Woodle v. Commonwealth Land Title Ins. Co.
| Decision Date | 11 April 2014 |
| Docket Number | No. S-13-111.,S-13-111. |
| Citation | 844 N.W.2d 806,287 Neb. 917 |
| Court | Nebraska Supreme Court |
| Parties | Brad Woodle and Chase Woodle, Appellants, v. Commonwealth Land Title Insurance Company, a Nebraska corporation, and Omaha Title & Escrow, Inc., a Nebraska corporation, Appellees. |
OPINION TEXT STARTS HERE
Appeal from the District Court for Sarpy County: Max Kelch, Judge. Affirmed.
Ronald E. Reagan, La Vista, Richard W. Whitworth, Bellevue, and A. Bree Swoboda, Senior Certified Law Student, of Reagan, Melton & Delaney, L.L.P., for appellants.
John D. Stalnaker and Robert J. Becker, of Stalnaker, Becker & Buresh, P.C., Omaha, for appellees.
1. Summary Judgment: Appeal and Error. In reviewing a summary judgment, an appellate court views the evidence in the light most favorable to the party against whom the judgment was granted, and gives that party the benefit of all reasonable inferences deducible from the evidence.
2. Insurance: Contracts. An insurance policy is a contract, and when the facts are undisputed, whether or not a claimed coverage exclusion applies is a matter of law.
3. Contracts: Appeal and Error. The interpretation of a contract is a question of law, in connection with which an appellate court has an obligation to reach its conclusions independently of the determinations made by the court below.
4. Pleadings: Words and Phrases. The use of specific language asserting defenses is not required, nor is it necessary to state a defense in any particular form, as long as the facts supporting the assertion are stated and sufficient facts are pled to constitute the raising of the alleged defense.
5. Appeal and Error. In the absence of plain error, when an issue is raised for the first time in an appellate court, it will be disregarded inasmuch as a lower court cannot commit error in resolving an issue never presented and submitted to it for disposition.
6. Easements: Words and Phrases. An easement is an interest in land owned by another person, consisting in the right to use or control the land, or an area above or below it, for a specific limited purpose.
7. Easements: Real Estate: Conveyances. An easement by implication from former use arises only where (1) the use giving rise to the easement was in existence at the time of the conveyance subdividing the property, (2) the use has been so long continued and so obvious as to show that it was meant to be permanent, and (3) the easement is necessary for the proper and reasonable enjoyment of the dominant tract.
Brad Woodle and Chase Woodle commenced this action against Commonwealth Land Title Insurance Company (Commonwealth)and Omaha Title & Escrow, Inc., to recover fees, costs, and indemnification pursuant to a policy of title insurance issued by Commonwealth insuring property owned by the Woodles. The district court concluded as a matter of law that Commonwealth had no duty to indemnify or defend the Woodles concerning implied easements on the property. It sustained Commonwealth's motion for summary judgment and dismissed the action with prejudice. The Woodles now appeal the court's dismissal concerning Commonwealth, and Omaha Title & Escrow is not at issue in this appeal. We affirm.
In reviewing a summary judgment, an appellate court views the evidence in the light most favorable to the party against whom the judgment was granted, and gives that party the benefit of all reasonable inferences deducible from the evidence. Cartwright v. State, 286 Neb. 431, 837 N.W.2d 521 (2013).
An insurance policy is a contract, and when the facts are undisputed, whether or not a claimed coverage exclusion applies is a matter of law. Miller v. Steichen, 268 Neb. 328, 682 N.W.2d 702 (2004), appeal after remand sub nom. Fokken v. Steichen, 274 Neb. 743, 744 N.W.2d 34 (2008).
The interpretation of a contract is a question of law, in connection with which an appellate court has an obligation to reach its conclusions independently of the determinations made by the court below. Fitzgerald v. Community Redevelopment Corp., 283 Neb. 428, 811 N.W.2d 178 (2012).
On November 28, 2008, the Woodles entered into a contract to purchase real property described as “Lot 2, Sun Country Addition, an addition in Sarpy County, Nebraska” (Lot 2). At the time of purchase, Commonwealth issued its policy of insurance. Lot 2 was subject to two express easements that were executed in favor of the owners of the adjacent lots in Sun Country Addition (collectively Lots 1 and 3).
