Title: Osprey Landing, LLC v. First American Title Insurance Co.

State: maine

Issuer: Maine Supreme Court

Document:

MAINE SUPREME JUDICIAL COURT 
Reporter of Decisions 
Decision: 
2017 ME 46 
Docket: 
Lin-16-298 
Argued: 
February 7, 2017 
Decided: 
March 9, 2017 
 
Panel: 
SAUFLEY, C.J., and ALEXANDER, MEAD, GORMAN, JABAR, and HUMPHREY, JJ. 
 
 
OSPREY LANDING, LLC 
 
v. 
 
FIRST AMERICAN TITLE INSURANCE COMPANY 
 
 
JABAR, J. 
[¶1]  Osprey Landing, LLC (Osprey) appeals from a judgment of the 
Superior Court (Lincoln County, Billings, J.) granting First American Title 
Insurance Company’s (First American) motion for summary judgment and 
denying Osprey’s cross-motion for summary judgment on Osprey’s complaint 
related to a title insurance policy issued by First American.  Osprey contends 
that policy coverage was triggered when a deposition and affidavits provided 
in litigation involving Osprey and a different party in 2012 and 2013 
contained facts that Osprey alleges could constitute a potential claim for a 
public prescriptive easement over property covered by the policy.  We 
disagree and affirm. 
 
2 
I.  BACKGROUND 
[¶2]  Osprey acquired a parcel of oceanfront property in Southport, 
Maine (the property) from Osprey Perch, LLC, a company owned and 
managed by Byron Miller, and purchased a title insurance policy (the policy) 
from First American.  After transfer of the parcel, Osprey sued Thomas and 
Janet Blevins, owners of a lot abutting the property, claiming that a deeded 
easement over the Blevinses’ lot permitted passage of motor vehicles.  The 
Blevinses counterclaimed, asserting the existence of a private prescriptive 
easement over the Osprey property.  Osprey requested that First American 
defend it against the Blevinses’ counterclaim, and First American declined to 
do so.  Osprey then sought a declaratory judgment that First American had a 
duty to defend Osprey in the litigation, which the trial court granted on 
June 26, 2013.   
[¶3]  In conjunction with the Blevins litigation, Miller executed an 
affidavit in which he expressed his knowledge of a history of public use of a 
path over the property.1  In October of 2012, however, the Blevinses 
stipulated to a dismissal with prejudice of their prescriptive easement 
counterclaim.  Miller was later deposed in the ongoing discovery for Osprey’s 
                                         
1  Miller originally executed the affidavit on April 12, 2012, but did not do so under oath until 
May 14, 2012.   
 
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suit, and reiterated his knowledge of a history of public use of a path over the 
property.  
[¶4]  Following the Miller deposition, Osprey sent another request to 
First American invoking title insurance coverage, independently of the Blevins 
litigation, to “put First American on notice of” Miller’s affidavit and deposition, 
asking First American to take “appropriate action . . . to defend, vindicate and 
safeguard Osprey’s title.”  First American again declined, and procured a 
second affidavit from Miller, in which Miller stated that he asserted no claim 
to a prescriptive easement over the property, and knew of no one who could 
do so.  Osprey filed suit to enforce First American’s purported duty to defend 
and indemnify Osprey.   
[¶5]  First American moved for summary judgment as to all counts and 
Osprey filed a cross-motion for summary judgment.  On May 31, 2016, the 
Superior Court (Lincoln County, Billings, J.) granted First American’s motion, 
and denied Osprey’s cross-motion.  Osprey timely appeals.  See M.R. 
App. P. 2(b)(3).   
II.  DISCUSSION 
 
[¶6]  Osprey contends on appeal that the court erred in granting First 
American’s motion for summary judgment and denying Osprey’s cross-motion 
 
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for summary judgment.  Although Osprey parses its arguments into three 
separate issues, each is an iteration of a single issue: Osprey believes that 
Miller’s deposition and affidavits create the risk of a future public prescriptive 
easement claim adverse to Osprey’s title, and therefore, according to Osprey, 
the policy requires First American to take some action to either perfect 
Osprey’s title or compensate Osprey for this perceived title defect.  We 
disagree with Osprey that Miller’s statements have created a “triggering 
event” requiring First American to take any action, and therefore affirm the 
court’s judgment. 
 
