IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

NATIONWIDE LIFE INSURANCE :

COMPANY, :

: CIVIL ACTION

Plaintiff, : NO. 05-00281

:

v. :

:

COMMONWEALTH LAND TITLE :

INSURANCE COMPANY, :

:

Defendant. :

MEMORANDUM

BUCKWALTER, S. J. April 26, 2006

Presently before the Court are Plaintiff’s Motion for Reconsideration and

Amendment of the Order Dismissing this Action (Docket No. 10), Defendant’s Motion to Strike

the Factual Allegations Contained in Plaintiff’s Motion for Reconsideration (Docket No. 12),

Defendant’s Response in Opposition (Docket No. 13), Plaintiff’s Consolidated Memorandum of 

Law Reply in Support of its Motion for Reconsideration and Amendment of the Order

Dismissing this Action and in Opposition to Defendant’s Motion to Strike Evidence of

Defendant’s Own Interpretation of the Insurance Policy that it Issued (Docket No. 14),

Defendant’s Reply in Support of its Motion to Strike (Docket No. 15), and Defendant’s

Supplemental Memorandum in Opposition to Motion for Reconsideration and in Further Support

Case 2:05-cv-00281-RB Document 18 Filed 05/03/06 Page 1 of 7
1. The Court denies Defendant’s Motion to Strike as moot. By an order dated January 4, 2006, the Court granted

in part and denied in part Defendant’s original Motion to Strike. Even if the Court were to consider the evidence that

survived the Court’s January 4, 2006 Order, the Court would still deny Plaintiff’s Motion for Reconsideration.

2. A more detailed discussion of the Declaration can be found in the Court’s October 19, 2005 opinion. (Docket

No. 9.)

2

of Motion to Strike (Docket No. 17). For the reasons discussed below, Plaintiff’s Motion for

Reconsideration is denied.1

I. FACTS AND PROCEDURAL HISTORY

Previously, Plaintiff made a claim under the ALTA 9 Endorsement of a title

insurance policy (the “Policy”) issued by Defendant. Plaintiff argued that the Declaration of

Restrictions (the “Declaration”) entered into by Plaintiff’s predecessor in interest2 contains a

right of first refusal and/or an option to purchase. According to Plaintiff, coverage for an option

to purchase and right of prior approval exists under the ALTA 9 Endorsement of the Policy. 

Defendant denied Plaintiff’s claim for coverage. Plaintiff subsequently filed a declaratory

judgment action seeking a declaration as to coverage and liability under the Policy. 

 In a Memorandum dated October 19, 2005, this Court granted Defendant’s

Motion to Dismiss Plaintiff’s Complaint. (Docket No. 9.) The Court found that “[t]he ALTA 9

Endorsement provides coverage for an instrument referred to in Schedule B, if that instrument

provides for an option to purchase, a right of first refusal, or the prior approval of a future

purchaser or occupant, unless that instrument is expressly excepted in Schedule B.” (emphasis in

original). The Court noted that the document at issue in this case, the Declaration, is listed on

Schedule B, Part I, and therefore, it is “referred to in Schedule B.” For purposes of the Motion to

Dismiss, the Court assumed, without deciding, that the Declaration contains an option to

purchase, a right of first refusal, or the prior approval of a future purchaser or occupant. Finally,

Case 2:05-cv-00281-RB Document 18 Filed 05/03/06 Page 2 of 7
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the Court found that the Declaration was “expressly excepted in Schedule B,” and therefore,

Plaintiff was not afforded coverage for its claim under the ALTA 9 Endorsement.

The parties disputed the meaning of “expressly excepted in Schedule B.” Plaintiff

argued that the language “expressly excepted from the coverage afforded by the ALTA 9

endorsement” was necessary to except an item from coverage. The Court rejected this argument

and found that the Declaration was “expressly excepted in Schedule B” because: (1) Schedule B,

Part I, under which the Declaration is listed, is titled “Exceptions from Coverage;” and (2)

Schedule B, Part I states that the “policy does not insure against loss or damage . . . which arise

by reason of” several items, including the Declaration. The Court adopted Defendant’s

explanation that Schedule B, Part II is covered under the ALTA 9 Endorsement, because: (1) the

heading “Exceptions from Coverage” does not appear over Schedule B, Part II, as it does over

Schedule B, Part I, and (2) the language preceding Part II indicates that the items listed in Part II

are not exceptions from coverage (“the Company insures that these matters are subordinate to the

lien or charge of the insured mortgage upon the estate or interest”). 

Plaintiff then filed a Motion for Reconsideration and Amendment of the Order

Dismissing this Action which is presently before the Court.

II. STANDARD OF REVIEW

Local Rule of Civil Procedure 7.1(g) allows a party to make a motion for

reconsideration. “The purpose of the motion for reconsideration is to correct manifest error of

law or fact or to present newly discovered evidence.” Harsco Corp. v. Zlotnicki, 779 F.2d 906,

909 (3d Cir. 1985). Motions for reconsideration are granted sparingly. Cont’l Cas. Co. v.

