RONALD E. BUSH, Magistrate Judge.
Now pending before the Court is Plaintiffs' Motion in Limine to Exclude Alternative Access Theories (Docket No. 88). Having carefully considered the record, participated in oral argument, and otherwise being fully advised, the Court enters the following Memorandum Decision and Order:
On October 21, 2013, the undersigned issued an Order Setting Trial and Pretrial Conference (Docket No. 84). Among other things, that Order stated: "On or before November 15, 2013, the parties shall file a stipulation concerning those issues (and any corresponding time frame(s) relevant to such issues) to be resolved by the Court during the bifurcated portion of the trial." Order, p. 1 (Docket No. 84).
On November 14, 2013, the parties submitted the requested Stipulation (Docket No. 85). Among other things, that Stipulation identified the following issue for the Court's resolution:
Stipulation, p. 2 (Docket No. 85).
In a November 19, 2013 Order, the undersigned acknowledged a February 26, 2014 pre-trial motions/motions in limine deadline, however determined that "an earlier resolution of the `alternative access theories' issue described in the parties' Stipulation is warranted." Order, p. 2 (Docket No. 86). Consistent with the Court's briefing schedule, on December 11, 2013, Plaintiffs filed the at-issue Motion in Limine (Docket No. 88) and, on December 23, 2013, Old Republic filed its response thereto (Docket No. 89).
This Court previously determined as a matter of law that the policy of title insurance ("Policy") at play here "provides coverage in instances where no right of access — legal access — exists to and from the [relevant property]." 9/26/13 MDO, p. 18 (Docket No. 81) (emphasis in original). However, whether legal access to that property in fact existed during the applicable time period remains an unsettled question before this Court — one that is set to be tried in the upcoming trial. See id. at p. 19. To that end, it is expected that Old Republic will advance different arguments — the "alternative access theories" — that, if accepted, would establish the requisite legal right-of-way and, thus, preclude coverage under the Policy. Plaintiffs object to any consideration of those theories, arguing that: "(1) Old Republic did not assert these various theories at the time it denied Plaintiffs' claim for coverage, and it should in defense of its conduct be limited to the bases on which it actually relied for its denial; (2) Old Republic both lacks standing and has failed to join necessary and indispensable parties for proper litigation and judicial consideration of these various theories; and (3) the historical facts giving rise to this case do not provide any justifiable basis for this Court to review indisputable factual realities of the property access that are contrary to Old Republic's asserted theories." Mem. in Supp. of Mot. in Limine, p. 2 (Docket No. 88, Att. 1). Old Republic disagrees. See Opp. to Mot. in Limine, p. 4 (Docket No. 89). In an effort to assist the parties in their trial preparation work, Plaintiffs' arguments are briefly addressed in order below.
In its September 26, 2013 Memorandum Decision and Order, this Court found that, "while it is hereby understood that the Policy provides coverage when no legal right of access to the Property exists . . ., Plaintiffs must still prove that they actually had no such right (and, in doing so, contend with and rebut Old Republic's arguments to the contrary), along with their alleged, recoverable damages that resulted therefrom." 9/26/13 MDO, p. 18 (Docket No. 81). From this, Plaintiffs' Motion in Limine attempts to freeze in time the action's lynchpin issue to what literally took place vis à vis Old Republic's denial of coverage:
Mem. in Supp. of Mot. in Limine, p. 4 (Docket No. 88, Att. 1) (emphasis in original). In turn, Plaintiffs argue that, because Old Republic did not assert any of the alternative access theories at the time it originally denied coverage under the Policy, Old Republic is estopped from now doing so in defense of Plaintiffs' claims against it. See generally id. at pp. 4-8 ("This case should be proceeding to trial only on what was, in fact, the status of the access rights for the Plaintiffs' property as of 2009. . . . . Plaintiffs respectfully requests that this Court . . . not allow Old Republic to assert coverage arguments at the trial of this action that it did not previously rely on in making the initial coverage determination.").
Old Republic naturally disagrees, claiming that it not only sufficiently laid out its position on the access issue when originally denying coverage under the Policy, but that, regardless, Plaintiffs suffered no prejudice owing to any alleged shortcomings/ambiguities in Old Republic's decision not to provide coverage. See Opp. to Mot. in Limine, p. 6 (Docket No. 89). The undersigned agrees with Old Republic.
First, it cannot be said that Old Republic's alternative access theories have heretofore been kept "on ice," just waiting for Plaintiffs to bring a declaratory relief action against it, or are self-serving responses prompted for the first time by the same. Rather, as Old Republic points out in its briefing, Old Republic told Plaintiffs that it was denying their claim because it believed there was legal access to the property in question. See id. at p. 5. For example, in a February 8, 2010 letter (nearly two years before Plaintiffs initially brought this action in state court), Old Republic rejected Plaintiffs' coverage argument (relating to, inter alia, the denial of a zoning application), stating in no uncertain terms that:
2/8/10 Ltr. from Shaw to Lloyd (Docket No. 56, Att. 2); see also 1/5/10 Ltr. from Shaw to Guenther (Docket No. 56, Att. 3). By citing case law on the subject, while simultaneously countering Plaintiffs' additional coverage arguments, Old Republic was contending (and still does contend) that, via various legal theories (e.g., the alternative access theories), Plaintiffs do indeed enjoy a right of access — legal access — to their property.
