NE Properties, Inc. v. Chicago Title Ins. Co.
| Decision Date | 07 July 1995 |
| Citation | 660 A.2d 926 |
| Parties | N E PROPERTIES, INC. v. CHICAGO TITLE INSURANCE CO. |
| Court | Maine Supreme Court |
James D. Poliquin (orally), Norman, Hanson & DeTroy, Portland, for plaintiff.
Joel C. Martin (orally), Petruccelli & Martin, Portland, for defendant.
Before WATHEN, C.J., and ROBERTS, GLASSMAN, CLIFFORD, and RUDMAN, JJ.
Plaintiff N E Properties, Inc. appeals from an order of the Superior Court (Cumberland County, Saufley, J.) granting a summary judgment in favor of defendant Chicago Title Insurance Company (Chicago Title). N E Properties' claims result from the alleged failure of Chicago Title to fulfill its duty to defend and indemnify pursuant to a title insurance policy on property used as a country club. Plaintiff contends that Chicago Title had a duty to defend actions brought by residents of a development who purportedly held lifetime membership in the Country Club. Plaintiff argues that a summary judgment was improperly granted on its breach of contract claim and on its allegations of unfair claims practice and negligence. Finding no error, we affirm the judgment.
The facts in this case are complex but undisputed. N E Properties is the former owner and developer of Highlands Point Subdivision. In conjunction with that development, N E Properties created the Bridgton Highlands Country Club (the Country Club), a golf and tennis club. When ownership of the Highlands Point lots was transferred to individual purchasers, the deeds from N E Properties provided that the conveyances included "the appurtenances, benefits and entitlements set forth in a Declaration of Protective Covenants (Declaration) by N E Properties dated January 5, 1983, and recorded in the Cumberland County Registry of Deeds." The Declaration included covenants that were to run with the land and purported to provide the owners of each lot with a lifetime membership in the Country Club. At the time the Declaration was recorded, N E Properties owned both Highlands Point Subdivision and the Country Club.
After the conveyances to individual lot owners, N E Properties granted a mortgage on the Country Club to Casco Northern Bank NA (Casco), as security for a $3,000,000.00 loan. As part of the mortgage transaction, N E Properties purchased an owner's title insurance policy from Chicago Title. The policy did not reference the Declaration. N E Properties subsequently experienced financial difficulties that resulted in Casco foreclosing on the Country Club property. Prior to the foreclosure sale, Casco sent a letter to the lot owners stating that the Country Club property would be "sold free and clear of any interest the [owners] may have in the mortgaged premises, including, without limitation, any rights the .. lot owners may have to membership in the golf course on the mortgaged real estate."
Shortly after that notification, some of the owners filed a complaint in the Superior Court against Casco and N E Properties, seeking a declaratory judgment that the membership rights set out in the Declaration ran with the land, that Casco could not extinguish those rights through a foreclosure sale, and that any purchaser of the Country Club would take subject to those rights. Ultimately, the parties reached an agreement whereby the property was sold at auction subject to whatever rights the lot owners might have.
One full year after the original complaint was filed, the lot owners amended their complaint to add a count against N E Properties for damages in the event that it was found that the golf club membership rights did not run with the land. N E Properties then notified Chicago Title of the amended claim against it, and Chicago Title requested all documents relating to that action. N E Properties responded by offering to provide the documents as soon as it received assurance that a particular attorney would not be assigned to represent N E Properties. No such assurance was ever offered and N E Properties provided no further documents to Chicago Title. Six months later, N E Properties obtained a release of liability from the lot owners in return for a payment in cash and property. The declaratory judgment action against Casco's successor remains unresolved. Two days after the settlement, Chicago Title informed N E Properties that it would not defend the claim.
N E Properties brought the present action against Chicago Title asserting breach of contract, unfair claims practice, and negligence in drafting the legal description of the Country Club property. On cross motions for a summary judgment, the Superior Court entered a judgment in favor of Chicago Title. N E Properties appeals.
We review a trial court's order granting a summary judgment for error of law....
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