391, •W 1 & n. 7 (7th Cir. 2014) (title insurer had no duty to defend against an affirmative defense because policy limited duty to defend to "causes of action" and an afl1rmative defense is not a cause of action).

Because the Town never asserted any "stated causes of action alleging matters insm·ed against by this policy," to extend Fidelity's duty to defend to this circumstance would, in effect, be to rewrite the Policy. It would also be to convert what is a clearly defined duty to defend against litigation into a duty to subsidize litigation initiated by the Edwards.

Conclusion

For the foregoing reasons, it is hereby ORDERED that Plaintiffs' Motion to Reconsider this Court's Order dated December 12, ~20 1·1· is GRANTED as to the issue of Fidelity's duty to defend the deeded easement counterclaims asserted against them. As to that issue, summary judgment is hereby granted to Plaintiffs that Fidelity has a duty to cletend them against the counterclaims of deeded easement rights in the underlying cases. The Motion to Reconsider is

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DENIED as to Plaintiffs' claim that Fidelity has a duty to "defend" the claims asserted by them against the Town.

Pursuant to MJtCiv.P. 79(a), the Clerk is hereby directed to incorporate this Order by reference in the docl(et.

Dated April 16, 2015 A.M. Horton, Justice

Maine Business and Consumer Court

'. /

Entered on the DQcket: Lf- /2-/)

Coples sen! vlll Mall_ E~ronlcally j/

Darlene F. Edwards and Lewis M. Edwards, III. v. Fidelity National Title Insurance Company BCD-CV-14-13

Darlene F. Edwards and Lewis M. Edwards, III.

Plaintiffs

Counsel: James Barns, Esq.

361 US Route 1

Falmouth, ME 04105

Mary Cooper, Esq.

17 Sea Street

PO Box 190

Camden, ME 04843

Fidelity National Title Insurance Company Defendant

Counsel: Brent Singer, Esq.

F. D. Walker, Esq.

84 Harlow St.

PO Box 140

Bangor, ME 04402-1401