Daily Development for
Tuesday, April 28, 1998
by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
TITLE INSURANCE; COVERAGE; EASEMENTS: Title insurance policy that states that its coverage is limited to "land," which the policy states "does not include any property behond the lines of the area described [in the legal description of the insured parcel] nor any right, title, interest, estate or easement in abutting streets, . . . " does not insure the landowner's interest in an implied easement benefitting the property that is not necessary for access to a public street.
Haystad v. Fidelity Nat. Title Ins. Co., 66 Cal. Rptr. 2d 487 (Cal. App. 1997).
The property owner had been using an area marked on the plat as "not a public street" to get access to one of two contiguous lots that they had acquired in one transaction. The owner of that area sued them in trespass, and landowners tendered the defense to the title company, which declined the defense. Later, the insureds prevailed in the defense of their easement rights, apparently on the grounds that the easement was implied in the plat. They then sued the title company for the costs of defense, but the trial court granted summary judgment for the insurance company.
On appeal: held: Affirmed. The plain language of the policy indicated that there was no coverage for anything but the title to the described interests.
The court noted that the policy also indicated that it insured against loss of access to a public right of way, but that the landowner had access to the public right of way by crossing from one parcel over its adjacent parcel.
Comment 1: There is a lesson here for lawyers working with parties who believe that they do get coverage of the various appurtenances associated with the parcel they are purchasing. Although the editor is unsure of California title practices in this area, one assumes that an endorsement would have been available if the insured had noted a special concern about the access area. There is reason to believe that the insured should have had a special concern, as the access way was fenced off when the insured acquired the property.
Comment 2: The editor is less comfortable with the ramifications of the conclusion that the insured had no coverage based upon the "access to a public way" conclusion. In this case, the insureds admitted in discovery that the two lots they bought constituted a single buildable parcel, and therefore it seems appropriate to conclude that where one of the two lots abuts a public way, there is access. But what if the lots, although bought together and described together in the title policy, actually constituted two severable parcels. Wouldn't it be reasonable to conclude that if the parcels are capable of standing alone, then the insurer is insuring that each of them have access to the street?
The editor would not go so far as to conclude that a policy should be read as insuring that every single lot in a parcel subdivided after the policy is issued has access. But where, as here, the lots have already been created at the time the policy is issued, it seems likely that a purchaser believes that an apparent private access way to a public street benefitting one of the parcels is covered by the "access" language of the policy, even if the other parcel has separate access. The editor reserves judgment as to what might be the case if there was no apparent access to one of the parcels other than across the adjacent lot.
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