Pennsylvania Court Affirms That Title Insurer Did Not Have Duty to Defend Owner in Quiet Title Action

The Superior Court of Pennsylvania recently affirmed a decision granting a title insurer summary judgment on the issue of whether it was obligated to defend and indemnify its insured owners in a quiet title action.  See Stewart Title Guar. Co. v. McClain, 2016 WL 1436613 (Pa. Super. Ct. Apr. 12, 2016).  In the case, the insureds purchased a property that previously had been consolidated from two lots into one.  The legal description in the title commitment, policy, deed and mortgage, however, only described one of the previous lots.  The insureds later defaulted on their mortgage and, during the foreclosure action, both the lender and the insureds realized the mistake in the legal description.  The foreclosing lender then filed a quiet title action seeking a reformation of the deed and mortgage, and consolidated it with the foreclosure action.  The insureds then sought coverage under their title insurance policy.  The title insurer denied the claim and instituted an action seeking a declaratory judgment that it was not obligated to defend or indemnify the insureds in the quiet title action.  The parties cross-moved for summary judgment, and the lower court granted the insurer’s motion.  On appeal, the Superior Court affirmed.  It held that the quiet title action sought to increase the size of the insured’s property to comport with their expectations when they purchased it, which is not “a claim adverse to the title or interest as insured.”  Therefore, because there was no adverse claim to title, the insurer had no obligation to defend and indemnify under the policy.

For a copy of the decision, please contact Michael O’Donnell at