MEMORANDUM OPINION
COLLEEN KOLLAR-KOTELLY, UNITED STATES DISTRICT JUDGE.
Plaintiff
The Security Title Guarantee Corporation of Baltimore
(“Security Title”) and Defendant 915 Decatur St.
N.W. LLC (“Decatur”) dispute whether, under a
title insurance policy, Security Title must defend Decatur in
a separate lawsuit brought against Decatur and other
defendants in the District of Columbia Superior Court. The
parties further dispute whether Security Title must indemnify
Decatur for any losses stemming from that lawsuit. Pending
before the Court are the parties' renewed cross-motions
for summary judgment. See 915 Decatur St. N.W.
LLC's Renewed Mot. for Summ. J. (“Decatur's
Renewed Summ. J. Mot.”), ECF No. 22; Pl.'s Renewed
Cross-Mot. for Summ. J. and Opp'n to Def.'s Mot. for
Summ. J. (“Security Title's Combined Renewed
Cross-Mot. and Opp'n”), ECF No. 23.
In
broad strokes, Decatur argues that the policy provisions
governing Security Title's obligation to defend cover the
underlying case. Security Title disagrees. It contends that
the underlying litigation does not trigger its duty to defend
for two reasons. First, it argues that the lawsuit does not
qualify as a covered risk under the policy because the policy
has a provision limiting coverage to only certain claims. The
claims at issue here are not covered because Security Title
has transferred its interest in the property and because the
underlying losses did not occur while Decatur owned the
property. Second, Security Title argues that the claims in
the underlying lawsuit do not fall within the policy's
coverage and/or are excluded under certain conditions in the
relevant policy excepting matters created or agreed to by
Decatur. Both parties' indemnification arguments hinge
upon their above arguments regarding whether the underlying
litigation is covered under the relevant title insurance
policy.
Upon
consideration of the briefing, [1] the relevant legal authorities,
and the record as a whole, the Court GRANTS IN
PART and DENIES WITHOUT PREJUDICE IN
PART Security Title's motion for summary
judgment and DENIES IN PART and
DENIES WITHOUT PREJUDICE IN PART
Decatur's motion for summary judgment. In light of these
rulings, the Court DENIES AS MOOT
Decatur's Motion to Expedite. See Def. 915
Decatur St. N.W. LLC's Mot. to Expedite Ruling, ECF No.
28.
I.
BACKGROUND
For
purposes of summary judgment briefing, Security Title does
not dispute Decatur's identification of certain facts
underlying this case. Security Title's First Combined
Cross-Summ. J. Mot. and Opp'n at 2; see Security
Title's Mem. in Supp. of Combined Renewed Cross-Mot. and
Opp'n at 2 (incorporating prior summary judgment
briefing's statement of facts). In its original summary
judgment briefing, which Security Title has incorporated into
its renewed motion, Security Title simply discounts those
facts' materiality to the pending motions, and supplies
additional documents, including the insurance policy at
issue. Security Title's First Combined Cross-Summ. J.
Mot. and Opp'n at 2 at 2-3. Decatur does not object to
those additional documents.
Moreover,
in its renewed motion, Security Title identifies a few
additional facts, all of which relate to allegations in the
amended complaint in the underlying litigation. Security
Title's Mem. in Supp. of Combined Renewed Cross-Mot. and
Opp'n at 2-3. While Decatur objects to the underlying
allegations, it does not dispute that these allegations are
in the amended complaint in the underlying suit.
Decatur's Combined Opp'n and Reply at 2-3.
The
facts relevant to the present decision are quite few.
Decatur's managing member, Frank Olaitan, toured and
eventually purchased real property at 2022 1st Street, NW,
Washington, DC from “a woman whom he believed to be Ms.
Bridget Fordham.” Decatur's First Summ. J. Mot.
¶¶ 4-6, 8-12.[2] Although Ms. Fordham was not present at
the closing, a deed transferring the property was purportedly
signed by Ms. Fordham and notarized as of the date of the
deed, December 7, 2016. Id. ¶¶ 12, 15;
id. Ex. A (“December 7 Deed”). The deed
was recorded on December 15, 2016 at 12:37 PM with the
District of Columbia's Recorder of Deeds. Id.
¶ 14; id. Ex. A at 2. Upon concluding the
December 7, 2016 purchase, Decatur sold the property to
Claremont Management, LLC (“Claremont”), on
December 8, 2016. Id. ¶ 13; id. Ex. B
(“December 8 Deed”). That deed dated December 8,
2016 was also recorded on December 15, 2016, two minutes
after the first deed at 12:39 PM. Id. ¶ 14;
id. Ex. B.
Separately,
Decatur entered into a title insurance policy with Security
Title to cover the property. See Security
Title's First Combined Cross-Summ. J. Mot. and Opp'n
Ex. 2 (“Title Insurance Policy” or
“Policy”), ECF No. 11-3. The Policy lists the
“Date of Settlement” as December 7, 2016, and the
“Date of Policy” as December 15, 2016.
