The United States District Court for the Northern District of Ohio recently held that a title insurance company had no duty to defend its insured in a lawsuit brought by the insured’s neighbor relating to a bridge that spanned from one property to the other. See Pandora Distribution, LLC v. Ottawa OH, LLC, 2019 WL 5729932 (N.D. Ohio Nov. 5, 2019). In the case, a company owned two neighboring properties separated by railroad tracks and connected by two conveyor bridges. The company sold one property to the insured and the neighboring property to another entity. The insured’s neighbor then brought an action against the insured and the prior owner seeking to have the conveyor bridges removed. The insured sought coverage from the title insurance company, but the title insurance company denied the claim. The Court later found that the bridges were fixtures on the neighbor’s property and granted the insured summary judgment dismissing the neighbor’s claim against it. The Court also granted the title insurance company summary judgment, finding that the insured was not entitled to coverage under the title insurance policy.
The insured filed a motion for reconsideration, which the Court denied. First, the Court found that the exceptions in the title insurance policy included an exception for “a License Agreement between Grand Trunk Western Railroad Company and Philips ECG, Inc., dated December 18, 1986, relating to the elevated conveyor bridge . . . [and] an encroachment by an existing overhead bridge conveyor onto the premises in question.” The Court held that the plain language of this exception covered any claims arising from the bridges, including a claim that the bridges encroached onto the neighbor’s property. Second, the Court found that the insured’s bad faith claim was meritless. The claim was based on “an elaborate story which accuses at least four individuals of engaging in a scheme of constructive fraud beginning over ten months prior to [the insured’s] purchase,” and which was dependent on a finding that the neighbor did not own the bridges. Because the Court found that the neighbor owned the bridges, the bad faith claim was also dismissed.