Issue: Whether a title company has a duty to defend against a fraudulent conveyance claim.
|Area of Law:||Insurance Law|
|Keywords:||Duty to defend; Fraudulent conveyance claim|
|Cited Cases:||442 S.E.2d 660; 264 F.2d 883; 718 N.Y.S.2d 82; 859 F.2d 772; 835 P.2d 572; 209 P.3d 859; 734 P.2d 732; 209 S.W.3d 870; 670 S.E.2d 154; 586 N.Y.S.2d 362; 595 F. Supp. 630; 801 A.2d 61; 318 N.Y.S.2d 303; 916 P.2d 435|
Generally speaking, a title insurer is required to defend only those cases that fall within the policy coverage, and courts will look solely to the allegations in the complaint, liberally construed, to determine if this standard is met. Koenig v. First Am. Title Ins. Co., 209 S.W.3d 870 (Tex. App.—Houston 2006). In determining whether a duty to defend exists, courts have recognized an “eight corners rule,” which requires that the court look solely at the allegations in the complaint (within its four corners) in light of the policy provisions (within the four corners of the policy, hence eight total corners), regardless of the truth of those allegations, and ignoring extrinsic evidence. Stevens v. United Gen. Title Ins. Co., 801 A.2d 61 (D.C. 2002); Koenig, 209 S.W.3d 870. Stated another way, when reviewing the pleadings, the court must accept as true the facts alleged by the underlying plaintiff, to determine whether they come within the coverage under a title insurance policy, liberally construing the pleadings in a fair and reasonable manner in the insured’s favor. Koenig, 209 S.W.3d 870; Ticor Title Ins. Co. v. American Resources, Ltd., 859 F.2d 772 (9th Cir. 1988).
There is no duty to defend when there is no potential for coverage under the title insurance policy, such as when the attack on the insured’s title is not of a type against which the company has insured. Bidart v. […]