Id. at 7.
Then,
in October 2017, Ms. Fordham filed suit against Decatur, Mr.
Olaitan, Claremont, and others in the Superior Court for the
District of Columbia. Decatur's First Summ. J. Mot.
¶ 18; id. Ex. F (Ms. Fordham's original
complaint). Ms. Fordham alleged that her signature on the
deed was forged and that the conveyance to Decatur, and
consequently the conveyance to Claremont, were fraudulent.
Id. ¶¶ 18-21; see generally Id.
Ex. F. Security Title later declined Decatur's request
for legal defense in Ms. Fordham's lawsuit. Id.
¶¶ 34-36; see Id. Ex. I (April 26, 2018
Letter from Security Title). Decatur and Security Title then
filed separate lawsuits seeking declaratory judgments that
Decatur was and was not, respectively, entitled to legal
defense against Ms. Fordham under the Policy. See
Id. ¶¶ 37-39. At this time, both suits are
pending before this Court. See 915 Decatur St NW, LLC v.
Sec. Title Guarantee Corp. of Baltimore, Inc., No.
18-cv-1569 (D.D.C.) (Kollar-Kotelly, J.) (other case related
to present matter). Ms. Fordham later amended her complaint
to include, among other things, a count for negligence.
See Decatur's Suppl. Ex. 1 (“Fordham's
Am. Compl.”).
After
Decatur and Security Title first moved for summary judgment
in this case, the Court denied their motions without
prejudice for two reasons. See November 15, 2018
Order, ECF No. 20. First, there had been developments in the
underlying D.C. Superior Court case, including the filing of
Ms. Fordham's Amended Complaint with new claims.
Id. at 1. Second, the Court required additional
briefing from the parties on a specific issue relating to the
parties' dispute over whether Decatur's transfer of
interest in the property meant that the Policy's coverage
no longer applied. See Id. at 2-3. The Court now
considers the parties' additional briefing and renewed
cross-motions for summary judgment.
II.
LEGAL STANDARD
Summary
judgment is appropriate where “the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). In ruling on cross-motions for summary
judgment, a court shall grant summary judgment only if one of
the moving parties is entitled to judgment as a matter of law
upon material facts that are not genuinely disputed. See
Rhoads v. McFerran, 517 F.2d 66, 67 (2d Cir. 1975);
Long v. Gaines, 167 F.Supp.2d 75, 84 (D.D.C. 2001).
The mere existence of some factual dispute is insufficient on
its own to bar summary judgment; the dispute must pertain to
a “material” fact. Fed.R.Civ.P. 56(a).
Accordingly, “[o]nly disputes over facts that might
affect the outcome of the suit under the governing law will
properly preclude the entry of summary judgment.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). Nor may summary judgment be avoided based on just any
disagreement as to the relevant facts; the dispute must be
“genuine, ” meaning that there must be sufficient
admissible evidence for a reasonable trier of fact to find
for the non-movant. Id.
In
order to establish that a fact is or cannot be genuinely
disputed, a party must (A) cite to specific parts of the
record-including deposition testimony, documentary evidence,
affidavits or declarations, or other competent evidence-in
support of its position, or (B) demonstrate that the
materials relied upon by the opposing party do not actually
establish the absence or presence of a genuine dispute.
Fed.R.Civ.P. 56(c)(1). Conclusory assertions offered without
any factual basis in the record cannot create a genuine
dispute sufficient to survive summary judgment. See
Ass'n of Flight Attendants-CWA, AFL-CIO v. U.S. Dep't
of Transp., 564 F.3d 462, 465-66 (D.C. Cir. 2009).
Moreover, where “a party fails to properly support an
assertion of fact or fails to properly address another
party's assertion of fact, ” the district court may
“consider the fact undisputed for purposes of the
motion.” Fed.R.Civ.P. 56(e).
When
faced with a motion for summary judgment, the district court
may not make credibility determinations or weigh the
evidence; instead, the evidence must be analyzed in the light
most favorable to the non-movant, with all justifiable
inferences drawn in her favor. Liberty Lobby, 477
U.S. at 255. If material facts are genuinely in dispute, or
undisputed facts are susceptible to divergent yet justifiable
inferences, summary judgment is inappropriate. Moore v.
Hartman, 571 F.3d 62, 66 (D.C. Cir. 2009). In the end,
the district court's task is to determine “whether
the evidence presents a sufficient disagreement to require
submission to a jury or whether it is so one-sided that one
party must prevail as a matter of law.” Liberty
Lobby, 477 U.S. at 251- 52. In this regard, the
non-movant must “do more than simply show that there is
some metaphysical doubt as to the material facts.”
Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio
Corp., 475 U.S. 574, 586 (1986). “If the evidence
is merely colorable, or is not significantly probative,
summary judgment may be granted.” Liberty
Lobby, 477 U.S. at 249-50 (internal citations omitted).
