Michael R. Pike, and Chassidy L. Pike v. Conestoga Title Insurance Co.

Sep 28 2015, 9:19 am

ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE
Richard Wayne Greeson Elizabeth J. Wysong Berg
Connersville, Indiana Goodin Abernathy, LLP
Indianapolis, Indiana

IN THE
COURT OF APPEALS OF INDIANA

Michael R. Pike, and Chassidy September 28, 2015
L. Pike, Court of Appeals Case No.
Appellants-Plaintiffs, 16A05-1501-CT-27
Appeal from the Decatur Circuit
v. Court
The Honorable John A. Westhafer,
Conestoga Title Insurance Co., Judge
Appellee-Defendant. Trial Court Cause No.
16C01-0902-CT-44

Brown, Judge.

Court of Appeals of Indiana | Opinion 16A05-1501-CT-27 | September 28, 2015 Page 1 of 9
[1] Michael and Chassidy Pike appeal the trial court’s grant of summary judgment

in favor of Conestoga Title Insurance Company. The Pikes raise two issues,

which we consolidate and restate as whether the trial court erred in granting

Conestoga’s summary judgment motion. We affirm.

Facts and Procedural History

[2] On December 31, 2003, the Pikes purchased a home in Greensburg for $82,000.

They secured the loan used to purchase the house by executing a mortgage in

favor of First Franklin Financial Corporation. Conestoga issued a title

insurance policy to the Pikes on January 13, 2004. The policy provides in

relevant part as follows:

3. Notice of Claim to be Given to Insured Claimant

The insured shall notify the company promptly in writing . . . in
case knowledge shall come to an insured hereunder of any claim
of title or interest which is adverse to the title of the estate or
interest, as insured, and which might cause loss or damage for
which the Company may be liable by virtue of policy . . . . If
prompt notice shall not be given to the Company, then as to the
insured all liability of the Company shall terminate with regard to
the matter or matters for which prompt notice is required;
provided however, that failure to notify the Company shall in no
case prejudice the rights of any insured under this policy unless
the Company shall be prejudiced by failure and then only to the
extent of the prejudice.

Appellant’s Appendix at 176. The policy defines knowledge as “actual

knowledge, not constructive knowledge or notice which may be imputed to an

insured by reason of the public records . . . .” Id.
Court of Appeals of Indiana | Opinion 16A05-1501-CT-27 | September 28, 2015 Page 2 of 9
[3] First Franklin subsequently sold and assigned the Pikes’ mortgage to Wells

Fargo Bank, which failed to record the assignment in the Decatur County

Recorder’s Office. Wells Fargo contracted with HomEq Servicing to service

the mortgage and manage the escrow account from which taxes on the property

were to be paid.

[4] In June 2006, Connersville attorney Richard Wayne Greeson sent the Pikes and

First Franklin a legal notice explaining that Shammah Investments, LLC, had

purchased the Pikes’ home for $233.40 at an October 2005 tax sale for the

nonpayment of real estate taxes. Greeson, his wife, and another family

member owned Shammah, which was in the business of purchasing property at

tax sales. The legal notice advised the Pikes that they could redeem their

property by paying the tax bill and fees by the October 6, 2006 redemption

period deadline. The Pikes immediately contacted HomEq, whose

representative informed them that their taxes had been paid and that they could

ignore the notice. The Pikes did not notify Conestoga.

[5] In November, 2006, following the expiration of the redemption period, the

Pikes received a second notice of the tax sale, which advised them that

Windgate LLC intended to seek a tax deed on their property. The notice also

advised the Pikes that they had thirty days to file a written objection to the

petition with the court. Greeson, who owned Windgate with his wife, prepared

this notice as well. The Pikes again contacted HomEq and were told that all the

taxes due on the home had been paid and that they could ignore the notice.

The Pikes did not notify Conestoga.

Court of Appeals of Indiana | Opinion 16A05-1501-CT-27 | September 28, 2015 Page 3 of 9
[6] On November 29, 2006, the Decatur Circuit Court ordered the County Auditor

to execute and deliver a tax deed on the Pikes’ home to Windgate Properties.

