J-S84018-16
2017 PA Super 99
GEORGE E. MICHAEL IN THE SUPERIOR COURT OF
PENNSYLVANIA
v.
JUDITH STOCK
JUDITH STOCK
v.
COMMONWEALTH LAND TITLE
INSURANCE COMPANY AND
EDWARD J. MORRIS, ESQUIRE
GEORGE E. MICHAEL
v.
TOHICKON ABSTRACT COMPANY
APPEAL OF: JUDITH STOCK
No. 1229 EDA 2016
Appeal from the Order Entered April 17, 2013
In the Court of Common Pleas of Bucks County
Civil Division at No(s): 2007-10687-19-1
BEFORE: OLSON, J., SOLANO, J., and FITZGERALD, J.*
OPINION BY SOLANO, J.: FILED APRIL 11, 2017
Appellant Judith Stock appeals from the order denying her motion for
partial summary judgment and granting a cross-motion for summary
judgment by Appellee Commonwealth Land Title Insurance Company (“Land
____________________________________________
*
Former Justice specially assigned to the Superior Court.
J-S84018-16
Title”). For the reasons that follow, we vacate the trial court’s order and
remand for further proceedings.
This case arose out of a failed real estate transaction. Stock attempted
to sell to George Michael property in the Borough of Bristol, Bucks County,
that was comprised of two lots (A and B). Stock and Michael initially believed
that Stock held title to both lots, but, in fact, she did not hold title to Lot B.
When Michael discovered the title problem, he withdrew from the transaction
and sued Stock, seeking compensation for money he spent in reliance on the
contract of sale. Stock then filed a third-party complaint against Land Title,
which had issued her a title insurance policy and provided other services
when she purportedly purchased Lots A and B. Stock and Land Title filed
cross-motions for summary judgment. Stock now appeals the trial court’s
order denying her motion and granting that of Land Title.
The property at issue is located at 4 Mill Street in Bristol, and is
currently identified for tax purposes as Bucks County Tax Map Parcel
Number 4-18-28. Trial Ct. Op., 4/22/13, at 1.1 The trial court explained:
[T]he subject property is comprised of two parcels. The first
parcel (“Lot A”) contains a three-story building and a free-
standing, one-story garage. The three-story building has been
operated as a hotel and restaurant. The title of Lot A is
marketable. Daniel T. Pezzola, Jr., Alfred T. and Elaine G.
____________________________________________
1
The trial court issued an opinion on April 22, 2013, explaining its rulings on
several motions for summary judgment, including the two at issue in this
appeal. On May 25, 2016, the trial court issued another opinion, in response
to Stock’s Pa.R.A.P. 1925(b) statement.
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Pezzola, and Daniel D. and Janet Pezzola (collectively “Pezzolas”)
held title to Lot A until they conveyed it to Stock in 1999.
The history of the second lot (“Lot B”) is as follows: The Borough
of Bristol transferred Lot B, in fee, to the Pezzolas by deed dated
May 9, 1994. Lot B was a portion of the larger Tax Map Parcel
Number 4-18-29 that the Borough of Bristol owned. The
transaction severed Lot B from Parcel Number 4-18-29. On
January 23, 1995, the Bucks County Board of Assessment
updated its tax map parcel records to reflect that Lot B merged
with Lot A, and both collectively became known as Bucks County
Tax Map Parcel Number 4-18-28. However, the metes and
bounds descriptions contained in the deeds to Lot A and B were
not updated to reflect this merger. Lot B is unimproved.[2]
Id. at 2-3. Thus, as of 1999, the Pezzolas owned both Lots A and B. They
had acquired Lot A through a series of transfers, the last of which were
recorded in deeds dated 1991 and 1998. They acquired Lot B in 1994, but
the deeds for the two properties were not formally merged at that time. Trial
Ct. Op., 5/25/16, at 10.
On February 26, 1999, the Pezzolas entered into an Agreement to sell
to Stock “the hotel liquor business located on 4 Mill Street, Borough of
Bristol, Bucks County, Pennsylvania . . . .” Second Am. Third-Party Compl.,
Ex. A ¶ 1.3 The Agreement provided, “[s]eller further agrees to sell and the
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2
Although Lot B is substantially unimproved, the parties agree that a small
portion of a concrete deck and sidewalk servicing the hotel and restaurant is
located on that parcel. See Appellee’s Brief at 5.
3
The Agreement recited that the sellers (under the name “DDA, Inc.”)
operated a business (referenced in the Agreement as the “hotel liquor
business”) at 4 Mill Street that held a hotel liquor license and was called
“Bristol House.” It also recited that the real estate at 4 Mill Street was held
by the Pezzolas and said that Stock and her husband (now deceased)
(Footnote Continued Next Page)
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Buyer agrees to purchase all real estate located and connected to the
aforesaid property . . . .” Id ¶ 3.4 The Pezzolas agreed to convey title to the
property that was “good and marketable and such as will be insured at
regular rates by any title company recognized in the Commonwealth of
Pennsylvania.” Id. ¶ 14. Stock agreed to “immediately, upon execution of
this Agreement, order the necessary title insurance search” and to “pay for
the title insurance, title search and title certificate.” Id. ¶ 18.
Stock alleges that she then entered into a contract under which Land
Title agreed to provide “real estate transactional services” — including title
searches and the drafting and filing of a deed — for her purchase of the
property, and to issue a policy insuring title to the property. Second Am.
