The New York Supreme Court, Kings County, recently dismissed a complaint against a title insurance company, finding that the encroachments at issue were disclosed in a survey and barred by the policy’s Exclusion 3(a). See 1267 Rogers Ave., LLC v. First Am. Title Ins. Co., 67 Misc. 3d 1241(A) (N.Y. Sup. Ct. 2020). In April 2014, the owner of the subject property entered into a lease agreement for a property in Brooklyn. In September 2014, the owner also obtained a title insurance policy from defendant. The policy attached a survey that described a number of encroachments. In 2015, the adjacent property owner brought an action against the insured seeking easements by implication over certain areas of the insured property, as well as an injunction that the insured could not block a door on the boundary between the properties. The insured sent a claim letter to the title insurance company, who denied the claim. The insured then brought this action alleging that defendant breached the policy, and seeking contribution for fees the insured paid in the action against the neighbor. The title insurance company moved to dismiss.
The Court granted the title insurance company’s motion based on the documentary evidence. The Court found that the insured was not entitled to coverage for three reasons. First, the policy included an exception for parties in possession, which includes easements implied by law. Second, the survey attached to the policy specifically excepted certain encroachments, including those at issue in the insured’s litigation against the neighbor. Third, the Court found that the claims were excluded by Exclusion 3(a) of the policy, which excludes defects “created, assumed or agreed to,” by the insured, and that the insured was aware of the encroachments both because of the survey and through visual inspection of the property. Finally, the Court also dismissed the contribution claim, finding that the insured’s damages “do not sound in tort” and that the policy states that “any claim of loss or damage that arises out of the status of the [t]itle or by any action asserting such claim shall be restricted to this policy.”