MARY M. LISI, Chief District Judge.
Plaintiff, Connecticut Attorneys Title Insurance Company ("Plaintiff'), has filed a complaint against Defendant, Casmat, LLC ("Defendant"), seeking a declaration concerning Plaintiffs rights and obligations pursuant to a title insurance policy it issued to Defendant. Specifically, Plaintiff petitions this Court for a judgment finding that Defendant's claims are not covered under the title insurance policy and that Plaintiff has a right to discontinue its involvement in the prosecution and defense of a lawsuit' pending in Rhode Island Superior Court. The matter is before the Court on Plaintiffs motion for summary judgment.
Summary judgment is appropriate only "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). An issue is "genuine" if the pertinent evidence is such that a rational factfinder could resolve the issue in favor of either party, and a fact is "material" if it "has the capacity to sway the outcome of the litigation under the applicable law."
Plaintiff filed a statement of undisputed facts with its motion. Defendant, however, did not file a statement of disputed facts with its objection.
In or about 1967, Norbert Coutu ("Coutu"), acting through Apple Valley Mall, Inc., assembled a large parcel of real estate adjacent to Route 44 in Smithfield, Rhode Island ("Coutu Site"). The Coutu Site was a combination of two subdivisions. Coutu filed a map, depicting the proposed use of the parcel, in the land evidence records of the town of Smithfield. The map contained restrictive language preventing the establishment of any barriers between the two subdivisions. At some point after the map was filed, Apple Valley Mall, LLC ("AVM") developed the western portion of the Coutu Site as the Apple Valley Mall.
In December 1995, The Eastborne LLC ("Eastborne") acquired ownership of lot 21A of the Coutu Site. Andrew J. Matteo ("Matteo") is the manager and sole shareholder of Eastbourne. Matteo is also Defendant's manager. In April 1997, AVM sued Eastbourne in Rhode Island Superior Court alleging trespass and slander of title. Eastbourne answered the complaint, counterclaimed and asserted that it had an easement over AVM's property. Attorney Peter J. Rotelli ("Rotelli") represented Eastbourne in the 1997 lawsuit.
On or about November 14, 1997, Eastbourne transferred title to Lot 21A to AV Realty, LLC ("AV Realty"). AV Realty subsequently also acquired Lot 21C of the Coutu Site. Matteo is also the manager of AV Realty. In February 2004, title to Lots 21A and 21C ("property") passed to Apple Valley Investment Associates ("AVIA"), a partnership. Rotelli is AVIA's general partner.
In July 2004, AVIA transferred title to the property to Defendant. Defendant obtained a $2,950,000 loan from People's Bank to acquire the property. People's Bank required Defendant to secure title insurance. Rotelli represented Defendant on both the acquisition of the property and the loan transaction.
Upon receipt of Defendant's application, on July 2, 2004, Plaintiff issued a mortgage/owner title insurance policy ("Policy") identifying Defendant as the owner/insured of the property and People's Bank as the mortgagee/insured of the property. At the time Plaintiff issued the Policy, Plaintiff was not aware of the 1997 AVM lawsuit. Both Matteo and Rotelli, however, were aware of the 1997 AVM lawsuit before the Policy was issued.
In 2005, Defendant, represented by Rotelli, commenced an action against AVM in Rhode Island Superior Court. In this lawsuit, Defendant claimed that the Coutu Site restrictive language created an easement providing Defendant with access to Route 44 through AVM's property. The disputed access rights are the subject of both the 1997 and 2005 lawsuits.
In August 2005, Defendant asserted its first claim ("Claim #1") under the Policy. In Claim # 1, Defendant alleges that the disputed access rights are interfering with its plans to develop the property. Defendant claims that, pursuant to the Policy, Plaintiff is required to provide indemnification and defense costs related to the resolution of the disputed access rights. Plaintiff, unaware of the history of the property and the pre-existing dispute between AVM and Eastbourne, agreed to represent Defendant in the 2005 lawsuit. Plaintiff has defended Defendant's interest since 2005 and has also paid counsel to prosecute the lawsuit.
In 2010, Defendant submitted a second claim ("Claim #2") under the Policy. In claim #2, Defendant alleges that Narragansett Electric Company ("NEC"), which had easements on the property long before Defendant acquired the property, would not allow Defendant to construct an access road through the NEC easements. Defendant claims that the NEC easements are preventing it from commercially developing its property, thereby rendering it useless.
The Policy contains the following language:
Plaintiffs Rule 56(a) Statement at ¶ 35.
The Policy also provides that the
The Policy also excepts from coverage several easements granted to NEC. The Policy provides that Plaintiff will "affirmatively insure that the [NEC easements] do not interfere with the beneficial use of the property."
Plaintiff contends that the policy is void
The purpose of title insurance is to protect the insured against potential losses resulting from defects in title.
The Policy excludes from coverage any "[d]efects, liens, encumbrances, adverse claims or other matters" that are "not known to [Plaintiff], not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in writing to [Plaintiff] by the insured claimant prior to the date the insured claimant became an insured under" the Policy. Plaintiffs Rule 56(a) Statement at ¶ 37. The application of this exclusion requires the existence of four distinct elements: (1) an adverse claim not known to the insurer; (2) that claim was not recorded in the public records as of July 2, 2004;
It is undisputed that (1) Plaintiff was not aware of the 1997 AVM lawsuit at the time the Policy was issued; (2) the dispute over the right of access was not recorded in land evidence records at the time the Policy was issued; (3) Defendant, through both Matteo and Rotelli, was aware of the 1997 AVM lawsuit; and, (4) Defendant did not advise Plaintiff, in writing, of the 1997 AVM lawsuit before it became an insured under the Policy. All four required elements of the exclusion have been met; consequently, the Policy clearly excludes the claim from coverage.
In the second claim under the Policy, Defendant alleges that because NEC would not allow Defendant to construct an access road through NEC easements, the easements were preventing Defendant from commercially developing the property and thus rendered the property useless. Plaintiff argues that the Policy excepts this claim from coverage. Defendant does not address this claim in its response to the motion for summary judgment.
The Policy, under the section titled "exceptions from coverage," provides that the Policy "does not insure against loss or damage (and . . . [Plaintiff] will not pay costs, attorney's fees or expenses) which arise by reason of' the NEC easements.
The unambiguous language of the Policy states that Plaintiff agrees to insure that
For the reasons stated above, Plaintiffs motion is granted. The Court finds that Claim #1 and Claim #2 are not covered under the Policy and Plaintiff has the right to discontinue its involvement in the prosecution and defense of the 2005 lawsuit. The Clerk is directed to enter judgment for the Plaintiff.
SO ORDERED.