Second, even assuming Old Republic's denial of coverage lacked explanatory particulars, there is no indication that Plaintiffs suffered any prejudice as a result — above and beyond having to bring the instant action. See Opp. to Mot. in Limine, pp. 5-6 (Docket No. 89) (quoting 1 Ins Claims and Disputes § 2:24 (6
Simply put, Old Republic's alternative access theories respond to Plaintiffs' claims so as to, in essence, defend Old Republic from liability. These alternative access theories are not as new as Plaintiffs submit and, furthermore, Plaintiffs are not prejudiced by having those theories further considered at this stage of the lawsuit. With all this in mind, Old Republic is entitled to argue its alternative access theories at trial, based on the arguments raised in Plaintiffs' Motion in Limine. Plaintiffs' Motion in Limine is therefore denied in this respect.
Plaintiffs argue that Old Republic's alternative access theories essentially amount to Old Republic asking this Court for a declaratory judgment of its own (to the effect of an affirmative ruling that Plaintiffs have legal access to their property) and, because it is only an interested party without any involved property ownership, Old Republic lacks standing to pursue such recourse:
See Mem. in Supp. of Mot. in Limine, p. 8 (Docket No 88, Att. 1) (citation omitted). Plaintiffs' argument presumes too much.
Old Republic is not asking this Court to rule as a matter of law that Plaintiffs have legal access to their property. If that were the case, reflected by, for example, Old Republic's separate declaratory action, Plaintiffs' argument might be correct. But, without such a condition precedent, Plaintiffs' argument is missing a backbone. Here, Old Republic's alternative access theories operate to support its denial of Plaintiffs' allegation that Old Republic breached the Policy — the fact that this Court's consideration of such theories may go to the issue of Plaintiffs' access does not morph Old Republic's defense of Plaintiffs' claims into some sort of affirmative action requiring the standing that Plaintiffs' now contend. Otherwise, what is an insurer like Old Republic to do in situations where it disagrees with a similarly-situated insured and there is no duty to defend (as the undersigned has already concluded)? The law simply does not support the conclusion that Plaintiffs ask this Court to reach. Old Republic has "standing" to raise its alternative access theories at trial. Plaintiffs' Motion in Limine is therefore denied in this respect.
In its September 26, 2013 Memorandum Decision and Order denying, in part, Old Republic's motion for summary judgment, this Court briefly spoke to Old Republic's then-germinating alternative access theories, stating:
9/26/13 MDO, p. 19, n.10 (Docket No. 81). Based on this portion of the prior Order, Plaintiffs additionally argue that Old Republic has failed to join the parties that are needed in order to consider and resolve Old Republic's corresponding arguments. See Mem. in Supp. of Mot. in Limine, pp. 10-11 (Docket No. 88, Att. 1) ("Under Idaho law, it is incumbent upon the party seeking a judicial declaration of the existence of a property interest, when that interest would encumber land owned by other parties, to join the owners of the would-be encumbered property as parties in the litigation. . . . . [A]s the party seeking a declaration by this Court of an access right that would burden land owned by other parties, Old Republic had the burden to join the other property owners that would be affected by this suit (in particular, Ada County and/or the Ada County Highway District),but it failed to do so."). For reasons similar to those articulated above regarding Old Republic's "standing," the undersigned disagrees.
As previously expressed, Old Republic is not seeking declaratory relief; instead, it is disputing Plaintiffs' claim against it, which happen to speak to access issues relating to Plaintiffs' property and, likewise, coverage under the Policy. This distinction, while somewhat nuanced, is important because it highlights the fact that any decision from this Court will only affect those parties to the Policy — Plaintiffs and Old Republic. That is, either coverage exists or it doesn't. Certainly, evidence surrounding Old Republic's alternative access theories may involve other, non-joined parties and, thus, may present some difficulty in proving its defense to Plaintiffs' claims. But that fact does not mean that those parties must be joined in this action before resolving the parties' coverage dispute. The other parties may likely be part of the mix of evidence put before the Court, and such evidence may have implications for similar disputes between other parties, but the ultimate result of the Court's rulings in this case are likely limited to the parties on hand. It is a messy way to sort out property rights, perhaps, but in the context of the instant dispute over the nature of coverage under a particular title insurance policy, it is the only way available.
Hence, Old Republic is not precluded from raising its alternative access theories at trial for failure to join indispensable parties. Plaintiffs' Motion in Limine is therefore denied in this respect.
Plaintiffs also argue that Old Republic's alternative access theory that the Barnes Main Access Road was a public right-of-way is separately problematic because (1) its application necessarily runs afoul of Idaho' statutory law dealing with rights-of-way validation proceedings, and (2) there was never a valid dedication for public use of the road because of the "undisputed record chain of ownership." See Mem. in Supp. of Mot. in Limine, pp. 11-15 (Docket No. 88, Att. 1). These arguments will not prevent Old Republic from testing such an alternative access theory at trial.
Significantly, Old Republic is not seeking to have the Barnes Main Access Road validated as a public right-of-way as a product of this litigation; rather, it argues that the Barnes Main Access Road is already a public right-of-way and asks that this Court recognize as much to combat Plaintiffs' claims against it. The parties' disagreement on this point (demonstrated by their dueling evidentiary support) goes to the merits of the public right-of-way alternative access theory and does not outright foreclose Old Republic from at least making the argument going forward. More fundamentally, to the extent the parties maintain different understandings and arguments as to how a public right-of-way is established and how that applies to the historical backdrop of this case, the undersigned is not in a position to pick a winner right now. That is the purpose of the upcoming bench trial, if it gets to that point.
Based on the foregoing, it is HEREBY ORDERED THAT Plaintiffs' Motion in Limine to Exclude Alternative Access Theories (Docket No. 88) is DENIED.
1 Ins Claims and Disputes § 2:24 (6