Third-Party Joinder and Compl. ¶¶ 5-6, 8, 53. On May 3, 1999, Stock
obtained a Title Insurance Commitment from Land Title. Trial Ct. Op.,
4/22/13, at 3. The Commitment stated:
SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE
EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B
AND THE CONDITIONS AND STIPULATIONS, COMMONWEALTH
LAND TITLE INSURANCE COMPANY . . . insures, as of Date of
Policy shown in Schedule A, against loss or damage, not
_______________________
(Footnote Continued)
desired to buy the business, “together with the real estate situate at 4 Mill
Street.” Agreement, pp. 1-2.
4
The contract stated that the real estate was “more particularly described in
Exhibit ‘B’ attached hereto and made a part hereof.” This Exhibit B is not in
the record, and it appears that no party has been able to locate it. As
discussed in the text, however, both Stock and the Pezzolas agree that the
intent of the 1999 transaction was to convey both Lots A and B.
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exceeding the Amount of Insurance stated in Schedule A,
sustained or incurred by the insured by reason of:
1. Title to the estate or interest described in Schedule A being
vested other than as stated therein;
2. Any defect in or lien or encumbrance on the title;
3. Unmarketability of the title;
4. Lack of a right of access to and from the land.
Id. at 12.
Schedule A of the Commitment provided, in relevant part:
The land referred to in this Commitment is described below and
in Schedule C attached hereto and made a part hereof.
Note For Information Only:
The land referred to in this Commitment is commonly known as:
4 Mill Street
Bristol Borough
Bucks County, Pennsylvania.
Trial Ct. Op., 4/22/13, at 12, quoting Title Insurance Commitment, Sched.
A. Schedule C contained the following description:
ALL THAT certain messuage, restaurant, Hotel Property, Store
and other buildings, and Lot of land, situate in the First Ward of
the Borough of Bristol, in the County of Bucks and State of
Pennsylvania, bounded and described according to a survey
thereon made by John P. Taylor C.E., on February 15, 1928 as
follows, to wit:
BEGINNING at a point in the Southwest side of Mill Street, at a
corner of land now or late of Lewis J. Bevan, thence along the
said side of Mill Street, South 52 degrees 35 minutes East 96.60
feet to an angle, thence still along the same, South 40 degrees
19 minutes 35 seconds East 27.83 feet more or less to a stone
set for a corner in land now or late of the Delaware Division
Canal Company of late the Canal Basin, thence following the line
of what was formerly the line of the said Canal Basin and now
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land of the said Canal Company in a circular direction the
following courses and distances: South 53 degrees 02 minutes
West 31.60 feet to an angle, thence South 54 degrees West
34.40 feet to an angle; thence South 66 degrees 59 minutes
West 132.00 feet to a corner in the said Canal Basin, thence
along the Canal Basin, North 46 degrees 16 minutes West 43.10
feet to a corner in land now or late of Lewis J. Bevan, thence
along same North 37 degrees 59 minutes East 180.40 feet to the
place of beginning.
BEING LOT NUMBER 4 on said Plan[5]
COUNTY PARCEL NUMBER 4-18-28.
Title Insurance Commitment, Sched. C. It is undisputed that the metes and
bounds set forth in Schedule C describe only Lot A. Trial Ct. Op., 4/22/13, at
3. In fact, the description of the property in the Commitment, including the
metes and bounds and the lot number and County Parcel Number
references, is the same as that in a 1991 deed by which the Pezzolas
obtained title to the property at 4 Mill Street — at a time when that property
did not yet include Lot B.6 Stock claims that when she received that
description in Schedule C, she did not know that it encompassed only Lot A.
On June 21, 1999, Stock received a deed conveying the property from
the Pezzolas to Stock. Stock alleges that Land Title was responsible or
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5
Neither the parties nor the trial court address the reference to “said Plan”
or direct us to the location of this plan in the record, and we have been
unable to determine with confidence whether the plan is in the record.
6
The 1991 deed (9/19/91 deed from Bethels to Pezzolas) refers to “Bucks
County Uniform Parcel Identifier: Tax Parcel Number 4-18-28,” while the
Commitment refers to “County Parcel Number 4-18-28.” There is no
substantive difference between the two descriptions.
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shared responsibility for preparing that deed. Second Am. Third-Party
Compl. ¶ 8. The deed contained the same metes and bounds description, lot
number, and parcel number as that in the Title Insurance Commitment. Trial
Ct. Op., 4/22/13, at 3; Plaintiff’s Compl. Ex. C (1999 deed). Stock claims
that she did not know that this description included only Lot A.
After the closing of the transaction between Stock and the Pezzolas,
Land Title issued a Title Policy to Stock. The Policy7 insures against “[t]itle to
the estate or interest described in Schedule A being vested other than as
stated therein.” Owner’s Policy of Title Insurance, p. 1. Schedule A to the
Policy is a description of the property that is identical to Schedule C of the
Title Commitment, and, like the Commitment, it covers “ALL THAT certain
messuage, restaurant, Hotel Property, Store and other buildings, and Lot of
land” described by a metes and bounds recitation that encompasses only Lot
A. With some circularity, the policy defines the term “land” as —
the land described or referred to in Schedule A, and
improvements affixed thereto which by law constitute real
property. The term “land” does not include any property beyond
the lines of the area described or referred to in Schedule A . . . .
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7
The parties agree that a Title Policy was issued, but they have been able to
locate only the schedules to that policy. Appellant’s Brief at 6-7; Appellee’s
Brief at 6. For purposes of this litigation, Land Title provided an exemplar of
the Title Policy, including the “policy jacket” and schedules it claims were
actually issued to Stock. Appellee’s Brief at 6. Both Stock and Land Title rely
upon the definition of “land” in the policy exemplar provided by Land Title.
