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Home > Underwriting > Title News > Fifteen Volume Nine

SERIES: Fifteen VOLUME: Nine DATED: September, 2000

~MONROE-GORMAN TITLE AGENCY, LLC~

On September 7th Tom Moonan and Mike Gorman announced the formation of a joint venture for the purpose of providing a full range of title insurance and abstract services in Wayne County. This new joint venture is known as Monroe-Gorman Title Agency, LLC. Mike together with his able staff, Heidi Brague, Judy Shumway , Patty Youngman and Margaret (Mike) Jones commenced business on Monday, September 11th in the former Monroe Title office located at 34 William Street in Lyons. Anyone requiring abstract or title insurance services in Wayne County, who wants that work done by the most experienced and capable available personnel, should contact Monroe-Gorman at 315-946-9181 or by fax at 315-946-9885.

The formation of this joint venture and the return of Mike Gorman and his outstanding staff to Monroe's extended family is an exciting development and we wish Mike all the best in his new business venture.

~NEIGHBOR DENIED PRESCRIPTIVE RIGHT TO USE OF DRIVEWAY STRADDLING COMMON BOUNDARY LINE~

A recent Appellate Division decision, Northtown, Inc. v. Vivacqua (Appellate Division Fourth Department, decided May 10, 2000), upheld a lower court's denial of a property owner's request for prescriptive easement over the portion of a driveway (which straddled a common boundary) located on an adjacent neighbor's side of their joint property line. The Court in the Northtown case issued the following statement of law concerning prescriptive rights in a driveway located on a common boundary:

"This action involves a dispute over the right of defendants to use a driveway straddling the common boundary line between their property, where their insurance business is located, and property owned by plaintiff known as Northtown Plaza. The properties are separated by a driveway 30 feet in width, 5 1/2 feet of which is located on defendants' property and 24 1/2 feet of which is located on plaintiff's property. That driveway is commonly used by the public to enter and exit both Northtown Plaza and defendants' business. Plaintiff commenced this action seeking to enjoin defendants from trespassing on that part of the driveway located on plaintiff's property.
Supreme Court properly denied the motion of defendants seeking dismissal of the complaint and judgment on their counterclaim declaring that they have acquired a prescriptive easement over plaintiff's portion of the driveway and granted the cross motion of plaintiff for summary judgment. Defendants failed to meet their burden of establishing by clear and convincing evidence that their use of the driveway was adverse, open and notorious, continuous and uninterrupted for the prescriptive period of 10 years (see RPAPL 311...). Because defendants' use of the driveway was in common with the general public, defendants had to show 'some distinctive and decisive act on [their] or [their] predecessors' part indicating and exercise of exclusive right sufficient to notify the owner of the user and of the claim of right'... Defendants admitted that they made no attempt to seize plaintiff's portion of the driveway and presented no evidence that they asserted an exclusive right to use the driveway.
Furthermore, because defendants' use of the driveway was initially permissive in nature, 'it was incumbent upon [defendants] to show the assertion of a hostile right which is made known to the property owner...'. Defendants failed to present proof of any act on their part that would provide notice to plaintiff of a hostile claim of right to use plaintiff's portion of the driveway. We reject the contention of defendants that the element of adverse use may be presumed by the parties' reciprocal use of the driveway. Although the adverse use requirement needed to establish a prescriptive easement may be inferred from reciprocal use of a driveway located along a common boundary line... defendants failed to establish that the driveway in question was used in a reciprocal adverse manner by the parties... While defendants had a need to use plaintiff's portion of the driveway, plaintiff had no similar need to use defendants' portion of the driveway. Thus, this is not a true reciprocity case but rather a case of 'mere permissive use over the land of another [that] will never ripen into an easement...
Because plaintiff in its motion sought, inter alia, a declaratory judgment, the court should have declared the rights of the parties... We modify the judgment, therefore, by granting judgment in favor of plaintiff declaring that plaintiff has the exclusive right to own, use and possess the 24 1/2 feet of the Bailey Avenue driveway located on its property."

~ TITLE POLICY HELD NOT TO INSURE DAMAGES CAUSED BY OVER-APPRAISAL OF INSURED PROPERTY ~

A recently decided case, Mortgage Bankers Corp. v. Nations Title Insurance of New York, Inc. (Appellate Division, Second Department, decided August 15, 2000) has, in a brief decision, defined the limits of title coverage once again and denied an insured's claim of damages caused by its own over-appraisal of the property insured. The Court in Mortgage Bankers Corp. summarized the applicable title insurance law as follows:

"The plaintiff asserts that the defendant, a title insurance company, failed to perform its obligations under a title insurance policy that the plaintiff obtained from it in connection with a mortgage loan given by the plaintiff to an individual who falsely represented his identity. The loan went into default, and the plaintiff successfully foreclosed and purchased the property at the foreclosure sale. In attempting to sell the property, the plaintiff discovered that it had been over-appraised and was worth significantly less than the amount of its loan. After the second cause of action was dismissed, the defendant moved for summary judgment dismissing the first cause of action asserted in the complaint, which was to recover damages for breach of contract. The Supreme Court denied the motion, and we reverse.
It is well settled that '[a] title insurer's obligation to indemnify is defined by the policy itself and limited to the loss in value of the title as a result of title defects against which the policy insures' (Citibank v. Chicago Tit. Ins. Co. of New York, 214 A.D. 2d 212, 221). '[A] policy of title insurance is a contract by which the title insurer agrees to indemnify its insured for loss occasioned by a defect in title' (Smirlock Realty Corp. v. Title Guar. Co., 52 N.Y. 2d 179, 188; see, Insurance Law § 6401 Ins.). 'Such a policy entitles the insured to indemnity only to the extent that its security is impaired and to the extent of the resulting loss which it sustains' (Diversified Mtge. Investors v. U.S. Life Tit. Inc. Co., 544 F. 2d 571, 574, n 2; see, Halfmoon Professional Offs. v. American Tit. Ins. Co., 235 A.D. 2d 801).
Contrary to the plaintiff's contention, inasmuch as a valid title was transferred, and it received a valid and enforceable first mortgage lien on the property, as evidenced by its ability to successfully foreclose, the defendant satisfied its obligations under the policy (see, Citibank v. Chicago Tit. Ins. Co., supra, at 222)."

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