Maryland Court of Special Appeals Holds Right of Access Provision in Title Policy Does Not Include Vehicular Access

The Maryland Court of Special Appeals recently reversed a lower court and held that a right of access provision in a title insurance policy ensures only legal access and does not include reasonable or vehicular access. See Chicago Title Insurance Co. v. Allynnore N. Jen, 2021 WL 286073 (Md. Ct. Spec. App. Jan. 28, 2021). In Allynnore, plaintiffs purchased real property and obtained a title insurance policy from defendant. The property was located between two public roads and contained a shared driveway with the neighboring lot, which provided the only vehicular access to plaintiffs’ property. Plaintiffs and the owners of the neighboring lot, the Bulls, disputed whether plaintiffs were permitted to drive on the Bulls’ paved portion of the driveway. After the dispute, the Bulls constructed a fence on the driveway to prevent access. Plaintiffs subsequently filed suit seeking an injunction and the Bulls filed a counterclaim for unjust enrichment and defamation.  The unjust enrichment claim arose from plaintiffs’ use of the Bulls’ driveway.  Thereafter, plaintiffs filed a claim with defendant under the policy provision protecting against a “lack of a right of access.” Defendant denied coverage and plaintiffs’ requests for reconsideration, and plaintiffs subsequently filed a complaint with the Maryland Insurance Administration (“MIA”).

After an investigation, an MIA Enforcement Officer issued a determination letter directing defendant to cover plaintiffs’ claim. Defendant then requested a hearing, in which the Insurance Commissioner relied on expert testimony that the policy language insuring against a “lack of a right of access to and from the land” did not include or equate to vehicular access and reversed the Enforcement Officer’s decision, but still found that the defendant was required to defend the unjust enrichment counterclaim.  Both parties filed a petition for judicial review in the Circuit Court for Baltimore County, which reversed the determination of the Insurance Commissioner and remanded the case to the MIA to reinstate the initial determination letter directing defendant to cover plaintiffs’ claim.

On appeal, the Maryland Court of Special Appeals reversed and remanded with instructions to affirm the Insurance Commissioner’s decision. First, the Court found that the right of access provision in the policy did not equate to reasonable access nor vehicular access. Further, the Court agreed with defendant’s argument that “any access suffices to satisfy the definition of a right of access.” The Court further noted that if plaintiffs wanted insurance covering vehicular access, there is a separate endorsement for such coverage they could have purchased from defendant. Without this particular endorsement, or another endorsement requiring a survey, defendant was not obligated to perform a survey of the property and thus, defendant was not required to insure against a condition of which they had no notice, nor a reason to have such notice. Second, the Court found that defendant’s failure to provide a defense against the Bulls’ counterclaim was arbitrary and capricious and thus, a violation of Md. Code Ann. § 27-303(2). The policy provided that “the Company will also pay costs, attorneys’ fees and expenses incurred in the defense of this title, as insured, but only to the extent provided in the Conditions and Stipulations.” The Bulls’ counterclaim alleged unjust enrichment for plaintiffs’ use of the driveway, which included a small portion owned by plaintiffs.  “Inasmuch as this counterclaim could potentially interfere with the [plaintiffs'] use of their own property, there was substantial evidence to find that the failure to provide a defense under the lack of right of access provision was arbitrary and capricious and a violation of Ins. § 27-303(2).”

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com, Michael Crowley at mcrowley@riker.com, Desiree McDonald at dmcdonald@riker.com, or Andrew Raimondi at araimondi@riker.com.