Appellant’s Brief at 13; Appellee’s Brief at 19. We accept the parties’ joint
reliance on this provision as a stipulation that the policy contained that
definition.
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Trial Ct. Op., 4/22/13, at 13 (quoting policy). Schedule B to the policy lists
exceptions to coverage, including a “survey exception” that applies to
“[u]nrecorded easements, discrepancies or conflicts in boundary lines,
shortages in area and encroachments which an accurate and complete
survey would disclose.” Appellant’s Brief at 22; Appellee’s Brief at 34
(quoting policy).
On August 1, 2006, Stock and Michael entered into an agreement
whereby Stock would sell to Michael “all that certain tract or parcel of land,
including any buildings and other improvements located thereon, being Tax
map Parcel No. 4-18-028,” for $2.2 million. Agreement of Sale ¶¶ 1-2. At
that time, Stock and Michael believed that both Lots A and B were included
in the property to be conveyed. Michael paid Stock $120,000 in deposits and
incurred additional expenses to obtain approvals for his planned
development of the property. Trial Ct. Op., 4/22/13, at 3-4.
Prior to the closing, on March 27, 2007, Michael advised Stock that the
1999 deed had not transferred Lot B to Stock. Stock contacted Land Title,
and a Land Title employee suggested that Stock cure the defect in title
through a Deed of Confirmation. However, on June 8, 2007, Michael
informed Stock that the Deed of Confirmation would not cure the defect. On
September 17, 2007, Stock provided Land Title with a written notice of a
claim under the Title Insurance Policy. On September 25, 2007, Michael
withdrew from the sale due to the lack of clear title. On October 5, 2007,
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Land Title denied Stock’s insurance claim. Trial Ct. Op., 4/22/13, at 4. In
February 2008, the Pezzolas executed a Deed of Confirmation that stated
that their 1999 deed was intended to convey both Lots A and B to Stock.
Id.8
On December 20, 2007, Michael sued Stock, seeking the return of his
$120,000 deposit and repayment of expenses he incurred in reliance on the
Agreement of Sale. Stock then filed a third-party complaint against Land
Title and Edward J. Morris, Esquire, who represented her in the 1999
purchase of the property from the Pezzolas. With respect to Land Title,
Stock’s pleading (as amended) asserted the following claims: breach of the
Insurance Policy and Commitment (Count I); bad faith (Count II); breach of
a contract to provide professional services (Count III); negligence (Count
IV); and indemnification (Count VII).9
On August 6, 2012, Stock filed a motion for partial summary judgment
against Land Title, seeking entry of judgment in her favor with respect to
Counts I (breach of the Insurance Policy and Commitment) and II (bad
____________________________________________
8
After receiving the deed of confirmation, Stock learned of an additional title
defect relating to Lot B: a restriction that required the land to be perpetually
maintained as a public park. Trial Ct. Op., 4/22/13, at 4. Because Stock’s
failure to receive any title to Lot B presents a more fundamental title
problem than that relating to restrictions on Lot B’s use, we limit our
discussion in the text to only the failure to convey title.
9
Stock makes no argument in her appeal regarding Count VII, and any
issues relating to that count therefore are waived. Counts V and VI were
against Morris and are not at issue in this appeal.
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faith). On August 30, 2012, Land Title filed a cross-motion for summary
judgment, seeking judgment in its favor with respect to all claims Stock had
brought against it.
After a hearing on February 6, 2013, the trial court issued an order
dated April 17, 2013, denying Stock’s motion and granting that of Land
Title.10 In an opinion dated April 22, 2013, the trial court explained:
[Land Title] did not breach the Commitment. [Land Title] did not
have any obligation to Stock to indemnify or defend her title to
Lot B because the Commitment insured only Lot A. . . .
Additionally, Stock cannot recover on her claims for negligence
and bad faith because [Land Title] had no duty to insure the title
to Lot B.
Trial Ct. Op., 4/22/13, at 14.
On April 6, 2016, Stock filed a praecipe to mark her remaining claims
against Morris “settled, discontinued and ended.”11 On April 20, 2016, Stock
filed a notice of appeal from the April 17, 2013 order.
In this appeal, Stock raises the following twelve issues, as stated in
her brief:
1. Did the insurance policy issued by Commonwealth Land Title
Insurance Company . . . cover Lot B as well as Lot A which lots
combined to form County Parcel Number 4-18-28?
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10
The trial court also entered summary judgment in favor of Michael and
against Stock in the amount of $120,000.
11
Michael had also filed a Third Party Complaint against Tohickon Abstract
Company. On August 8, 2012, Michael filed a praecipe to mark the case
against Tohickon as settled, discontinued, and ended. Thus, as of April 6,
2016, when Stock filed her praecipe, there were no outstanding claims.
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2. Must the insurance Policy be read as referring to the Bucks
County Tax Identifier which is also County Parcel Number 4-18-
28?
3. Was the filing of a subdivision plan merging Lot B into County
Parcel 4-18-28 sufficient to satisfy the requirements of the
Uniform Parcel Identifier Law, 21 P.S. § 331 et seq.?
4. Did the definition of public records in the Policy give rise to a
duty on the part of [Land Title] to search the public records and
discover the subdivision plan merging Lot B into County Parcel
Number 4-18-28?
5. Was [Land Title] estopped from denying coverage where the
incorrect legal description utilized in the Policy and the Deed
resulted from its own failure to properly search the public
records?
6. Was Judith Stock (“Stock”) entitled to Partial Summary
Judgment on the issue of liability under the Policy?
