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Degueyter v. First American Title Co.

Court of Appeals of Louisiana, Third Circuit

October 25, 2017

LYDIA DEGUEYTER
v.
FIRST AMERICAN TITLE COMPANY

         APPEAL FROM THE SIXTEENTH JUDICIAL DISTRICT COURT PARISH OF ST. MARTIN, DOCKET NO. 83328 HONORABLE KEITH R. J. COMEAUX, PRESIDING

          Jonathan R. Villien William W. Stagg Durio, McGoffin, Stagg & Ackermann, P.C. ATTORNEY FOR PLAINTIFF/APPELLANT Lydia Degueyter

          Steven W. Copley Phillip J. Antis, Jr. Alex B. Rothenberg Michael J. Fussell, Jr. Gordon, Arata, Montgomery, Barnett, McCollam, Duplantis & Eagan, LLC ATTORNEY FOR DEFENDANT/APPELLEE First American Title Insurance Company of Louisiana

          Court composed of Sylvia R. Cooks, Shannon J. Gremillion, and Van H. Kyzar, Judges.

          SYLVIA R. COOKS JUDGE

         On August 1, 2014, Lydia Degueyter and her brother-in-law, Charles Faul, acquired through a cash sale a one hundred percent undivided interest in a tract of land located on Snapper Road in New Iberia, Louisiana. The act of cash sale listed Nationwide Mortgage, LLC as the seller, and Lydia and Charles as the buyers. The listed price was $143, 325.00. The act of cash sale was signed and notarized on August 1, 2014, although it was not filed into the Iberia Parish conveyance records until September 3, 2014, at 4:09 p.m.

         In connection with the cash sale, on September 3, 2014, Lydia and Charles purchased a title insurance from First American Title Insurance Company. The policy specified that "[t]itle is vested in" Lydia and Charles. According to the record, the policy was effective "09/03/2014 @ 04:09 p.m. or the date of recording, whichever is later." Lydia and Charles were both listed as insureds under the policy.

         Charles also transferred his entire undivided interest to Lydia by a donation inter vivos, which according to the donation was "done and passed in Lafayette Parish, Louisiana, on the 2nd day September, 2014." The donation was properly recorded with the Iberia Parish Clerk of Court on September 3, 2014 at 4:09 p.m. at the same exact time the act of cash sale was recorded and the First American policy went into effect.

         In April of 2015, Lydia attempted to obtain financing from Farmers Merchants Bank & Trust Company (hereafter FM Bank), using the property on Snapper Road as collateral. However, her application for financing was denied by FM Bank due to the presence of multiple judgments attached to the property. Upon further investigation, Lydia discovered the recordation of ten judgments or tax liens in favor of third parties against Charles and his various business entities, which attached to the property upon his acquiring an interest therein.

         Shortly after discovering the judgments on the property, Lydia contacted First American seeking coverage through the title policy. First American denied the claim. On November 13, 2015, Lydia filed suit against First American seeking coverage under the title insurance policy purchased on September 3, 2014. In conjunction with the filing of suit, Lydia filed a Motion for Summary Judgment, arguing there was no genuine issue of material fact as to coverage in her favor under the policy. Lydia argued she has never held marketable title to the property due to the encumbrances on the property and this was an insurable risk under the plain language of the policy.

         First American responded and filed a Cross Motion for Summary Judgment. It argued, as a matter of law, that Lydia had no claim against First American under the title insurance policy because the policy insured Lydia as to her interest as co-owner, and the judgments against Charles did not encumber and had no effect on her ownership interest.

         Both motions for summary judgment were set for hearing on August 1, 2016. Following the hearing, the trial court granted First American's motion for summary judgment and denied Lydia's motion for summary judgment. In its written reasons for judgment, the trial court found Charles' "judicial mortgages and liens attached only to his one-half interest in the Snapper property because that is all he owned." The trial court further found "Lydia has clear and unencumbered title on her undivided one-half interest in the Snapper immovable property that she originally obtained when she purchased the property with Charl[es] . . . [and] title on her undivided one-half interest in the Snapper property was the interest first insured by First American." The trial court then concluded "any judgment granting Lydia relief as requested would force [First American] to pay a claim that did not exist at the date of the policy."

         Lydia has appealed the trial court's judgment, asserting the following assignments of error:

1. The trial court manifestly erred in finding that [Charles'] outstanding judgments and liens which attached to the immovable property subject to the title insurance policy at issue did not cause the title to the property to be unmarketable as of the date of the policy, an insurable risk under the policy, and therefore that there was no coverage for [Lydia].
2. The trial court manifestly erred in finding that [Lydia's] interpretation and construction of the applicable language of the title insurance policy at issue was not reasonable.

         ANALYSIS

         Summary judgments are reviewed de novo on appeal and the reviewing court is governed by the same criteria as the trial court in determining whether the mover is entitled to judgment as a matter of law. Schroeder v. Board of Supervisors, 591 So.2d 342 (La.1991). Summary judgment is appropriate when there remains no genuine issue as to material fact and the mover is entitled to judgment as a matter of law. La.Code Civ.P. art. 966. Summary judgments are now favored in Louisiana and shall be construed to accomplish the ends of just, speedy, and inexpensive determination of allowable actions. La.Code Civ.P. art. 966.

         The mover bears the burden of proof. La.Code Civ.P. art. 966. Once the mover has made a prima facie showing that the motion shall be granted, the burden shifts to the adverse party to present evidence demonstrating that material factual issues remain. Luther v. IOM Company, LLC, 13-353 (La. 10/15/13), 130 So.3d 817. If the adverse party fails to do so, there is no genuine issue of material fact and summary judgment will be granted. Id.

         The parties largely agree on the facts of this case. The issue herein is the interpretation and application of the title insurance policy issued by First American. "Interpretation of an insurance policy usually involves a legal question that can be properly resolved in the framework of a motion for summary judgment." Kirby v. Ashford, 15-1852, p. 5 (La.App. 1 Cir. 12/22/16), ...


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