Tenth Circuit Holds That Revocable Access to Property Sufficient Under Title Insurance Policy

The United States Court of Appeals for the Tenth Circuit recently affirmed a lower court’s grant of summary judgment to a title insurer and held that a parcel with a 30-year revocable right-of-way is not unmarketable and that the policy does not ensure a permanent right of access.  See Fid. Nat'l Title Ins. Co. v. Woody Creek Ventures, LLC, 2016 WL 3997434 (10th Cir. July 26, 2016).  In the case, the insured purchased two lots under the assumption that it had a legal right to access the more remote lot via a roadway across a third party’s property.  When the insured prepared to sell the property, however, it learned that it did not have a legal right to use the roadway to access the property and filed a claim with the title insurer.  The title insurer instituted a quiet title action against the third-party owner to obtain an easement, and the insurer and third-party owner settled the case with the third-party owner granting a 30-year revocable right-of-way to the insured.  After the insured claimed that it was entitled to permanent access under the policy, the title insurer filed a declaratory judgment action and moved for summary judgment.  The district court granted the insurer’s motion, and the insured appealed, arguing that it was entitled to permanent access to the property and that the lack thereof rendered title unmarketable.  On appeal, the Tenth Circuit affirmed the decision.  First, it held that the policy only insures a “right of access to and from the land” but does not require that this access is permanent.  Second, it held that there was no issue with the marketability of title because of the lack of permanent access.  Although the court acknowledged that the access issue might lessen the economic marketability of the property, it does not affect the property’s title.

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com