Three months later, in February 2007, the Pikes were notified that their home

had been deeded out of their name and that they no longer owned it.

[7] The Pikes retained attorney Greeson to represent them in a claim against

Conestoga, HomEq, and Wells Fargo and subsequently learned that it was a

May 23, 2003, special assessment that had remained unpaid and led to the sale

of their home for a tax delinquency.1 In April 2007, Greeson sent a letter to

Conestoga advising the title company that the Pikes had lost their home

because Conestoga had failed to include in its title search the special assessment

that was recorded in May 2003. Greeson further explained that the Pikes had

not received any delinquency notices after they purchased the property because

all tax notices had been sent to the mortgagee. Greeson advised Conestoga that

the Pikes had suffered a total loss of their $82,000 property as well as $27,333 in

attorney fees.

[8] Two months later, Conestoga responded that it had completed its research and

review on the Pikes’ claim. Specifically, Conestoga pointed out that the tax

bills were being sent directly to the Pikes, and, in fact, Greeson, as the

1
The Pikes signed an Informed Consent for Attorney Representation in connection with Greeson’s
representation of them in this matter wherein they averred as follows: “We are fully informed that attorney
Wayne Greeson represented and has an ownership interest in Windgate Properties, LLC, the company that
obtained the tax deed on our property.” Appellant’s Appendix at 257. They further averred that they were
fully satisfied with Greeson’s representation of their legal interests in their claim.

Court of Appeals of Indiana | Opinion 16A05-1501-CT-27 | September 28, 2015 Page 4 of 9
 registered agent for both the LLC that purchased the Pikes’ home and the LLC

that held current title to the property, could not claim that the Pikes did not

have notice of the sale or redemption where he was the attorney of record who

served the notices on them. Conestoga further explained that it was denying

the Pikes’ claim because they violated the title insurance policy by failing to

notify Conestoga when they received the first notice of the tax sale and then

again when they received the second notice of the tax sale deed.

[9] In April 2009, the Pikes filed an amended complaint against Conestoga,

HomEq, and Wells Fargo. The counts against Conestoga alleged breach of

contract as well as breach of the insurer’s duty of good faith and fair dealing.

Specifically, the Pikes alleged that Conestoga failed to “uncover the Special

Assessment and wrongfully failed and refused to satisfy the Pikes’ claim.”

Appellant’s Appendix at 25. Conestoga responded to the Pikes’ complaint with

a summary judgment motion wherein it argued that the Pikes voided their title

insurance policy when they failed to notify Conestoga about the tax sale and

that it did not act in bad faith.

[10] Following a hearing, the trial court granted Conestoga’s summary judgment

motion on December 13, 2010. Specifically, the trial court concluded as

follows:

IT IS THEREFORE ORDERED that Defendant, Conestoga
Title Insurance Co., is entitled to entry of judgment that Michael
and Chassidy Pike are not entitled to any coverage under their
owners’ title insurance policy due to the failure of the Pikes to
provide Conestoga with reasonable notice and Conestoga’s

Court of Appeals of Indiana | Opinion 16A05-1501-CT-27 | September 28, 2015 Page 5 of 9
 resulting prejudice and that Conestoga did not act in bad faith in
the handling and decision to deny the Pike’s claim.

Id. at 14.

[11] The parties filed a Joint Stipulation of Dismissal with Prejudice of Bank

Defendants in December 2014, and the trial court issued an order dismissing

the bank defendants and disposing of all claims as to all parties. The Pikes

appeal the trial court’s grant of summary judgment in favor of Conestoga.

Discussion

[12] The issue is whether the trial court erred in granting summary judgment in

favor of Conestoga. We review an appeal of a trial court’s ruling on a summary

judgment motion using the same standard applicable in the trial court. Hughley

v. State, 15 N.E.3d 1000, 1003 (Ind. 2014). Summary judgment is appropriate

only if the designated evidence reveals no genuine issue as to any material fact

and the moving party is entitled to a judgment as a matter of law. Perdue v.