[¶7]  Cross-motions for summary judgment do not “alter the basic 
Rule 56 standard.”  F.R. Carroll, Inc. v. TD Bank, N.A., 2010 ME 115, ¶ 8, 
8 A.3d 646.  We review de novo the grant or denial of cross-motions for 
summary judgment, “and consider both the evidence and any reasonable 
inferences that the evidence produces in the light most favorable to the party 
against whom the summary judgment has been granted in order to determine 
if there is a genuine issue of material fact.”  Grant v. Foster Wheeler, LLC, 
2016 ME 85, ¶ 12, 140 A.3d 1242 (quotation marks omitted).  Summary 
judgment is properly granted when there is no genuine issue of material fact 
 
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and the moving party is entitled to judgment as a matter of law.  M.R. 
Civ. P. 56(c); Doe v. Williams, 2013 ME 24, ¶ 10, 61 A.3d 718. 
 
[¶8]  We also review de novo the interpretation of a title insurance 
policy.  Travelers Indem. Co. v. Bryant, 2012 ME 38, ¶ 8, 38 A.3d 1267.  
We accord any unambiguous language in the policy its plain meaning.  Id. ¶ 9.  
A contract provision is only “ambiguous if it is reasonably susceptible of 
different interpretations or if any ordinary person in the shoes of the insured 
would not understand that the policy did not cover claims such as those 
brought.”  City of S. Portland v. Me. Mun. Ass’n, 2008 ME 128, ¶ 7, 953 A.2d 
1128 (quotation marks omitted). 
 
[¶9]  The language of the policy is unambiguous.  It provides that, 
subject to certain exclusions, First American will insure Osprey “against loss 
or damage . . . sustained or incurred by the insured by reason of . . . [a]ny 
defect in or lien or encumbrance on the title, [or] . . . [u]nmarketability of the 
title.”  Expressly excluded from coverage of the policy are “[d]efects, liens, 
encumbrances, adverse claims or other matters . . . resulting in no loss or 
damage to the insured claimant.”  The policy also states that “[u]pon written 
request . . . [First American] shall provide for the defense of an insured in 
litigation in which any third party asserts a claim adverse to the title or 
 
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interest as insured.”  Finally, First American “shall have the right, at its own 
cost, to institute and prosecute any action or proceeding or to do any other act 
which in its opinion may be necessary or desirable to establish the title to [the 
property], . . . or to prevent or reduce loss or damage to the insured.”  Despite 
Osprey’s contentions, the facts of this case do not trigger coverage of the 
policy. 
[¶10]  The policy only imposes an obligation on First American to 
“provide for the defense” of Osprey’s title upon Osprey’s request when a third 
party makes a claim adverse to Osprey’s title.  Although Osprey’s statement of 
material facts includes assertions of “a public right of way over” the property, 
First American denies those assertions, and there is no evidence in the 
summary judgment record to support those assertions.  Because the 
Blevinses’ counterclaim was dismissed with prejudice, there is currently no 
known claim against Osprey’s title; Osprey itself concedes that it is unaware of 
any litigation claiming the existence of a prescriptive easement over the 
property.  Osprey does not identify any cloud on its title or any other title 
defect that would implicate First American’s duty to defend.  For this reason, 
First American has no obligation to initiate legal action to clear Osprey’s title, 
or to indemnify Osprey for the asserted title defect.  See Harlor v. Amica Mut. 
 