III.
DISCUSSION
The
Title Insurance Policy at issue has a specific provision
governing when and whether Security Title must provide a
defense to Decatur. Section 5 of the Conditions portion of
the Policy provides:
Upon written request by the Insured, and subject to the
options contained in Section 7 of these Conditions, the
Company, at its own cost and without unreasonable delay,
shall provide for the defense of an Insured in litigation
in which any third party asserts a claim covered by this
policy adverse to the Insured. This obligation is
limited to only those stated causes of action alleging
matters insured against by this policy. The Company
shall have the right to select counsel of its choice (subject
to the right of the Insured to object for reasonable cause)
to represent the Insured as to those stated causes of
action. It shall not be liable for and will not pay the
fees of any other counsel. The Company will not pay any fees,
costs, or expenses incurred by the Insured in the defense
of those causes of action that allege matters not insured
against by this policy.
Title
Insurance Policy at 4 (emphases added). The Policy specifies
that Security Title only has a duty to defend when the claims
in the litigation are covered by the Policy. To determine
whether the underlying claims brought by Ms. Fordham
triggered Security Title's duty to defend Decatur, then,
the Court must consider whether the claims she has brought
are, or would be, covered risks. The Policy covers numerous
risks, but the parties here focus on one principal area of
coverage. The Covered Risks portion of the Policy explains
that:
[Security Title] insures as of Date of Policy and, [in
limited circumstances], after Date of Policy, against loss or
damage, not exceeding the Amount of Insurance, sustained or
incurred by the Insured by reason of: . . .
Any defect in or lien or encumbrance on the Title. This
Covered Risk includes but is not limited to insurance against
loss from
(a) A defect in the Title caused by
(i) forgery, fraud, undue influence, duress, incompetency,
incapacity, or impersonation[.]
Id. at 1. In other words, certain defects in the
title are covered by the Policy, and this includes title
defects due to forgery or fraud. Id. However, the
Policy also furnishes a long list of exclusions from coverage
in a separate portion. Chief among those exclusions are
“[d]efects, liens, encumbrances, adverse claims, or
other matters” that were “created, suffered,
assumed or agreed to” by Decatur. Id. at 2.
The
parties also included in the Policy a temporal limitation on
coverage. Section 2 of the Conditions limits the coverage
period to while Decatur has an estate or interest in the
property:
The coverage of this policy shall continue in force as of
Date of Policy in favor of an Insured, but only so long as
the Insured retains an estate or interest in the Land, or
holds an obligation secured by a purchase money Mortgage
given by a purchaser from the Insured, or only so long as the
insured shall have liability by reason of warranties in any
transfer or conveyance of the Title. This policy shall not
continue in force in favor of any purchaser from the Insured
of either (i) an estate or interest in the Land, or (ii) an
obligation secured by a purchase money Mortgage given to the
Insured.
Id. at 4. In short, coverage under the Policy only
continues so long as Decatur has an interest in the property,
has an obligation secured by a purchase money mortgage, or
has an obligation due to warranties in any future transfer of
Decatur's interest. However, the Policy imposes no
temporal restriction on when Decatur must file claims.
See id.
Based
on these provisions, the parties now dispute whether the
claims in the underlying litigation are covered under the
Policy. Security Title first argues that Decatur's
transfer of its interest to Claremont signaled the end of
coverage under the Policy. It further contends that all of
the claims in the underlying litigation fall into the
exception for defects or other matters created or agreed to
by Decatur. Decatur disagrees on both points; it claims that
the relevant losses related to the underlying claims occurred
during the coverage period, that a special warranty in the
deed to Claremont extended the coverage period, and that the
exclusion is inapplicable here, especially with respect to
the negligence claim in Ms. Fordham's amended complaint.
Decatur also moves for summary judgment on the basis that
Security Title breached the covenant of good faith and fair
dealing.
This
Opinion first discusses the applicable District of Columbia
insurance contract principles before addressing the
parties' arguments with respect to the Policy's
temporal and substantive scopes. Because the Court grants
summary judgment on the duty to defend issue to Title
Security based on the temporal and substantive scope of the
Policy, and therefore finds that Security Title did not
breach the Policy by refusing to defend Decatur, it does not
address Decatur's breach of good faith and fair dealing
argument.[3] Lastly, the Opinion addresses the
parties' arguments with respect to Security Title's
duty to indemnify.
A.
Applicable Insurance Contract Principles
“Because
an insurance policy constitutes a contract, ” it is
construed “according to contract principles.”
Stevens v. United Gen. Title Ins. Co., 801 A.2d 61,
66 (D.C. 2002). “Where insurance contract language is
not ambiguous, summary judgment is appropriate because a
written contract duly signed and executed speaks for itself
and binds the parties without the necessity of extrinsic
evidence.” Id. (internal quotation marks and
alterations omitted) (quoting Travelers Indem. Co. of
Ill. v. United Food & Commercial Workers ...