Fifth Third Mortgage Company v. Chicago Title Insurance Company, 2012 U.S. App. LEXIS 18400

Fifth Third loaned Buford $406,000 secured by a mortgage on 7694 Plantation Dr, Mason, Ohio, insured by Chicago Title via Direct Title Resources.
Direct Title was fraudulent; its member Jolie Neal owned the Plantation property and used it as collateral for multiple loans, with Buford posing as owner in some cases.
In 2008, a foreclosure on the Plantation property revealed Buford’s lack of title ownership and superior liens; Fifth Third intervened to protect its mortgage.
Fifth Third sought defense and indemnity from Chicago Title under the title-policy for losses due to title defects and lack of lien priority; Chicago Title refused.
The district court granted summary judgment for Fifth Third; Chicago Title sought discovery under Rule 56(d) claiming need to develop defenses about underwriting standards and agent authority.
On appeal, the Sixth Circuit affirms, holding discovery was not required, and Chicago Title must defend and indemnify under the policy.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Authority of Direct Title to issue policy	Chicago Title lacked authority through Direct Title; discovery could show this.	Direct Title had apparent authority via an issuing-agent agreement; Fifth Third reasonably relied on it.	Apparent authority deemed sufficient; Chicago Title bound.
Policy causation and underwriting as a condition	Fifth Third’s underwriting practices could be the proximate cause of the loss, voiding coverage.	Policy covers losses from title defects; underwriting quality is not a policy condition.	Coverage remains; underwriting quality not a predicate to the policy.
Exclusion for 'other matters' including underwriting	Underwriting failures fall within 'other matters' exclusion as something Fifth Third created.	Exclusion is too broad; it does not encompass underwriting conduct here.	Exclusion does not preclude coverage for Fifth Third’s losses.
Duty to defend in foreclosure action	Policy only requires defense when Fifth Third is a defendant in a suit.	Policy requires defense against third-party claims adverse to insured, including foreclosure actions.	Chicago Title had a duty to defend; breached by failure to provide defense.
Bad-faith/fair-dealing and rescission defenses	Refusal to cover could be justified by good-faith reasons or misrepresentation by Fifth Third.	Policy terms unambiguously require coverage; any reliance on underwriting is unreasonable.	Bad-faith finding affirmed; refusal to cover was unreasonable.

Meyer v. Klensch, 175 N.E.2d 870 (Ohio Ct. App. 1961) (apparent authority analysis for issuing agents)
Randall v. Alan L. Rankin Ins., Inc., 526 N.E.2d 97 (Ohio Ct. App. 1987) (apparent authority and agency principals)
Master Conso. Corp. v. BancOhio Nat’l Bank, 575 N.E.2d 817 (Ohio 1991) (apparent authority and agency relationships)
Albrecht v. Marinas Int’l Consol., L.P., 2010 WL 4866289 (Ohio Ct. App. 2010) (ejusdem generis in contract exclusions)
Blough v. Holland Realty, Inc., 574 F.3d 1084 (9th Cir. 2009) (no discovery needed where no plausible basis to exist)
Broder v. Cablevision Sys. Corp., 418 F.3d 187 (2d Cir. 2005) (contract terms and implied provisions not added by parties)
Savedoff v. Access Group, Inc., 524 F.3d 754 (6th Cir. 2008) (covenant of good faith not filling gaps where terms are explicit)
Zoppo v. Homestead Ins. Co., 644 N.E.2d 397 (Ohio 1994) (bad-faith standard for insurers)
Allstate Ins. Co. v. Boggs, 271 N.E.2d 855 (Ohio 1971) (insurer cannot rescind after liability unless misrepresentation is written in policy)
Ferrando v. Auto-Owners Mut. Ins. Co., 781 N.E.2d 927 (Ohio 2002) (subrogation notice defense limited to pre-set conditions)
Spriggs v. Martin, 182 N.E.2d 20 (Ohio Ct. App. 1961) (rescision and misrepresentation standards)