Francis v. D & W Saratoga, Inc.

Appellate Division of the Supreme Court of New York

Francis v. D & W Saratoga, Inc.

49 A.D.3d 597, 856 N.Y.2d 137

CourtAppellate Division of the Supreme Court of the State of New York

DecidedMarch 11, 2008

StatusPublished

Cited by4 cases

This text of 49 A.D.3d 597 (Francis v. D & W Saratoga, Inc.) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Francis v. D & W Saratoga, Inc., 49 A.D.3d 597, 856 N.Y.2d 137 (N.Y. Ct. App. 2008).

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Opinion

[598]*598The appellant failed to make a prima facie showing that a claim made by the defendant D & W Saratoga, Inc. (hereinafter D & W), under a title insurance policy it issued to D & W was not covered under the policy. Accordingly, the Supreme Court properly denied the appellant’s motion for summary judgment dismissing D & W’s cross claims against it and, upon reargument, properly adhered to that determination.

The Supreme Court also properly determined that the appellant is obligated to defend D & W in the instant action under the terms of the title insurance policy. “[A]n insurer’s duty to defend its insured arises whenever the allegations in a complaint state a cause of action that gives rise to the reasonable possibility of recovery under the policy” (Fitzpatrick v American Honda Motor Co., 78 NY2d 61, 65 [1991]; see Automobile Ins. Co. of Hartford v Cook, 7 NY3d 131, 137 [2006]). “However, an insurer can be relieved of its duty to defend if it establishes as a matter of law that there is no possible factual or legal basis on which it might eventually be obligated to indemnify its insured under any policy provision” (Allstate Ins. Co. v Zuk, 78 NY2d 41, 45 [1991]). The appellant failed to make that showing. Its contention that coverage for D & W’s claim is precluded under the policy because the basis for the claim, the conveyance of the subject property pursuant to a purportedly fraudulent deed, was not known to the appellant or was not part of the public record as of the effective date of the policy, is unavailing. “[A] title insurer will be liable for hidden defects and all matters affecting title within the policy coverage and not excluded or specifically excepted from said coverage” (Citibank v Commonwealth Land Tit. Ins. Co., 228 AD2d 635, 637 [1996] [internal quotation marks omitted]; see U.S. Bank Natl. Assn. TR U/A DTD 12/ 01/98 v Stewart Tit. Ins. Co., 37 AD3d 822, 824 [2007]). Here, the policy contains no specific exclusion from coverage in the event the deed conveying the property to D & W was fraudulent.

The appellant’s remaining contentions are without merit. Spolzino, J.P., Santucci, Angiolillo and Balkin, JJ., concur.

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[598]*598The appellant failed to make a prima facie showing that a claim made by the defendant D & W Saratoga, Inc. (hereinafter D & W), under a title insurance policy it issued to D & W was not covered under the policy. Accordingly, the Supreme Court properly denied the appellant’s motion for summary judgment dismissing D & W’s cross claims against it and, upon reargument, properly adhered to that determination.

The Supreme Court also properly determined that the appellant is obligated to defend D & W in the instant action under the terms of the title insurance policy. “[A]n insurer’s duty to defend its insured arises whenever the allegations in a complaint state a cause of action that gives rise to the reasonable possibility of recovery under the policy” (Fitzpatrick v American Honda Motor Co., 78 NY2d 61, 65 [1991]; see Automobile Ins. Co. of Hartford v Cook, 7 NY3d 131, 137 [2006]). “However, an insurer can be relieved of its duty to defend if it establishes as a matter of law that there is no possible factual or legal basis on which it might eventually be obligated to indemnify its insured under any policy provision” (Allstate Ins. Co. v Zuk, 78 NY2d 41, 45 [1991]). The appellant failed to make that showing. Its contention that coverage for D & W’s claim is precluded under the policy because the basis for the claim, the conveyance of the subject property pursuant to a purportedly fraudulent deed, was not known to the appellant or was not part of the public record as of the effective date of the policy, is unavailing. “[A] title insurer will be liable for hidden defects and all matters affecting title within the policy coverage and not excluded or specifically excepted from said coverage” (Citibank v Commonwealth Land Tit. Ins. Co., 228 AD2d 635, 637 [1996] [internal quotation marks omitted]; see U.S. Bank Natl. Assn. TR U/A DTD 12/ 01/98 v Stewart Tit. Ins. Co., 37 AD3d 822, 824 [2007]). Here, the policy contains no specific exclusion from coverage in the event the deed conveying the property to D & W was fraudulent.

The appellant’s remaining contentions are without merit. Spolzino, J.P., Santucci, Angiolillo and Balkin, JJ., concur.

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49 A.D.3d 597, 856 N.Y.2d 137, Counsel Stack Legal Research, https://law.counselstack.com/opinion/francis-v-d-w-saratoga-inc-nyappdiv-2008.

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