Rhode Island District Court Grants Summary Judgment in Title Insurance Coverage Appeal

ByMargie D. Moore

Mar 30, 2022 , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

The United States District Court docket for the District of Rhode Island not too long ago granted a title insurance plan company’s motion for reconsideration, keeping that the insured did not undergo a loss when it shed title to two attributes on which it could not construct improvements. See IDC Homes, Inc. v. Chicago Title Ins. Co., 2021 WL 4355259 (D.R.I. 2021). The circumstance included an insured who obtained a $10 million title coverage policy when it procured a few homes that it planned to produce. As a final result of rulings from the Rhode Island Supreme Court, the insured misplaced its title in two of the parcels of land (the “South and West Units”). The insured brought a assert, which the title coverage organization denied. The insured then introduced this lawsuit, arguing that it misplaced title as effectively as its right to assemble improvements, which includes residential houses, on those parts of house. The title insurer moved for summary judgment, but the Court denied the motion, obtaining that there ended up challenges of reality as to the insured’s damages. In earning this conclusion, on the other hand, the Court did not look at the Rhode Island Supreme Court’s before dedication that the insured could not build properties on the units as enhancements.

The title insurer moved for reconsideration, and the Courtroom granted the movement. In performing so, the Court docket accepted its argument that “‘when [the insured] dropped title to the South and West Models, [the insured] did not drop an ‘improvement’ appropriate to construct new one-loved ones residences in the airspace above portions of the typical things of the Goat Island South Condominium [because] it never ever had such a proper. . . . Devoid of the potential to build improvements in the airspace that comprised the models, their economic worth is zero.’” The Court acknowledged that it experienced made a distinct error of legislation, that there was no authentic concern of content actuality, and that the title insurer was entitled to judgment as a make a difference of legislation as to coverage of the South and West models.