7. Was Lot B excluded by the survey exception in the Policy?
8. Did [Land Title] have a duty to defend the potentially covered
claims advanced by Plaintiff, George Michael (“Michael”)?
9. Was [Land Title] entitled to Summary Judgment as to Count II
of Stock’s Second Amended Joinder Complaint alleging bad faith?
10. Was Stock entitled to partial summary judgment as to
liability on her bad faith claims against [Land Title]?
11. Was [Land Title] entitled to Summary Judgment as to Count
III of Stock’s Second Amended Joinder Complaint alleging breach
of professional services contract?
12. Was [Land Title] entitled to Summary Judgment as to Count
IV of Stock’s Second Amended Joinder Complaint alleging
negligence?
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Appellant’s Brief at 2-4.12
In reviewing an order granting or denying summary judgment, this
Court applies the following principles:
Our scope of review of a trial court’s order granting or denying
summary judgment is plenary, and our standard of review is
clear: the trial court’s order will be reversed only where it is
established that the court committed an error of law or abused
its discretion.
Summary judgment is appropriate only when the record clearly
shows that there is no genuine issue of material fact and that
the moving party is entitled to judgment as a matter of law. The
reviewing court must view the record in the light most favorable
to the nonmoving party and resolve all doubts as to the
existence of a genuine issue of material fact against the moving
party. Only when the facts are so clear that reasonable minds
could not differ can a trial court properly enter summary
judgment.
Shamis v. Moon, 81 A.3d 962, 968-69 (Pa. Super. 2013) (citation omitted).
In light of these principles, we conclude that the trial court erred in granting
summary judgment to Land Title on all of Stock’s claims.
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12
Land Title argues that Stock waived all issues for appeal because her
Appellate Rule 1925(b) statement, which raised sixteen issues, was not
“concise.” Appellee’s Brief at 15-17. We decline to find waiver on this basis.
See Pa.R.A.P. 1925(b)(4)(iv) (“Where non-redundant, non-frivolous issues
are set forth in an appropriately concise manner, the number of errors raised
will not alone be grounds for finding waiver”); Boehm v. Riversource Life
Ins. Co., 117 A.3d 308, 319 n.3 (Pa. Super.) (declining to find waiver where
Appellant raised 36 claims in Rule 1925(b) statement, but trial court
addressed general issues and case was complex), appeal denied, 126 A.3d
1281 (Pa. 2015).
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Counts III and IV (Questions 11 and 12)
Before addressing Stock’s individual issues, we believe it helpful to
restate the breadth of Stock’s claims. According to Stock’s complaint, she
entered into an Agreement of Sale to buy the hotel and restaurant at 4 Mill
Street from the Pezzolas. The sale included all real estate “situate at 4 Mill
Street” and “located and connected to the aforesaid property.” Agreement at
1-2. Stock was required under the Agreement to obtain title insurance for
the premises, and she alleges she entered into an agreement with Land Title
that not only provided for title insurance, but also for such ancillary “real
estate transactional services” as title searches and, critically, drafting and
filing of the deed to the premises. But Stock claims she did not receive what
she bargained for. Instead, the title search failed to disclose that 4 Mill
Street consisted of two parcels that had not been merged, the deed that she
received gave her title only to Lot A, and the title policy insured her title only
to Lot A — meaning that she did not end up owning all of the real estate
“situate at 4 Mill Street” and “located and connected to the aforesaid
property.” Stock claims that Land Title is responsible for these errors.
Stock’s claim has its broadest expression in Counts III and IV of her
amended third-party complaint, which allege that because she did not
receive good and marketable title to Lot B, Land Title breached its contract
to provide “real estate transactional services” and was negligent in
performing title searches and providing other services that led to the error.
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Land Title denies liability under these counts. Although it admits that it acted
as “settlement agent” and “prepared and/or assisted in the preparation and
dissemination of various papers, agreements and contracts related to the
conveyance of the property,” it specifically denies drafting the deed. Answer
¶¶ 6, 8. These denials give rise to material issues of disputed fact that
preclude summary judgment.
Land Title sought summary judgment on Counts III and IV on the
basis of Paragraph 15(b) of the Title Policy that it issued to Stock.
Paragraph 15(b) states:
Any claim of loss or damage, whether or not based on
negligence, and which arises out of the status of the title to the
estate or interest covered hereby or by an action asserting such
claim, shall be restricted to this policy.
Owner’s Policy of Title Insurance ¶ 15(b).13 Land Title argued that for
purposes of this provision, Stock’s claims under Counts III and IV should be
treated as arising out of the “status of the title . . . covered” by the Policy
that Land Title issued to Stock, and that any recovery on those claims
therefore must be pursuant to, and restricted by, the terms of that Policy.
But at the same time as it makes this argument, Land Title also contends —
indeed, it insists — that because Stock’s claim relates to title to Lot B, Stock
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13
Because the parties have been unable to locate the full Policy, Land Title
relies on Paragraph 15(b) as set forth in the exemplar that it filed with its
summary judgment motion. Stock has not claimed that her Policy did not
include this provision.
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has no viable claim arising “out of the status of the title to the estate or
interest covered” by its Policy because, under Schedule A to the Policy, Land
Title insured title only to Lot A and the Policy therefore does not cover title
to Lot B. If the Policy does not cover the failure to convey good title to Lot B,
then Stock’s claims relating to breaches and negligence with respect to Lot B
cannot fall within the scope of Paragraph 15(b) of the Policy.
