17 Fla. L. Weekly Supp. 1207a
Online Reference: FLWSUPP 1712FIRS
Insurance — Title — Action by property owner against title insurer, alleging liability under title policy for loss incurred due to power company’s exercise of easement rights undisclosed in title search — Irrespective of failure of title search to disclose easement and owner’s repeated requests that title insurer confirm absence of easement, where owner had knowledge of existence and location of power lines on property, owner is charged as matter of law with knowledge of power company’s easement rights prior to issuance of title insurance policy and is deemed to have agreed to easement — Final summary judgment is granted in favor of insurer
FIRST COAST LAND MANAGEMENT, LLC, a foreign Limited Liability Company, Plaintiff, vs. COMMONWEALTH LAND TITLE INSURANCE COMPANY, a foreign profit corporation, Defendant. Circuit Court, 4th Judicial Circuit in and for Duval County. Case No. 16-2009-CA-2688-XXXX. Division CV-H. August 27, 2010. Waddell A. Wallace, III, Judge. Counsel: T. Geoffrey Heekin, Jacksonville. Fred D. Franklin, Jr., Jacksonville.
SUMMARY FINAL JUDGMENT IN FAVOR OF DEFENDANT
This case is before the Court for consideration of the Motion for Summary Judgment on Liability filed on behalf of Plaintiff, First Coast Land Management, LLC (“First Coast”), and the Amended Motion for Summary Final Judgment filed on behalf of Defendant, Commonwealth Land Title Insurance Company (“Commonwealth”).
The material facts are not in dispute. The property at issue is undeveloped land located in Duval County, Florida. A portion of that property is known as Parcel 10. At all material times, large power lines owned and operated by the Jacksonville Electric Authority (“JEA”) ran along the length of Parcel 10 on the property. The property was acquired by First Coast in two parts. First Coast acquired the first part (which contains Parcel 10 and the JEA power lines in question) from an affiliated company known as SFS Development Group, LLC (“SFS”). When SFS initially acquired the property, Commonwealth was hired to do a title search. Commonwealth did not disclose any encumbrance on Parcel 10. After First Coast obtained the property from SFS, First Coast then acquired additional adjacent acreage. When First Coast did so, it hired Commonwealth to conduct a title search and issue a title insurance policy to First Coast on the additional acreage as well as the entire property, including Parcel 10. Commonwealth’s subsequent title search also did not disclose any encumbrance on Parcel 10. Prior to the issuance of the title policy, First Coast obtained a survey of the property and additional acreage and knew that the JEA power lines ran along Parcel 10 well within the border of the property that was to be covered by the Commonwealth title insurance policy. Also, prior to the issuance of the policy, First Coast spoke to agents of Commonwealth to confirm that there was in fact no recorded easement in favor of JEA on Parcel 10 that would coincide with the power lines. Commonwealth again mistakenly informed First Coast that there was no easement or other encumbrance covering Parcel 10 (the land underlying the JEA power lines). Commonwealth issued the title insurance policy that is the subject of this action. This policy covers the original property purchased by First Coast, including Parcel 10 (on which the power lines are located), together with the additional acreage. Upon receiving the policy, First Coast proceeded with plans to develop the property (including the additional acreage) as a subdivision. First Coast planned to locate a retention pond on the land underneath the JEA power lines (Parcel 10). In fact, however, JEA does hold a written, recorded easement giving it the right to place and maintain power lines on the Parcel 10 portion of the property. JEA has objected to First Coast developing retention ponds on the property subject to JEA’s easement and power lines. JEA is seeking to enjoin Commonwealth from proceeding with such plans on the ground that the retention pond development would pose a hazard to the maintenance of JEA’s power lines.
Prior to the issuance of the title insurance policy, representatives of First Coast clearly knew of the existence of the JEA power lines and that those lines ran along a part of the property covered by the title insurance policy (Parcel 10). As revealed by the title searches and commitments, the First Coast property is burdened by a series of easements held by JEA and others. On the portion of the property known as Parcel 10 (where the power lines at issue are located), however, Commonwealth’s title search did not disclose or reveal any written or recorded easements. Commonwealth reaffirmed the absence of any written or recorded easement to First Coast prior to the issuance of the title insurance policy. Moreover, the policy itself contains exceptions for other easements, but no exception for any easement covering Parcel 10. First Coast argues that, notwithstanding its knowledge of the existence and location of the power lines, it relied on Commonwealth’s assurance that JEA did not have a recorded easement on the property under these power lines. According to First Coast, the absence of a recorded easement gave First Coast negotiating leverage with JEA over the use of the land under the power lines and such perceived leverage was a factor in First Coast’s decision to purchase the additional property and proceed with the cost of development. Controlling legal authority appears to hold, however, that the JEA power lines clearly on First Coast’s property placed First Coast on notice of whatever rights were held by JEA. See McDaniel v. Lawyers Title Guaranty Fund, 327 So. 2d 852, 856 (Fla. 2d DCA 1976); and Lawyers Title Insurance Corporation v. DSC of Newark Enterprises, 544 So. 2d 1070, 1072 (Fla. 4th DCA 1989). It does not change the outcome that First Coast apparently asked Commonwealth more than once to confirm the absence of any written easement to JEA on Parcel 10. Inquiry to JEA, as the party whose power lines put First Coast on notice, was required. See Tarin v. Sniezek, 942 So. 2d 458, 461 (Fla. 4th DCA 2006) [31 Fla. L. Weekly D2986a]; and McDonald v. Rose, 50 So. 2d 878 (Fla. 1951). Inquiry to JEA clearly would have revealed the existence of its written and recorded easement on the Parcel 10 portion of First Coast’s property. First Coast is thus charged as a matter of law with knowledge of JEA’s easement prior to the issuance of the Commonwealth title insurance policy. Accordingly, First Coast, acquiring the title insurance policy with knowledge of JEA’s easement, is deemed to have “suffered, assumed or agreed to” the JEA easement at issue. For this reason, coverage for any loss to First Coast arising from JEA’s exercise of its easement rights is excluded from coverage under Exclusion 3B of Commonwealth’s policy. Therefore, Commonwealth, and not First Coast, is entitled to summary judgment on First Coast’s complaint alleging liability on the part of Commonwealth under the title policy.
In its Motion for Summary Judgment, Commonwealth only asks for summary judgment on the claims asserted by First Coast in its Amended Complaint. Commonwealth has asserted a counterclaim against First Coast seeking a declaratory judgment to the effect that Commonwealth has no liability to First Coast for the matters arising out of the JEA easement on Parcel 10. An adjudication against First Coast on its complaint would have the same ultimate effect as an adjudication in favor of Commonwealth on its declaratory judgment counterclaim. The Court thus considers Commonwealth as having abandoned its counterclaim in light of the Court’s granting of Commonwealth’s Motion for Summary Judgment on First Coast’s affirmative claims.
Accordingly, for the reasons stated in this order, as well as the additional grounds stated in the Amended Motion for Summary Judgment filed on behalf of Commonwealth, it is ORDERED AND ADJUDGED:
1. First Coast’s Motion for Summary Judgment on Liability is DENIED.
2. Commonwealth’s Amended Motion for Summary Final Judgment is GRANTED.
3. Commonwealth’s Amended Counterclaim for Declaratory Judgment is deemed abandoned.
4. Plaintiff, First Coast Land Management, LLC, shall take nothing by this action and Defendant, Commonwealth Land Title Insurance Company, shall go hence without day.
