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Riordan v. Lawyers Title Ins. Corp. - 393 F. Supp. 2d 1100 (D.N.M. 2005)

Rule:

An insurance contract should be construed as a complete and harmonious instrument designed to accomplish a reasonable end. The doctrine of reasonable expectations only applies where the policy terms are ambiguous. Absent ambiguity, provisions of an insurance contract need only be applied, rather than construed or interpreted. Clear and unambiguous contract terms must be enforced as written. 

Facts:

Plaintiff property owners purchased 160 acres located in an "in-holding" in the middle of the Sandia Mountain Wilderness of the Cibola National Forest near Albuquerque, New Mexico. The property was accessed by the Piedra Lisa Trail, which was a hiking and horse trail maintained by the United States Forest Service. The property owners attempted to declare a vehicular right of way to the property, which was pending when they sold the property to the Sandia Pueblo and took a tax deduction for a charitable donation to the Pueblo. The property owners filed an action in federal district court against defendant Lawyers Title Insurance Corporation alleging breach of insurance contract, violation of the New Mexico Unfair Practices Act, violation of the New Mexico Insurance Trade Practices and Frauds Act, insurance bad faith, and punitive damages. The property owners alleged that they sustained a loss, covered by their policy, as a result of the lawsuit that they filed against the United States of America to declare a vehicular right of way to the property, which the insurance company would not cover. The insurance company filed a motion for summary judgment.

Issue:

Should summary judgment in favor of defendant insurance company be granted?

Answer:

Yes.

Conclusion:

The motion for summary judgment was granted. The court found that the policy insured against loss or damage sustained or incurred by the insured by reason of a lack of a right of access to and from the land. This language was clear and unambiguous and the policy did not insure that the property had vehicular or any other type of access. The property owners had a right of access to the property at all relevant times. Finally, the court added that the fact that the property owners were able to sell the property at a substantial profit militated against a determination that the title was unmarketable.

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