The trial court did not extensively discuss Counts III and IV. It said
merely that Land Title had committed to insure only Lot A and, therefore,
“Stock cannot recover on her claims . . . because [Land Title] had no duty to
insure the title to Lot B.” Tr. Ct. Op., 4/22/13, at 14. That conclusion lost
sight of the full scope of Stock’s claim, which was that Land Title had
undertaken to provide insurance and other services with respect to all of the
land she was buying from the Pezzolas. The trial court’s entry of summary
judgment for Land Title on these counts therefore was error.
Count I (Questions 1 to 7)
Most of the attention in the trial court and on appeal has focused on
the first count in Stock’s amended third-party complaint, which alleges
breach of the Title Insurance Policy and Commitment. Based on the
schedules attached to those documents, which contained metes-and-bounds
descriptions only of Lot A, the trial court held that the Title Insurance Policy
unambiguously covered only Lot A. Stock contends, however, that there are
ambiguities in the property descriptions, particularly as a result of the
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references in the schedules to “County Parcel Number 4-18-28.” Stock
argues that at the time the Policy was issued, Tax Parcel Number 4-18-28
included both Lots A and B. See Appellant’s Brief at 13-16. Stock also notes
that the Policy’s definition of “land” includes land “described or referred to”
in the schedule describing the insured parcel, and she contends that the
reference to the Tax Parcel Number at least constitutes a “reference” to Lot
B that should be sufficient to bring that lot within the Policy’s coverage. See
id. at 19.
As our Supreme Court explained in Kvaerner Metals Div. of
Kvaerner U.S., Inc. v. Commercial Union Ins. Co., 908 A.2d 888 (Pa.
2006):
The interpretation of an insurance policy is a question of law that
we will review de novo. Our primary goal in interpreting a policy,
as with interpreting any contract, is to ascertain the parties’
intentions as manifested by the policy’s terms. “When the
language of the policy is clear and unambiguous, we must give
effect to that language.” Alternatively, when a provision in the
policy is ambiguous, “the policy is to be construed in favor of the
insured to further the contract’s prime purpose of
indemnification and against the insurer, as the insurer drafts the
policy, and controls coverage.”
908 A.2d at 897 (internal citations and brackets omitted). A contract is
ambiguous if “it is fairly susceptible of different constructions and capable of
being understood in more than one sense.” Chester Upland Sch. Dist. v.
Edward J. Meloney, Inc., 901 A.2d 1055, 1060 (Pa. Super. 2006) (citation
omitted). “This question is not to be resolved in a vacuum. Rather,
contractual terms are ambiguous if they are subject to more than one
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reasonable interpretation when applied to a particular set of facts.” Id.
(citation omitted).
The trial court rejected Stock’s ambiguity argument, holding that, as a
matter of law, the reference to Parcel Number 4-18-28 did not include Lot B.
See Trial Ct. Op., 4/22/13, at 14. The court based this holding on Section 10
of the Deeds and Conveyancing Law of 1909, 21 P.S. § 10.1, which was
added in 1988 to implement the Uniform Parcel Identifier Law (UPIL).14
Section 10(a) provides:
In counties adopting a uniform parcel identifier system under
statutory provisions on parcel identification, all conveyances,
mortgages or releases or other instruments affecting real estate
included in the system may be made by reference to the uniform
parcel identifier of the real estate being conveyed, mortgaged,
released or otherwise affected as indicated on the recorded
county tax maps. The first conveyance, mortgage, release or
other instrument affecting real estate recorded after the
adoption of an ordinance under the statutory provisions on
parcel identification shall contain the uniform parcel identifier
assigned to the parcel or parcels affected by such instrument.
Thereafter, the first conveyance after a change of size and
description of real estate represented by a uniform parcel
identifier shall contain, in addition to the uniform parcel
identifier assigned to the parcel, or parcels affected by the
instrument, either:
(1) A metes and bounds description based on a precise
survey; or
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14
The UPIL, Act No. 1988-1, P.L. 1 (Jan. 15, 1988), 21 P.S. §§ 331-337,
sets forth a system for identifying real estate parcels on tax maps and other
records. At the time of its enactment, the Legislature made conforming
amendments to other real estate statutes. It added Section 10 to the 1909
Deeds and Conveyancing Law by Act No. 1988-3, P.L. 6 (Jan. 15, 1988).
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(2) A lot number and reference to a recorded subdivision
plan which plan on its face shows metes and bounds
prepared by a professional land surveyor as required by the
act of May 23, 1945 (P.L. 913, No. 367), known as the
“Professional Engineers Registration Law. . . .”
21 P.S. § 10.1(a) (emphasis added).
The court held that the first conveyance after the merger of Lots A and
B in Tax Parcel 4-18-28 was the 1999 sale from the Pezzolas to Stock, but
that the deed for that conveyance “did not include either a metes and
bounds description based on a precise survey of Lots A and B, or a lot
number and reference to a recorded subdivision plan” in accordance with
Section 10(a). Trial Ct. Op., 4/22/13, at 14.15 Therefore, the trial court
held, “any reference to ‘Parcel Number 4-18-28,’ including the reference
contained in the Commitment, did not include Lot B, and . . . Lot A and Lot B
were never actually conveyed together until the Deed of Confirmation from
the Pezzolas to Stock was recorded [in 2008]. . . .” Id.16 Because the deed
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15
The deed refers to Lot No. 4 “on said Plan,” but neither party has
contended that this reference satisfies Section 10(a)(2), and the trial court
therefore did not address that issue. As discussed in footnote 5, supra, the
parties have not identified what “said Plan” is or shown whether it is in the
record.
