Ash Dev., LLC v. Fidelity Natl. Title Ins. Co.

Summary

The Appellate Division, Second Department, held that a title insurer was not obligated to defend or indemnify Ash Development, LLC in an underlying adverse possession action because the title policy's exception for claims arising from the rights of persons in possession applied. The court also upheld the denial of attorneys' fees incurred in a related easement action, finding no conflict of interest requiring reimbursement. The judgment was modified to include the required declaratory provision stating the insurer's lack of obligations.

Holdings

1. Fidelity was not obligated to defend or indemnify Ash Development because the title insurance policy contained an exception for claims arising from the rights of persons in possession, and there was no other reasonable interpretation of that exception.
2. Fidelity was not required to reimburse Ash Development for attorneys' fees incurred after Ash Development retained private counsel not approved by Fidelity because the circumstances did not establish a conflict of interest requiring payment.
3. The Supreme Court erred by dismissing the declaratory-relief cause of action merely because the plaintiff was not entitled to the declaration it sought; the judgment had to include a declaration that Fidelity was not obligated to defend, indemnify, or reimburse the plaintiff.
4. The appeal from the October 19, 2023, order had to be dismissed because the right to a direct appeal from that order terminated upon entry of the judgment, although the issues raised by that appeal were reviewable on the appeal from the judgment.

Questions Presented

1. Whether the title insurance policy required Fidelity to defend and indemnify Ash Development in the underlying adverse possession action.
2. Whether Fidelity was required to reimburse Ash Development for attorneys' fees incurred after Ash Development retained private counsel in the easement action.
3. Whether the Supreme Court properly dismissed the declaratory-relief cause of action rather than entering a declaration adverse to the plaintiff.
4. Whether the direct appeal from the October 19, 2023, order survived entry of the judgment.

Disposition

other