Opinion ID: 2320469
Heading Depth: 1
Heading Rank: 6

Heading: Comparison of the Insurance Policy and the Allegations of the Complaint

Text: Mr. Stevens contends that an examination of the policy exclusions and the allegations of the complaint reveals a potential conflict if the policy deems United General to possess knowledge of the contents of public records of the District of Columbia. . . . The conflict would become apparent because the District's public records show that Mr. and Mrs. Moy held only a promissory note secured by a first deed of trust on the property which was then owned in fee simple by Martin and Betty Shin, and would show, further, that no foreclosure on the Moy note had occurred. [8] In light of such records, Mr. Stevens could not have purchased the property from Mr. Moy, and there was no fraudulent conveyance. Therefore, a possibility existed that the 1438 E Street claim would fall within the coverage of Mr. Stevens' policy. In response to Mr. Stevens' argument, United General compares the allegations of the complaint with the words of the exclusions set forth in Paragraphs 3(a) and 3(b) of the policy. The results of this comparison show that the allegations of the 1438 E Street complaint fall within the words of the policy exclusion, thus negating United General's duty to defend. Although some courts have held the language of Paragraph 3(a) to be ambiguous, the words created . . . by the insured claimant generally have been defined to reflect conscious and deliberate or intentional conduct. See American Sav. & Loan Ass'n v. Lawyers Title Ins. Corp., 793 F.2d 780, 784 (6th Cir.1986) (The term `created' has generally been construed to require a conscious, deliberate and sometimes affirmative act intended to bring about the conflicting claim, in contrast to mere inadvertence or negligence.) (citations omitted). The allegations of the 1438 E Street complaint clearly specify intentional, conscious and deliberate conduct by Mr. Stevens. Thus, the allegations of the complaint cannot be construed reasonably to show mere inadvertence or negligence on the part of Mr. Stevens. [9] Only by going outside the four corners of the complaint, and considering extrinsic evidence, is it possible to interpret the complaint in a manner favorable to Mr. Stevens. However, since the ordinary meaning of the words of the complaint show intentional and deliberate conduct on Mr. Stevens' part, extrinsic evidence is not permitted. See Travelers Indem. Co. of Ill., supra, 770 A.2d at 985, 986. With respect to Paragraph 3(b) of the policy exclusions, relating to matters not known to [United General], nor recorded in the public records at Date of Policy . . . ., the details of Mr. Stevens' efforts to acquire the 538 3rd Street, N.E. property are not recorded in the public records. The fact that there was information in the public records (specifically the deed of trust which secured the promissory note held by Mr. Moy and his wife) which, with additional investigation, would have enabled United General to reconstruct details about Mr. Stevens' acquisition of the Third Street property is irrelevant to the application of an unmodified eight corners rule. In short, under the application of the traditional eight corners rule, Mr. Stevens cannot prevail on his assertion that United General had a duty to defend him against the 1438 E Street lawsuit.