16
In response to this holding, Stock argues that the subdivision plan filed
when the Borough transferred Lot B to the Pezzolas in 1994 merged Lot B
into County Parcel 4-18-28 and satisfied the requirements of the UPIL. See
Appellant’s Brief at 16-17, Ex. C. However, this subdivision plan merely
showed that Lot B had been severed from the rest of Parcel Number 4-18-
29. See id. Moreover, the 1999 deed, which contains a property description
and lot and parcel number references identical to what is in a 1991 deed
(Footnote Continued Next Page)
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did not convey title to Lot B, and because the description of the property in
the Title Policy and Commitment is identical to that in the deed, the trial
court concluded that the Policy and Commitment did not cover Lot B. See
id.
We do not disagree with the trial court’s analysis — so far as it goes.
The analysis makes plain that the deed from the Pezzolas to Stock did not
convey Lot B, even though it referred to a tax parcel number that included
both Lots A and B. Indeed, no party to this case argues otherwise; everyone
agrees that the deed conveyed only Lot A. Because the description of the
property in the Title Commitment and Title Policy was identical to that in the
deed, it therefore stands to reason that this description also describes only
Lot A.
But rejection of Stock’s argument regarding the import of “Parcel
Number 4-18-28” in the description of the property does not, as the trial
court appears to have concluded, completely resolve the question of
coverage under the Policy. We have long held that descriptions of property
in an insurance policy must be construed with reference to the insured’s
reasonable expectations regarding the coverage being purchased.
_______________________
(Footnote Continued)
(that is, a deed dating prior to the 1994 Lot B transaction), does not clearly
refer to the 1994 subdivision plan, as required by the UPIL. See 21 P.S. §
10.1(a)(2).
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Thus, for example, in Presson v. Commonwealth Mut. Fire Ins.
Co., 77 A.2d 353 (Pa. 1951), a policy insured property “occupied as a Club
situated E/S of U.S. Highway #61 on Part of U.S. Private Survey No. 1062
Twp. 24 Range 14, New Madrid County one mile South of Sikeston, Missouri,
State of Missouri,” but the property intended to be insured “was located not
on Survey No. 1062 but on Survey No. 1032.” 77 A.2d at 354. Our Supreme
Court held that the insurance company was obligated to pay when property
at the intended location was destroyed by fire. It explained: “The pertinent
legal criterion is whether there is sufficient description, exclusive of the
erroneous reference, to identify the building containing the property
intended to be insured. If there is, then the error is an immaterial variance
with no effect whatsoever upon the validity of the policy.” Id. In reaching
this result, the Court looked to precedents from New York:
The applicable rule was well exemplified in Curnen v. Law
Union & Rock Insurance Co., Limited, 159 App. Div. 493,
144 N.Y.S. 499, 500, where the insurance policy covered
furniture and personal effects “contained in or on the building
. . . situate northeast cor. of 2nd street, and Wolf's lane . . .”,
whereas the building was actually located on the northwest
corner. The court there said, — “Such an inaccuracy raises a
question of construction: Can the part plainly erroneous be
rejected, and yet leave enough to designate the location with
certainty? This rule of construction has frequently been resorted
to in aid of clerical misdescriptions of the site of insured
buildings or of buildings containing the property to be insured.
The rule of rejecting such errors, where sufficient remains to
show the place intended, has been applied where the building
containing the subject-matter has been described by an
inaccurate street number (Westfield Cigar Co. v. Reliance
Insurance Cos., 165 Mass. 541, 43 N.E. 504); where a
warehouse containing the insured goods was described from the
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street number in the rear, instead of on the street where it
fronted (Edwards v. Fireman's Insurance Co., 43 Misc. 354,
87 N.Y.S. 507); and where furniture insured was inadvertently
written as on the southerly, instead of the northerly, side of a
country road (Le Gendre v. Scottish Union & Nat. Ins. Co.,
95 App. Div. 562, 88 N.Y.S. 1012). Also, as here, where a street
corner was denoted by a wrong compass direction. Burr v.
Broadway Insurance Co., 16 N.Y. 267. This last case raised a
further difficulty, as the insured did own two buildings quite
similar on the northwest and at the southwest corners of the
crossing streets. Yet by eliminating from the policy ‘No. west,’
enough was left to make certain the building to which the
contract related.”
Id. at 355.
Similarly, and closer to the facts at issue here, in Litto v. Public Fire
Ins. Co., 167 A. 603 (Pa. Super. 1933), Litto purchased a fire insurance
policy covering property in a two-story house at 324 W. 17th Street in Erie.
It turned out that there were two houses at that address; the one in the
front had two stories, while the one in the rear had only one and one-half
stories. Litto’s house was the one in the rear, and the trial court therefore
entered judgment for the insurer because the policy covered a two-story
house. On appeal, we reversed, stating:
An insurance policy does not require a technical description as is
ordinarily employed in the conveyance of real estate. Thus it was
held that, “where through an error of a broker, a building, the
contents of which were insured, is described as located at a
certain corner, when it is on another corner, and there is no
other building on any of the four corners, the insurance is not
avoided, the theory being that the rule of rejection of the
erroneous part of the description in case of inaccuracies applies
if there is enough to leave to identify the property.” It is
suggested that that same rule applies here as the words “two
stories” do not invariably have the same meaning. Any building
having two floors in it may be called a two-story building, and
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the designation of the upper story as "a half story" is a
description of that kind of a story which, notwithstanding, is still
a story.
