United States District Court, N.D. Indiana, Fort Wayne Division
BETH C. SCHRAM, et al., Plaintiffs,
FIDELITY NATIONAL TITLE INSURANCE COMPANY, successor by merger to Lawyers Title Insurance Corporation, Defendant.
OPINION AND ORDER
Collins, United States Magistrate Judge.
Beth C. Schram and P.T. Schram (together, “the
Schrams”) filed this suit against Defendant Fidelity
National Title Insurance Company, successor by merger to
Lawyers Title Insurance Corporation (“FNTIC”),
concerning a title insurance policy issued to the Schrams by
Lawyers Title Insurance Corporation (“Lawyers
Title”). (DE 38). The Schrams assert that FNTIC had
a duty to defend them in a suit filed by their neighbor, who
asserted the existence of an easement on the Schrams'
land. The Schrams seek a declaratory judgment concerning
FNTIC's duty to defend and advance claims for breach of
contract and breach of the duty of good faith and fair
dealing against FNTIC.
before the Court are the parties' cross motions for
partial summary judgment (DE 54; DE 68), each seeking
judgment as a matter of law on the Schrams' claims for
breach of contract and declaratory judgment. The motions are
ripe for ruling. (DE 55; DE 65; DE 69; DE 70; DE 71; DE 72;
DE 76). For the following reasons, the Schrams' motion
for partial summary judgment will be GRANTED, and FNTIC's
motion for partial summary judgment will be DENIED.
FACTUAL AND PROCEDURAL BACKGROUND
about May 2, 2007, the Schrams obtained a policy of title
insurance, No. 700702177 (the “Policy”), from
Lawyers Title for certain real property owned by the Schrams
in Churubusco, Indiana. (DE 55-1 at 4-11; DE 70-1 at 29-36).
The parties do not dispute that FNTIC is the successor in
interest to Lawyers Title for purposes of the Policy and this
Policy generally indemnifies against losses sustained by
reason of defects in title. (DE 55 at 9). Specifically, the
Policy states, in relevant part:
SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM
COVERAGE CONTAINED IN SCHEDULE B AND THE CONDITIONS AND
STIPULATIONS, LAWYERS TITLE INSURANCE CORPORATION, a Virginia
corporation, herein called the Company, insures, as of the
Date of Policy shown in Schedule A, against loss or damage,
not exceeding the Amount of Insurance stated in Schedule A,
sustained or incurred by the insured by reason of:
1. Title to the estate or interest described in Schedule A
being vested other than as stated therein;
2. Any defect in or lien or encumbrance on the title;
3. Unmarketability of the title;
4. Lack of a right of access to and from the land.
The Company will also pay the costs, attorneys' fees and
expenses incurred in defense of the title, as insured, but
only to the extent provided in the Conditions and
(DE 55-1 at 5; DE 70-1 at 30).
respect to the “Exclusions from Coverage” portion
of the Policy, that section reads, in relevant part:
following matters are expressly excluded from the coverage of
this policy and the Company will not pay loss or damage,
costs, attorneys' fees or expenses which arise by reason
. . . .
3. Defects, liens, encumbrances, adverse claims or other
(a) created, suffered, assumed or agreed to by the insured
(b) not known to the Company, not recorded in the public
records at Date of Policy, but known to the insured claimant
and not disclosed in writing to the Company by the insured
claimant prior to the date the insured claimant became an
insured under this policy;
(c) resulting in no loss or damage to the insured claimant;
(d) attaching or created subsequent to Date of Policy; or
(e) resulting in loss or damage which would not have been
sustained if the insured claimant had paid value for the
estate or interest insured by this policy.
(DE 55-1 at 5; DE 70-1 at 30).
the “Schedule B Exceptions from Coverage” portion
of the Policy identifies 19 exceptions from coverage.
Relevant to this dispute is Exception No. 2, “Easements
or claims of easements not shown by the public records[,
]” and Exception No. 4:
Defects, liens, encumbrances, adverse claims or other
matters, if any, created, first appearing in the public
records or attaching subsequent to the effective date hereof
but prior to the date the Proposed Insured acquires for the
value of record the ...