After purchasing Lot 2, the Woodles filed a quiet title action against the owners of Lots 1 and 3, seeking a declaration that the express easements granted in favor of Lots 1 and 3 (which were specifically excepted from coverage under the policy issued by Commonwealth) were invalid. The owners of Lot 1 (William and Sandy Curlis) and Lot 3 (David and Susan Zajac) filed counterclaims asserting that the express easements were valid or, in the alternative, they were entitled to easements or ownership of the disputed property under an implied easement, adverse possession, or easement by proscription. The Curlises used the west part of the driveway located on Lot 2 to access their garage, shed, septic tank, and propane tank. Their use of the western portion of the driveway loop for ingress and egress has been continuous. The Zajacs have exercised continuous use of a portion of the driveway on Lot 2 to access the south and west sides of their cabinet shop located on Lot 3. (These easements would allow ingress and egress for Lots 1 and 3 in the same manner whether the easements were express or implied.) When the counterclaims were filed, the Woodles submitted to Commonwealth a claim for defense. Commonwealth denied the claim, asserting there was no coverage under the policy for indemnification or defense of any of the counterclaims.
In the quiet title action, the court found that Lot 2 was advertised for sale at auction to be held on November 25, 2008. Sandy Curlis and the Woodles attended an open house on the property 2 days before the auction was to be held. The next day, Sandy Curlis requested a preliminary title search and was advised that there was a 1992 easement on the west side which was of questionable validity because of a later quitclaim deed and another easement document on file pertaining to the east side, which easement was also of questionable validity.
According to Sandy Curlis, on the evening of November 24, 2008, she and the Woodles went to the property and met with David Zajac, who informed them that both of the adjoining lot owners had easements to use portions of the driveway on Lot 2. Sandy Curlis and the Woodles saw the existing drives on both the east and west sides of the lot prior to the auction and knew they were used by someone. In the quiet title action, the Woodles alleged that previous written easements on Lot 2 had been extinguished, but the owners of Lots 1 and 3 asserted that they had continuing rights to use and travel upon Lot 2, which cast a cloud upon the title of Lot 2.
The district court extinguished the express easements and denied the counterclaims of the owners of Lots 1 and 3 regarding express easement, public easement, and adverse possession. However, the court concluded that the owners of Lots 1 and 3 possessed implied easements for ingress and egress arising from prior use.
While the quiet title action was pending, the Woodles filed the present action against Commonwealth, seeking a determination that Commonwealth had breached its duty under the title insurance policy by refusing to provide a defense to the counterclaims and seeking damages for any diminution in value of Lot 2 as a result of the counterclaims filed in the underlying action. Commonwealth answered, asserting that the policy, by its terms, did not provide coverage for the counterclaims in the quiet title action. The relevant portions of the policy provide as follows:
COVERED RISKS
SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B, AND THE CONDITIONS, COMMONWEALTH LAND TITLE INSURANCE COMPANY, a Nebraska corporation ... insures, as of Date of Policy ... against loss or damage, not exceeding the Amount of Insurance, sustained or incurred by the Insured by reason of:
1. Title being vested other than as stated in Schedule A.
....
The following matters are expressly excluded from the coverage of this policy, and [Commonwealth] will not pay loss or damage, costs, attorneys' fees, or expenses that arise by reason of:
....
3. Defects, liens, encumbrances, adverse claims, or other matters
(a) created, suffered, assumed, or agreed to by the Insured Claimant;
....
(d) attaching or created subsequent to Date of Policy....
....
....
This policy does not insure against loss or damage (and [Commonwealth] will not pay costs, attorneys' fees or expenses) which arise by reason of:
1. Rights or claims of parties in possession not shown by the public records.
2. Unrecorded easements, discrepancies or conflicts in boundary lines, shortage in area and encroachments which an accurate and complete survey would disclose.
....
7. Easement recorded March 17 1993 ... granted to Owners of Lots 2 and 3 Sun Country over a portion of property described therein for Ingress and Egress.
8. Lot Line Adjustment recorded June 17 2003 ... granted to Owners of Lots 2 and 3 Sun Country over a portion of property described therein for Lot line adjustment to Plat.
9. Right of Way Easement dated July 18, 2002, recorded April 30, 2008....
Commonwealth moved for summary judgment, asserting that under “Exclusion 3(d),” the policy did not provide coverage for “defects, liens, encumbrances, adverse claims or other matters ... created subsequent to the date of policy.” The district court found that although the implied easements may have existed prior to judgment,...
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