We then have these facts that the household furniture was in a
house occupied by the insured, that it was at 324 West 17th
Street, and that in one sense of the word the furniture was in a
two-story building and that this answered the description in the
policy.
167 A. at 603-04; see also Shanahan v. Agricultural Ins. Co., 6 Pa.
Super. 65, 70 (1897) (where insured applied for fire insurance on two
stables, but the insurance agent mistakenly wrote “building” instead of
“buildings” in the policy, insurer could not deny coverage on ground that
building that burned down was not the one that was insured).
Our cases in this area deal mostly with fire and casualty policies, but
we are aware of no ground upon which the result should differ if, as here,
the policy insures title. “Generally speaking, a title insurance policy is
subject to the same rules of construction that govern other insurance
policies.” Rood v. Commonwealth Land Title Ins. Co., 936 A.2d 488, 491
(Pa. Super. 2007), appeal denied, 960 A.2d 841 (Pa. 2008).
The results in these cases have been justified on various grounds. The
preceding examples construe the policies to effectuate the intent of the
parties without regard to technical language that may obstruct that intent.
At other times, we have based a similar result on principles of estoppel,
noting that insurance companies write policies based on information from
their agents and are estopped from relying on the agents’ mistakes as a
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means of denying insureds coverage that conforms to their reasonable
expectations. As we stated in Litto:
[A]n insurance company is estopped to set up the fact that the
location of the property covered by an insurance policy was not
properly stated where it appears that the error was due entirely
to the mistake of the agent. Where the agreement in a policy is
to insure certain property of a party such as the house in which
he and his family reside, a barn on his farm, or a warehouse for
the storage of produce, or as the case may be, personal
property, the court will look to the real contract of the parties
which was to insure the property of the policy holder.
167 A. at 604. We stated our holding in Litto regarding estoppel as an
alternative to construing the description of the property in the policy to
cover the house that caught fire. See id.17
Our courts have followed similar reasoning in later cases. For
example, in Tonokovic v. State Farm Mut. Auto. Ins. Co., 521 A.2d 920,
925 (Pa. 1987), our Supreme Court applied equitable estoppel principles to
uphold an insured’s reasonable expectations regarding the purchase of
____________________________________________
17
We concluded our opinion in Litto as follows:
In the present case, the mistake of the agent, who was acting
for the company and who countersigned the policy, was, in law,
that of the company, and it does not lie in its mouth to claim
that it has escaped liability by reason of the error of its agent.
No person or company should profit by his or its own mistake,
and if the location of personal property is misdescribed by
insurer’s agent when, as in this case, the proper information has
been given to him, the insured, without asking for reformation of
the policy, may, in an action, recover for his loss, if he can
convince the jury that such is the case.
167 A. at 604.
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disability insurance. Tonokovic applied for such insurance so that he would
be able to make mortgage payments if he was injured, regardless of his
eligibility for workers’ compensation benefits. He was later injured while
working, and received workers’ compensation benefits. His insurance claim
was denied based on a provision in the policy that excluded coverage for
injuries for which workers’ compensation benefits were available. Tonokovic
sued on the policy and obtained a jury verdict in his favor, which the
Supreme Court ultimately upheld. The Court explained that “where one
applies for a specific type of coverage and the insurer unilaterally limits that
coverage, resulting in a policy quite different from what the insured
requested,” the insured should not be deprived of his reasonable
expectations without notice:
Courts should be concerned with assuring that the insurance
purchasing public’s reasonable expectations are fulfilled. Thus,
regardless of the ambiguity, or lack thereof, inherent in a given
set of insurance documents (whether they be applications,
conditional receipts, riders, policies, or whatever), the public has
a right to expect that they will receive something of comparable
value in return for the premium paid. . . .
Courts must examine the dynamics of the insurance transaction
to ascertain what are the reasonable expectations of the
consumer.
Id. at 925-26 (quoting Collister v. Nationwide Life Ins. Co., 388 A.2d
1346, 1353-54 (Pa. 1978), cert denied, 439 U.S. 1089 (1979)).
Similarly, this Court looked to an insured’s reasonable expectations in
Pressley v. Travelers Prop. Cas. Corp., 817 A.2d 1131 (Pa. Super. 2003).
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Pressley asked her insurance agent to add her mother, Brown, to her
Travelers automobile insurance policy, and to provide Brown with the same
coverage Presley had. Despite his promise to do so, the agent never added
Brown to the policy. When Brown subsequently died in a car accident,
Travelers denied coverage, arguing that the express language of the policy
limited coverage to family members who lived with Pressley. (Brown did
not.) After a non-jury trial, the trial court entered judgment in favor of
Pressley, and we affirmed. Relying on Tonokovic, we reasoned that Pressley
had a reasonable expectation that Brown would be covered, based on her
request for coverage and the agent’s failure to inform her that she did not
receive what she had requested. Pressley, 817 A.2d at 1141.
Here, Stock contends that, “even if the Policy could be read to be
limited to the metes and bounds description, [Land Title] is estopped from
denying coverage” because the erroneous description in the Policy resulted
from Land Title’s failure to conduct a proper title search and to provide a
policy covering all of 4 Mill Street and the entire premises covered by her
Agreement of Sale. Appellant’s Brief at 21. There is no evidence in the
record to suggest that the alleged error in the Policy’s coverage was caused
by Stock herself, and we note that Land Title’s brief does not refute or in any
way address Stock’s argument on this issue. The trial court did not address
this argument in either of its opinions.