Diversified Indus., Inc., 884 F. Supp. 937, 943 (E.D. Pa. 1995). District courts should grant a

Case 2:05-cv-00281-RB Document 18 Filed 05/03/06 Page 3 of 7
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party’s motion for reconsideration in only three situations: “(1) the availability of new evidence

not previously available, (2) an intervening change in controlling law, or (3) the need to correct a

clear error of law or to prevent manifest injustice.” Yang v. Astra Zeneca, No. 04-4626, 2005

U.S. Dist. LEXIS 18567, at *2 (E.D. Pa. Aug. 29, 2005) (quoting New Chemic (U.S.), Inc. v.

Fine Grinding Corp., 948 F. Supp. 17, 18-19 (E.D. Pa. 1996)). 

III. ANALYSIS

Plaintiff makes two arguments in its Motion for Reconsideration. First, Plaintiff

argues that the Court incorrectly held that Schedule B, Part II does not list exceptions to policy

coverage. Plaintiff argues that the items listed in Part II are exceptions to coverage just as the

items listed in Part I are exceptions, but that the exceptions listed in Part II are subordinate to the

insured mortgage. The Court finds that even if Schedule B, Part II does list exceptions to

coverage, as Plaintiff contends, the Court would still conclude that the items listed in Schedule

B, Part I, including the document at issue in this case, the Declaration, are exceptions from

coverage. Whether Schedule B, Part II is read as listing exceptions to coverage or not would not

change the Court’s interpretation of Schedule B, Part I and thus its conclusion regarding the

Declaration. But, the Court notes that it does interpret Schedule B, Part II as containing

information relating to prioritization of liens and not exceptions to coverage, as suggested in our

original opinion.

Second, Plaintiff argues that under the Policy, “the phrase ‘unless expressly

excepted on [sic] Schedule B’ requires a description of the specific easement, lien, private

charge, option or right. Merely listing the instrument in which such a defect is found is not

sufficient.” (Pl.’s Mot. Recons. at 11 n.9.) (emphasis in original). In sum, Plaintiff’s position is

Case 2:05-cv-00281-RB Document 18 Filed 05/03/06 Page 4 of 7
3. Defendant maintains that this information is not from its website “but rather from a wholly separate corporate

entity, LandAmerica Financial Group.” (Def.’s Supp. Mem. at 1 n.1.)

5

that “it is the absence of a description on Schedule B that affords coverage, not the addition of

language in Part II of Schedule B. The Court held that language must be added to Schedule B,

Part II to afford ALTA coverage. This was clear legal error.” Id. at 11. In making this

argument, Plaintiff relies on the following language from Defendant’s website:3

Paragraph 1(b)(2) insures the lender that a document, described only

as containing restrictions, doesn’t contain a grant of an easement, a

lien for liquidated damages, a private charge or assessment, an option,

a right of first refusal or a right for prior approval of a future

purchaser or occupant . . . . Paragraph (1)(b)(2) is found under

paragraph 1(b) because an exception that fully describes the features

of a document kills the coverage. . . . If the exception has incomplete

disclosure, the lender must review all of the recorded documents for

an opinion that none contains a provision that might harm it.

(Pl.’s Mot. Recons. Aff. Aaron Stock ¶ 7.) (emphasis in original).

In response, Defendant makes two arguments. First, in reference to the first

sentence of the above quoted material, Defendant correctly points out that the Declaration is not

described as containing only restrictions. Therefore, Defendant does not insure Plaintiff, the

lender, that the Declaration is free of options, rights of first refusal or rights for prior approval of

a future purchaser or occupant. Second, in reference to the last sentence of the above quoted

material, Defendant claims that it was Plaintiff’s duty to exercise proper diligence before issuing

the subject mortgage. Therefore, even if the Declaration is considered an “incomplete

disclosure,” the Court agrees with Defendant that Plaintiff bore the burden of completing proper

diligence.

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IV. CONCLUSION

For the reasons stated above, Plaintiff’s Motion for Reconsideration and

Amendment of the Order Dismissing this Action is denied. An appropriate order follows.

Case 2:05-cv-00281-RB Document 18 Filed 05/03/06 Page 6 of 7
IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

NATIONWIDE LIFE INSURANCE :

COMPANY, :

: CIVIL ACTION

Plaintiff, : NO. 05-00281

:

v. :

:

COMMONWEALTH LAND TITLE :

INSURANCE COMPANY, :

:

Defendant. :

ORDER

AND NOW, this 26th day of April, 2006, upon consideration of Plaintiff’s Motion for

Reconsideration and Amendment of the Order Dismissing this Action (Docket No. 10), Defendant’s

Motion to Strike the Factual Allegations Contained in Plaintiff’s Motion for Reconsideration

(Docket No. 12), Defendant’s Response in Opposition (Docket No. 13), Plaintiff’s Consolidated

Memorandum of Law Reply in Support of its Motion for Reconsideration and Amendment of the

Order Dismissing this Action and in Opposition to Defendant’s Motion to Strike Evidence of

Defendant’s Own Interpretation of the Insurance Policy that it Issued (Docket No. 14), Defendant’s

Reply in Support of its Motion to Strike (Docket No. 15), and Defendant’s Supplemental

Memorandum in Opposition to Motion for Reconsideration and in Further Support of Motion to

Strike (Docket No. 17), it is hereby ORDERED that Plaintiff’s Motion for Reconsideration is

DENIED.

In addition, Defendant’s Motion to Strike is DENIED as MOOT.

BY THE COURT:

 s/ Ronald L. Buckwalter, S. J. 

 RONALD L. BUCKWALTER, S.J.

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