Osprey Landing, LLC v. First American Title Insurance Company
2017 ME 46
Me.2017Background
- Osprey Landing, LLC purchased oceanfront property in Southport, Maine, and obtained a title insurance policy from First American.
- Osprey sued neighboring landowners (the Blevinses); the Blevinses counterclaimed asserting a private prescriptive easement over Osprey’s property, but later dismissed that counterclaim with prejudice in 2012.
- Byron Miller (former owner/manager of seller) executed an affidavit and later was deposed stating knowledge of historical public use of a path across the property.
- After Miller’s deposition, Osprey notified First American that Miller’s statements created a risk of a future public prescriptive-easement claim and requested the insurer act to defend or protect the title; First American refused and obtained a later affidavit from Miller disclaiming any asserted prescriptive claim.
- Osprey sued to compel First American to defend or indemnify; the Superior Court granted summary judgment for First American and denied Osprey’s cross-motion. Osprey appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Miller’s affidavit/deposition statements created a triggering event obligating First American to defend or indemnify Osprey against a potential future public prescriptive easement | Miller’s statements create a risk of a future adverse claim or title unmarketability that triggers the insurer’s duty to act/indemnify | No present adverse claim or encumbrance exists; policy duty to defend arises only when a third party asserts a claim, and the insurer alone has the right to bring preemptive actions | Court held no trigger: no present adverse claim or loss; insurer has the right (but not the obligation) to commence preemptive litigation and need not indemnify absent an actual covered claim |
Key Cases Cited
- Travelers Indem. Co. v. Bryant, 38 A.3d 1267 (Me. 2012) (title insurance policy interpretation reviewed de novo; plain meaning applied)
- Harlor v. Amica Mut. Ins. Co., 150 A.3d 793 (Me. 2016) (duty to indemnify applies only to claims that are actually covered based on proved facts)
- N E Props., Inc. v. Chi. Title Ins. Co., 660 A.2d 926 (Me. 1995) (duty to defend determined by comparing underlying complaint with policy provisions)
- N. Sec. Ins. Co. v. Dolley, 669 A.2d 1320 (Me. 1996) (insurer may not pre-litigate indemnity before fulfilling any duty to defend)
- City of S. Portland v. Me. Mun. Ass’n, 953 A.2d 1128 (Me. 2008) (contract ambiguity standard; unambiguous policy language given plain meaning)
Judgment affirmed.