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We therefore conclude that even though the trial court was correct
that Stock was not entitled to summary judgment on Count I, the court
erred in entering summary judgment on that count in favor of Land Title. At
the least, there remain material issues of fact relating to Stock’s estoppel
argument that must be considered on a remand. In that remand, the trial
court also may consider any other issues regarding coverage and Count I
that have not yet been resolved.18
Count II (Questions 8 to 10)
Stock argues that the trial court erred in granting summary judgment
in favor of Land Title with regard to her claim of bad faith. She contends that
she was entitled to summary judgment on this claim.
The Pennsylvania bad faith statute provides:
In an action arising under an insurance policy, if the court finds
that the insurer has acted in bad faith toward the insured, the
court may take all of the following actions:
(1) Award interest on the amount of the claim from the date the
claim was made by the insured in an amount equal to the prime
rate of interest plus 3%.
(2) Award punitive damages against the insurer.
(3) Assess court costs and attorney fees against the insurer.
42 Pa.C.S. § 8371. While the statute does not define bad faith, this Court
has explained that bad faith “encompasses a wide variety of objectionable
____________________________________________
18
These include any defenses Land Title may continue to assert under
exclusions in the Policy. The trial court did not address those issues, and we
decline to do so in the first instance.
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conduct,” Condio v. Erie Ins. Exch., 899 A.2d 1136, 1142 (Pa. Super.),
appeal denied, 912 A.2d 838 (Pa. 2006), and that —
For example, bad faith exists where the insurer did not have a
reasonable basis for denying benefits under the policy and that
the insurer knew of or recklessly disregarded its lack of
reasonable basis in denying the claim. Bad faith conduct also
includes lack of good faith investigation into facts, and failure to
communicate with the claimant.
Id. (citations and quotation marks omitted).
In granting summary judgment in favor of Land Title, the trial court
reasoned that Land Title “clearly had a reasonable basis for denying Stock
benefits, because . . . [Land Title] had no duty to defend Stock for title
discrepancies related to Lot B.” Trial Ct. Op. 5/26/16, at 13. As we have
determined, however, there remain material issues of fact with regard to the
coverage issue.19 Therefore, the trial court’s reasoning does not adequately
dispose of Stock’s bad faith claim. In addition, and more fundamentally, we
have observed that bad faith claims “are distinct from the underlying
contractual insurance claims . . . . Rather, § 8371 provides an independent
cause of action to an insured that is not [dependent] upon success on the
merits, or trial at all, of the contract claim.” Nealy v. State Farm Mut.
Auto. Ins. Co., 695 A.2d 790, 792-93 (Pa. Super. 1997), appeal denied,
717 A.2d 1028 (Pa. 1998). The trial court’s reasoning about the scope of
____________________________________________
19
Because material issues of disputed fact remain, the trial court did not err
in denying Stock’s motion for summary judgment on Count II.
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coverage under the Policy therefore is not necessarily determinative on the
bad faith issue.
Moreover, the trial court misperceived the scope of Stock’s bad faith
claim. Stock did not limit her claim to Land Title’s denial of coverage and
refusal to provide Policy benefits, but also complained regarding “the claims
handling conduct which occurred over a six month period before finally
advising Stock that [Land Title] was denying coverage.” Appellant’s Brief at
30; see also Second Am. Third-Party Compl. ¶¶ 44-47. Stock also alleges
that Land Title violated the bad faith statute by advancing “the defenses that
Stock failed to cooperate with [Land Title] as required by the Policy and/or
that it was the actions/inactions of Stock and/or her counsel which were the
proximate cause of Stock’s losses.” Appellant’s Brief at 37; see also Stock’s
Motion for Summ. J. at ¶¶ 63-64. The trial court did not address these
aspects of Stock’s bad faith claim, and these issues remain for resolution on
remand.
We also remand for the trial court to consider Stock’s claim that Land
Title breached its duty to defend Stock under the Title Policy when Stock was
sued by Michael.20 The Supreme Court has explained that the duty to defend
is distinct from the duty to provide coverage:
____________________________________________
20
We note that Stock appears to argue about Land Title’s duty to defend
both in connection with her bad faith claim and also as a freestanding claim
(Footnote Continued Next Page)
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An insurer’s duty to defend is broader than its duty to indemnify.
It is a distinct obligation, separate and apart from the insurer’s
duty to provide coverage. An insurer is obligated to defend its
insured if the factual allegations of the complaint on its face
encompass an injury that is actually or potentially within the
scope of the policy. As long as the complaint “might or might
not” fall within the policy's coverage, the insurance company is
obliged to defend. Accordingly, it is the potential, rather than the
certainty, of a claim falling within the insurance policy that
triggers the insurer’s duty to defend.
Am. & Foreign Ins. Co. v. Jerry's Sport Ctr., Inc., 2 A.3d 526, 540-41
(Pa. 2010) (internal citations omitted). The trial court did not separately
analyze Stock’s claim that Land Title breached its duty to defend her under
the Policy, other than to hold that there was no policy coverage because the
Policy did not apply to title issues regarding Lot B. See Trial Ct. Op.,
4/22/13, at 14. Because we have vacated the trial court’s entry of summary
judgment on that Policy issue, the trial court must further examine this
issue.
In sum, we vacate the trial court’s award of summary judgment in
favor of Land Title with respect to Stock’s bad faith claim. We instruct the
trial court, on remand, to consider all aspects of Stock’s claim under the
proper standard.
***
_______________________
(Footnote Continued)
that Land Title’s refusal to defend breached the Title Policy. Both aspects of
this issue should be considered by the trial court on remand.
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Judgment vacated. Case remanded for further proceedings consistent
with this opinion. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 4/11/2017
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