Hart v. Ticor Title Insurance Co.
126 Haw. 448
Haw.2012Background
- Hart policy: TICOR insured two Ewa Beach lots; escheat claim asserted by State; State reserved escheat rights in Land Court pleadings; Harts tendered defense to TICOR; TICOR denied defense asserting escheat not within coverage; Hawai`i Land Court ordered partial relief and consolidation, leading to district court breach-of-contract suit and TICOR fees award; ICA affirmed district court, but Hawaii Supreme Court vacated and remanded to award defense and fees to Harts.
- Policy exclusions and Schedule B exclusions include avoidance of coverage for subsistence, mineral, water, and shoreline rights; escheat claim language not clearly excluded.
- Harts filed suit May 6, 2008; district court default judgment later set aside; Harts moved for partial summary judgment; district court granted TICOR summary judgment on defense duty; ICA affirmed; Supreme Court granted certiorari.
- TICOR conceded escheat not categorically excluded, but argued no present escheat claim; State’s escheat reservation appeared as a present claim in pleadings, triggering defense duty.
- The Supreme Court reverses ICA, vacates district court judgment and fee award, remands for judgment in Hart favor and fee determination limited to defense tender through escheat resolution.
- The decision clarifies that an insurer’s duty to defend may attach when pleadings plausibly assert a present escheat claim, even if later withdrawn.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did TICOR have a duty to defend the escheat claim? | Hart: escheat reservation pleaded as present claim | TICOR: escheat not a present claim; not covered | Yes; TICOR owed defense for escheat claim. |
| Are TICOR’s attorney’s fees/ costs properly awarded? | Hart: prevailing party due to defense duty | TICOR: fees justified under district court ruling | Fees reversed; remand for Hart fees in Hart’s favor. |
Key Cases Cited
- Sentinel Ins. Co., Ltd. v. First Ins. Co. of Haw., Ltd., 76 Haw. 277, 875 P.2d 894 (Haw. 1994) (duty to defend depends on potential coverage; resolve ambiguities against insurer)
- Dairy Road Partners v. Island Ins. Co., Ltd., 92 Hawai`i 398, 992 P.2d 93 (Haw. 2000) (liberal construction in favor of insured; ambiguities resolved against insurer)
- Allstate Ins. Co. v. Pruett, 118 Hawai`i 174, 186 P.3d 609 (Haw. 2008) (ambiguous terms construed in favor of insured; duty to defend broader than coverage)
- Pancakes of Haw., Inc. v. Promare Prop. Corp., 85 Haw. 286, 944 P.2d 83 (Haw. 1997) (duty to defend broad when potential coverage, contract indemnity context)
- St. Paul Fire & Marine Ins. Co. v. Hawaiian Insurance & Guaranty Co., 2 Haw. App. 595, 637 P.2d 1146 (Haw. App. 1981) (early recognition of liberal interpretation of claims and defense duties)
- Hawai`i Rev. Stat. § 665-1, (statute cited in opinion) (1993) (escheat procedure; not a case but referenced in context of escheat claims)