United States: Rhode Island District Court Grants Summary Judgment on Title Insurance Coverage
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The United States District Court for the District of Rhode Island recently granted a title insurance company’s petition for reconsideration, finding that the insured suffered no loss when he lost title to two properties on which he could not build improvements. See IDC Properties, Inc. c. Chicago Title Ins. Co., 2021 WL 4355259 (DRI 2021). The case involved an insured who obtained a $10 million title insurance policy when purchasing three properties he planned to develop. As a result of Rhode Island Supreme Court rulings, the insured lost title to two of the parcels of land (the “South and West Units”). The insured filed a claim, which the title insurance company denied. The insured then commenced this action, arguing that it had lost title and its right to build improvements, including residential properties, on these lands. The title insurer sought summary judgment, but the court denied the motion, finding that there were questions of fact as to the insured’s damages. In reaching this conclusion, however, the Court disregarded the Rhode Island Supreme Court’s earlier ruling that the insured could not build homes on the units as improvements.
The title insurer requested a reconsideration and the Court granted the motion. In doing so, the Court accepted his argument that “when [the insured] lost the title of the southern and western units, [the insured] has not forfeited an “improvement” right to construct new single-family residences in the airspace above portions of the common elements of the Goat Island South Condominium [because] he never had such a right. . . . Without the ability to build improvements in the airspace that comprised the units, their economic value is nil. “” The Court agreed that it had made a manifest error of law, that there was no genuine question of material fact and that the title insurer was entitled to a judgment in law as to the coverage of the south and west units.
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