Insurer Prevails on Policy Ambiguity
Extrinsic evidence demonstrated that the only fair interpretation of an ambiguous title policy description was that advanced by the insurer. Demetrio v. Stewart Title Ins. Co., 2015 NY Slip Op 00720 (2nd Dept., Jan. 28, 2015).
Schedule A of the policy stated that it insured title to only Lot 1, but also referred to an annexed legal description containing the metes and bounds for seven lots. Stewart Title obtained summary judgment by submitting documents related to the foreclosure action and sale at which Demetriou purchased only Lot 1, and his contemporaneous purchase of the subject insurance policy.
Blind adherence to the apothegm that “ambiguity in an insurance policy is construed against the insurer” can distract counsel from a thorough evaluation of the facts in each case. Although the Demetrio court did not invoke an “insurable interest” analysis, that is what the case ultimately boiled down to. While “insurable interest” questions most frequently arise in the context of coverage continuity, the most fundamental application of this notion asks whether the insured ever obtained the estate or interest insured by the policy.