A California appellate court recently affirmed that an insured property owner was not entitled to coverage for a neighbor’s easement running across the insured property because the policy excepted “matters contained in” a Shared Road Maintenance Agreement, and this Agreement described the easement rights. See Beaudin v. Stewart Title Guar. Co., 2019 WL 422208 (Cal. Ct. App. Feb. 4, 2019), reh’g denied (Feb. 21, 2019), review filed (Mar. 13, 2019). In 2010, the owner of a large parcel of land subdivided it into three parcels. In November 2012 and January 2013, the owner sold two of the parcels. Each deed included an easement across the third parcel. These parties later entered into a Shared Road Maintenance Agreement through which the parties, among other things, agreed that the neighboring parcel owners would use the roadway running across the third parcel “as their exclusive point of vehicular ingress and egress for all domestic, construction and agricultural access[.]” In December 2013, the insureds purchased the third parcel and the title insurance company issued a policy. Both the title commitment and the title policy included exceptions for an “emergency access easement” along the roadway as well as “[m]atters contained in that certain document entitled ‘Shared Road Maintenance Agreement’ dated January 15, 2013, executed by Henry Turmon, Jacqueline P. Little, Recorded: February 4, 2013, as Instrument No. 2013-011809 of Official Records. Reference is hereby made to the public record for full particulars.” Neither the commitment nor the policy excepted the deeds to the neighbors that created the easement. In 2014, the insureds asserted a claim with the title insurance company, claiming that the policy only explicitly mentioned that the neighbors could use the easement for “emergency access” and failed to note that the neighbors would be regularly using the easement, as they were allowed to do based on the Shared Road Maintenance Agreement. The title insurance company denied the claim and the insureds brought this action. The trial court granted the title insurance company’s motion for summary judgment, and the insureds appealed.
On appeal the Court affirmed. It found that the policy excepted matters contained in the Shared Road Maintenance Agreement, which specifically stated that the neighbors would use the easement as their “exclusive point” of access to their property. Additionally, the insureds had been emailed a copy of the Shared Road Maintenance Agreement before purchasing the property. Although the insureds claimed they only skimmed the agreement and thought it only discussed who had to maintain the easement, “[a] party’s subjective intent cannot be used to create an ambiguity or a material factual issue. . . . No reader could review this agreement and reasonably conclude the southern easement was limited to emergency access.” Moreover, the Court rejected the insureds’ argument that the title insurer had a duty to except the deeds creating the easement, holding that the title insurer did not have “a duty to warn [the insureds] regarding the consequences of the grant deed.” Accordingly, the Court affirmed the decision.