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A TAX FORECLOSURE SALE OF THE SERVIENT ESTATE SUBSEQUENT TO THE PLAINTIFFS’ PURCHASE OF TITLE INSURANCE WAS NOT A TITLE DEFECT WHICH ENTITLED THE TITLE INSURANCE COMPANY, AS A MATTER OF LAW, TO DENY PLAINTIFFS’ CLAIM, THE CLAIM STEMMED FROM THE CONSTRUCTION OF A FENCE ACROSS AN EASEMENT ON THE SERVIENT ESTATE WHICH WAS THE ONLY ACCESS TO PLAINTIFFS’ PROPERTY (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined defendant title insurance company should not have been granted summary judgment supporting its denial of plaintiffs’ title insurance claim.  A fence had been constructed across an easement on the servient estate which blocked plaintiffs’ access to their property. Years after the title insurance was purchased and before the fence was constructed, the servient was the subject of a tax foreclosure and sale. The Second Department held that the tax sale was not a title defect which justified, as a matter of law, denial of the claim by the title insurance company:

… [P]laintiffs purchased a policy of title insurance from the defendant Old Republic National Title Insurance Company (hereinafter Old Republic), dated January 17, 2007. The policy specifically insured against losses or damages sustained as a result of the plaintiffs’ “[l]ack of a right of access to and from the land.” The policy excluded from coverage “[d]efects, liens, encumbrances, adverse claims, or other matters . . . attaching or created subsequent to Date of Policy.” …

Contrary to Old Republic’s contention, if the plaintiffs acquired a valid easement appurtenant from [plaintiffs’ predecessors in title] in 2007, such easement would not have been extinguished by the 2013 tax sale … . Thus, Old Republic’s contention that the 2013 tax sale constituted a defect, lien, encumbrance, adverse claim or other matter “attaching or created subsequent to Date of Policy” within the meaning of the relevant policy exclusion is without merit, and cannot serve to establish Old Republic’s prima facie entitlement to judgment as a matter of law. Buroker v Phillips, 2019 NY Slip Op 01386, Second Dept 2-27-19

 

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