Opinion ID: 1963952
Heading Depth: 1
Heading Rank: 11

Heading: Tudor's Duty to Defend and Indemnify

Text: We first address Mortgage Express' argument that the district court erred in finding that the Tudor policy does not provide coverage because Mortgage Express had knowledge of the negligent act giving rise to Village's claim, as our resolution of this issue is dispositive of this appeal concerning Tudor. Tudor alleges, among other things, that its claims-made policy does not provide coverage because Mortgage Express had knowledge of circumstances likely to give rise to a claim prior to the effective date of the Tudor policy. [15,16] An insurance policy is a contract between the insurance company and the insured. [16] As such, the insurance company has the right to limit its liability by including those limitations in the policy definitions. [17] If those definitions are clearly stated and unambiguous, the insurance company is entitled to have those terms enforced. [18] [17] Mortgage Express submitted its application for renewal of errors and omissions liability insurance on March 4, 2003. The Tudor policy declarations page shows that the renewal policy period became effective on April 20, 2003, through April 20, 2004. A condition precedent to coverage under the Tudor policy is that the insured have no knowledge prior to the effective date of the policy of the actual or alleged negligent act, error, omission, or circumstance likely to give rise to a claim. In this case, Mortgage Express clearly had knowledge of its alleged negligent act giving rise to Village's claims prior to the effective date of the Tudor policy. Mortgage Express became aware of the error, at the very latest, on March 4, 2003, as evidenced by the letter from Mortgage Express' counsel to Village's counsel. Mortgage Express argues that it did not have reason to know of the claims and that the letter was merely sparring between attorneys. [19] We find this argument unpersuasive. The letter clearly and definitely expressed the intentions of Mortgage Express to settle the dispute with Village in court. Moreover, the letter specifically acknowledged receiving notice of Village's intent to amend its complaint, including a request for sanctions and asserting slander of title against Mortgage Express. There is no genuine issue as to the fact Mortgage Express was unaware, prior to the effective date of the Tudor policy, of the circumstances leading up to the claims asserted in Village's amended complaint. Therefore, the Tudor policy does not provide coverage for the defense sought by Mortgage Express. Accordingly, we conclude that the district court properly entered summary judgment in favor of Tudor. We note Mortgage Express' argument that because it was covered under the prior Tudor policy at the time it became aware of the claims asserted in the amended complaint, Tudor was not prejudiced by Mortgage Express' failure to give reasonable notice. This argument is misplaced because our conclusion is that Mortgage Express failed to meet a condition precedent to coveragethat it had no knowledge prior to the effective date of the renewal policy of the circumstances giving rise to the amended complaint. Our conclusion that there is no coverage under the Tudor policy because Mortgage Express was aware of its negligent act giving rise to Village's claim prior to the effective date of the Tudor policy is dispositive of this appeal regarding claims against Tudor. Therefore, we need not address Mortgage Express' remaining assignments of error regarding coverage under the Tudor policy. [20]