| A. Gugliotta Dev., Inc. v First Am. Tit. Ins. Co. ofN.Y. |
| 2013 NY Slip Op 08034 [112 AD3d 559] |
| December 4, 2013 |
| Appellate Division, Second Department |
| A. Gugliotta Development, Inc.,Respondent, v First American Title Insurance Company of New York,Appellant. |
—[*1] Michael G. Walsh, Water Mill, N.Y. (Kelly A. Doyle of counsel), forrespondent.
In an action to recover damages for breach of a title insurance policy, the defendantappeals, as limited by its brief, from so much of an order of the Supreme Court, SuffolkCounty (Molia, J.), dated September 18, 2012, as denied that branch of its motion whichwas for summary judgment dismissing the complaint.
Ordered that the order is reversed insofar as appealed from, on the law, with costs,and that branch of the defendant's motion which was for summary judgment dismissingthe complaint is granted.
In 2003, the defendant, First American Title Insurance Company of New York(hereinafter First American), issued a policy of title insurance in connection with theplaintiff's purchase of a nine-acre wooded parcel of land in Water Mill, New York.Among other things, the policy contained an exception referencing a survey reading,which, in turn, contained a notation regarding a trail running across the property. In2009, after a third party withdrew from an agreement with the plaintiff to purchase thesubject property, the plaintiff sent First American a notice of claim, asserting that the trail"encroaches over and upon the premises," that the property "cannot be subdividedwithout preserving the trail," and that the property cannot be conveyed "withoutremoving the trail." First American denied the claim, inter alia, on the ground that thepolicy excepts the trail from coverage.
The plaintiff subsequently commenced this action to recover damages for breach ofthe title insurance policy. Among other things, the complaint alleges that the trail is aninsured encumbrance or defect on the property because it prevents the property frombeing subdivided or conveyed.
After discovery, First American moved, inter alia, for summary judgment dismissingthe complaint. The plaintiff opposed the motion, arguing that the subject policy, whilementioning the trail, did not specifically and clearly except the rights of third parties orother persons over and [*2]upon the trail. The SupremeCourt denied the motion.
"Construction of an unambiguous contract is a matter of law, and the intention of theparties may be gathered from the four corners of the instrument and should be enforcedaccording to its terms" (BealSav. Bank v Sommer, 8 NY3d 318, 324 [2007]; see Vermont Teddy Bear Co. v 538Madison Realty Co., 1 NY3d 470, 475 [2004]; W.W.W. Assoc. vGiancontieri, 77 NY2d 157, 162 [1990]).
"[A] policy of title insurance is a contract by which the title insurer agrees toindemnify its insured for loss occasioned by a defect in title" (L. Smirlock RealtyCorp. v Title Guar. Co., 52 NY2d 179, 188 [1981]; see Appleby v Chicago Tit. Ins.Co., 80 AD3d 546, 549 [2011]). "A policy of title insurance insures 'against lossby reason of defective titles and encumbrances and insur[es] the correctness of searchesfor all instruments, liens or charges affecting the title to such property' " (Citibank vCommonwealth Land Tit. Ins. Co., 228 AD2d 635, 636 [1996], quoting InsuranceLaw § 1113 [a] [18]). Since the title insurer's liability to its insured is based, inessence, on contract law, that liability is governed and limited by the agreements, terms,conditions, and provisions contained in the title insurance policy (see Property Hackers, LLC vStewart Tit. Ins. Co., 96 AD3d 818, 819 [2012]; Citibank v CommonwealthLand Tit. Ins. Co., 228 AD2d at 637). In general, a title insurer " 'will be liable forhidden defects and all matters affecting title within the policy coverage and not excludedor specifically excepted from said coverage' " (Citibank v Commonwealth Land Tit.Ins. Co., 228 AD2d at 637, quoting 5A Warren's Weed, New York Real Property,Title Insurance, § 1.03 [6] at 15 [4th ed]).
"An exclusion from coverage 'must be specific and clear in order to be enforced,' andan ambiguity in an exclusionary clause must be construed most strongly against theinsurer" (Guachichulca v LaszloN. Tauber & Assoc., LLC, 37 AD3d 760, 761 [2007] [citation omitted], quotingSeaboard Sur. Co. v Gillette Co., 64 NY2d 304, 311 [1984]; see Ace Wire &Cable Co. v Aetna Cas. & Sur. Co., 60 NY2d 390, 398 [1983]; Howard & Norman Baker, Ltd. vAmerican Safety Cas. Ins. Co., 75 AD3d 533, 534 [2010]; Bassuk Bros. v Utica First Ins.Co., 1 AD3d 470, 471 [2003]).
Here, First American established its prima facie entitlement to judgment as a matterof law by submitting, inter alia, the title insurance policy, which specifically excepted thetrail from coverage. In opposition, the plaintiff failed to raise a triable issue of fact as towhether the language of the policy is "susceptible of two reasonable interpretations" and,therefore, ambiguous (State of New York v Home Indem. Co., 66 NY2d 669,671 [1985]; see MDW Enters. v CNA Ins. Co., 4 AD3d 338, 340-341 [2004];see generally Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]). Contrary tothe plaintiff's contention, while the relevant provisions of the policy could havetheoretically been more precise by specifying the rights of third parties which may arisefrom the trail, such lack of specificity does not render the policy provisions ambiguous(see Greenfield v Philles Records, 98 NY2d 562, 573 [2002]; Henrich v Phazar AntennaCorp., 33 AD3d 864, 867 [2006]; see also Kasowitz, Benson, Torres & Friedman, LLP v DuaneReade, 98 AD3d 403, 406 [2012]; RM Realty Holdings Corp. v Moore, 64 AD3d 434, 438[2009]). Moreover, "extrinsic and parol evidence is not admissible to create an ambiguityin a written agreement which is complete and clear and unambiguous upon its face"(W.W.W. Assoc. v Giancontieri, 77 NY2d at 163 [internal quotation marksomitted]).
Accordingly, the Supreme Court should have granted that branch of First American'smotion which was for summary judgment dismissing the complaint. Mastro, J.P.,Leventhal, Austin and Sgroi, JJ., concur.