7 
Ins. Co., 2016 ME 161, ¶ 23, 150 A.3d 793 (stating that an insurer’s duty to 
indemnify “runs to claims that are actually covered, in light of the facts 
proved” (quotation marks omitted)); N E Props., Inc. v. Chi. Title Ins. Co., 
660 A.2d 926, 927 (Me. 1995) (“The duty to defend is determined by 
comparing the allegations in the underlying complaint with the provisions of 
the insurance policy.”). 
[¶11]  Nor can Osprey identify specific “loss or damage” within the 
meaning of the policy caused by the alleged easement.  Other than the Miller 
affidavit and the Blevinses’ now-resolved counterclaim, which was dismissed 
with prejudice, Osprey does not even identify a person or group who could 
potentially assert rights to a prescriptive easement over the property.  Any 
encumbrance on the title is therefore merely hypothetical, as is any loss or 
damage due to the hypothetical encumbrance.    
 
[¶12]  Nonetheless, Osprey contends that the alleged potential title 
defect triggers coverage because “the fact that no individual person has 
asserted a public prescriptive easement claim does not eliminate the potential 
loss or damage to Osprey.”  Even assuming that the policy covers a potential 
loss, rather than an identifiable loss due to a title defect, section 4(b) of the 
policy provides that First American “shall have the right, at its own cost, to 
 
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institute and prosecute any action or proceeding . . . to prevent or reduce loss 
or damage to the insured.”  Because there is no pending litigation, this is the 
only provision of the policy that might obligate First American to defend 
Osprey’s title, and the policy vests the right to initiate preemptive legal action 
in First American. 
 
[¶13]  Thus, the policy—in light of Osprey’s assertion that there may be 
a potential future claim of a public prescriptive easement over the property—
gives First American the right to prosecute any action First American believes 
necessary.  No obligation is imposed on First American under these 
circumstances to preemptively indemnify Osprey Landing despite the lack of 
proof of the existence of an easement or litigation claiming one.  See also 
N. Sec. Ins. Co. v. Dolley, 669 A.2d 1320, 1322 (Me. 1996) (noting that an 
insurer cannot pre-litigate the issue of indemnity before fulfilling its duty to 
defend). 
 
[¶14]  We have never before held that the mere possibility of future 
claims for public easements renders title unmarketable, and will not do so 
here.  Other courts have rejected landowners’ claims against title insurers 
where there was merely a possibility that a future lien or encumbrance might 
affect title to the property, reasoning that economic unmarketability of a 
 
9 
property is not the same thing as unmarketability of title.  See Chi. Title Ins. Co. 
v. Investguard, 449 S.E.2d 681, 682 (Ga. Ct. App. 1994); Chi. Title Ins. Co. v. 
Kumar, 506 N.E.2d 154, 156-57 (Mass. App. Ct. 1987); Rood v. Commonwealth 
Land Title Ins. Co., 936 A.2d 488, 497 (Pa. Super. Ct. 2007).  Even if economic 
unmarketability were covered by the policy, Osprey has failed to demonstrate 
that the property has become less valuable, let alone unmarketable.  
[¶15] 
 
Despite 
Osprey’s 
assertions, 
there 
are 
currently 
no 
encumbrances and no claims adverse to Osprey’s title to trigger coverage of 
the policy.  If we were to hold that a title becomes unmarketable merely 
because there is a possibility that a claim for an easement could be brought in 
the future, an untold quantity of titles across the state would subsequently 
become unmarketable, resulting in uncertainty of ownership and a profusion 
of litigation.  For the above reasons, we affirm. 
The entry is: 
Judgment affirmed.  
 
 
 
 
 
 
 
 
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Jeffrey T. Edwards, Esq. (orally), Preti Flaherty Beliveau & Pachios, LLP, 
Portland, for appellant Osprey Landing, LLC 
 
Paul F. Driscoll, Esq., and James D. Poliquin, Esq. (orally), Norman, Hanson & 
DeTroy, LLC, Portland, for appellee First American Title Insurance Company 
 
 
Lincoln County Superior Court docket number CV-2014-1 
FOR CLERK REFERENCE ONLY