Gargano, 964 N.E.2d 825, 831 (Ind. 2012). All facts and reasonable inferences

drawn from the evidence designated by the parties must be construed in the

light most favorable to the non-moving party. Id.

[13] Generally the interpretation of an insurance policy presents a question of law

and is thus appropriate for summary judgment. Safe Auto Ins. Co. v. Enterprise

Leasing Co. of Indianapolis, Inc., 889 N.E.2d 392, 304 (Ind. Ct. App. 2008), reh’g

denied. A contract for insurance is subject to the same rules of interpretation as

are other contracts. Id. If the language in the insurance policy is clear and

Court of Appeals of Indiana | Opinion 16A05-1501-CT-27 | September 28, 2015 Page 6 of 9
 unambiguous, then it should be given its plain and ordinary meaning. Id.

Further, although findings and conclusions by the trial court are not required,

they offer valuable insight into the rationale for the judgment and facilitate our

review. Spudich v. N. Ind. Pub. Serv. Co., 745 N.E.2d 281, 290 (Ind. Ct. App.

2001), reh’g denied, trans. denied.

[14] The trial court explained that it granted summary judgment in favor of

Conestoga because the Pikes failed to provide Conestoga with notice of their

claim as required by the insurance policy and Conestoga did not act in bad faith

in denying it. The notice requirement is material and of the essence in

insurance contracts. Askren Hub States Pest Control Servs., Inc. v. Zurich Ins. Co.,

721 N.E.2d 270, 277 (Ind. Ct. App. 1999). Therefore, the duty to notify an

insurance company of potential liability is a condition precedent to the

company’s liability to the insured. Id. Noncompliance with notice of claim

provisions resulting in an unreasonable delay triggers a presumption of

prejudice to the insured’s ability to prepare an adequate defense. Id. at 278.

[15] The notice provision in this case requires the insured to notify Conestoga

promptly in writing “in case knowledge shall come to insured . . . of any claim

of title or interest which is adverse to the title of the estate or interest . . . and

which might cause loss of damage for which the Company might be liable by

virtue of the policy.” Appellant’s Appendix at 176. The policy defines

knowledge as actual knowledge.

Court of Appeals of Indiana | Opinion 16A05-1501-CT-27 | September 28, 2015 Page 7 of 9
[16] In this case, the designated evidence reveals that in June 2006, the Pikes

received a legal notice advising them that their home had been purchased at a

tax sale for the nonpayment of real estate taxes and that they had until October

6, 2006 to redeem their property. Again, in November 2006, the Pikes received

a second notice of the tax sale advising them that Windgate intended to seek a

tax deed on their property. The notice also advised them that they had thirty

days to file a written objection with the court.

[17] Despite these two notices which were given directly to the Pikes and advised

them of interests adverse to the title of their estate which might cause loss for

the insurance company, the Pikes failed to promptly notify Conestoga. The

Pikes clearly failed to comply with the notice provision of their Conestoga

policy.

[18] To the extent the Pikes argue that they did not have actual knowledge of their

claim until they hired Greeson in April 2007 and discovered that the tax

deficiency resulted from the failure to pay a 2003 special assessment, we note

that the contract requires no such specificity. Rather, the contract requires only

notice of an adverse claim that might cause the insurance company to be liable.

The Pikes had such knowledge as early as June 2006 and then again in

November 2006. Under the terms of the policy, the Pikes were required to

notify Conestoga at those times.

[19] We further note that to the extent the Pikes argue that they did not have

knowledge of their claim because they are unsophisticated, we note that

Court of Appeals of Indiana | Opinion 16A05-1501-CT-27 | September 28, 2015 Page 8 of 9
 insureds have a duty to read and to know the contents of their insurance

policies. See Safe Auto, 889 N.E.2d at 397.

Conclusion

[20] For the foregoing reasons, we affirm the trial court’s order entering summary

judgment in favor of Conestoga.

[21] Affirmed.

Riley, J., and Altice, J., concur.

Court of Appeals of Indiana | Opinion 16A05-1501-CT-27 | September 28, 2015 Page 9 of 9