No. 25327-9-III.The Court of Appeals of Washington, Division Three.
June 26, 2007.
Appeal from a judgment of the Superior Court for Stevens County, No. 06-2-00118-2, Rebecca M. Baker, J., entered June 16, 2006.
Affirmed by unpublished opinion per Sweeney, C.J., concurred in by Schultheis and Kulik, JJ.
SWEENEY, C.J.
An insurance company, including a title insurance company, is obligated to defend its insured when a claim arguably falls within the coverage provisions of its policy. Landowners who owned a title insurance policy were sued. A neighbor sued the landowners to “reform” an easement that did not burden the landowners’ property. If relief was granted, the easement would have then burdened the landowners’ property.
The title company insured the landowners’ title and it refused to defend the lawsuit. The landowners sued the title company. We conclude that the lawsuit clearly did not fall within the coverage of the title policy. The potential encumbrance was not of public record within the meaning of the policy. And we therefore affirm the trial judge’s summary dismissal of the suit against the title company for denying coverage.
FACTS
Dale Campbell and Tina Fereira (Campbell-Fereira) own property on Deer Lake, Washington. They bought title insurance from Ticor Title Insurance Company.
Ticor insured against: (1) title to the estate or interest being vested in a manner other than stated; (2) any defect, lien, or encumbrance on the title; (3) unmarketability of title; and (4) lack of right of access to and from land. Ticor also agreed to pay attorney fees and costs incurred in defense of the title.
Ticor, however, excluded coverage for loss or damage for easements not disclosed by public records. It also excluded coverage for encroachments and questions of location, boundary, and area disclosed by a survey.
Jerry Edwards owns the property adjacent to the Campbell-Fereira lot. Mr. Edwards claimed a right to cross over the Campbell-Fereira property to access Deer Lake based on a “Declaration of Pedestrian Easement” recorded on December 5, 1996. The “Declaration of Pedestrian Easement” described an easement to access a dock on Deer Lake on “Lot B.” Lot B is owned by the Gromo Family Trust (Gromo). The Gromo house lies immediately to the south of the Campbell-Fereira property. Mr. Edwards sued Campbell-Fereira to enforce the claim.
Mr. Edwards alleged that the original grantors of the Edwards property (Lot C), the Gromos property (Lot B), and the Campbell-Fereira property (Lot A) intended a pedestrian easement between the Campbell-Fereira house and the house immediately to the south, the Gromo house.
The Gromos claimed that Mr. Edwards has no pedestrian easement since it is blocked by their home. The fact that the pedestrian easement ran through the Gromos’ house was discovered after a survey in 2002. Mr. Edwards prayed that the Gromos and Campbell-Fereira deeds be reformed “to reflect the true intention of the Vickerys as the original grantor” to provide him with a pedestrian easement. Clerk’s Papers (CP) at 17. Mr. Edwards wants access over property that now belongs to Campbell-Fereira and the Gromos.
Campbell-Fereira tendered defense of the suit to Ticor. Ticor denied coverage and refused to defend. Ticor relied on its policy’s exclusion for “easements, prescriptive rights, rights of way, streets, roads, alleys or highways not disclosed by the public record.” CP at 65-66. And it responded that “[i]t is uncontroverted that on the date that Ticor’s title policy was issued to Ms. Fereira and Mr. Campbell, there was no easement of record across their property in favor of Lot C [the Edwards property].” CP at 66. Ticor also refused coverage because the policy excluded defects, liens, encumbrances, adverse claims, or other matters “attaching or created subsequent to the date of the policy.” CP at 66.
Campbell-Fereira sued Ticor and alleged that Ticor had wrongfully denied coverage, breached its duty of good faith, and violated Washington’s Consumer Protection Act. Everyone moved for summary judgment, and the trial court dismissed Campbell-Fereira’s complaint.
DISCUSSION
Duty to Defend
Campbell-Fereira argues that Ticor reads its policy too narrowly and too restrictively to deny its duty to defend. They note that the easement here was disclosed by public record. The only dispute was the legal effect of the easement and, specifically, whether it affected the Campbell-Fereira lot.
Ticor responds that on the date it issued the policy there was no recorded easement benefiting the Edwards property or burdening the Campbell-Fereira land. It notes that the Edwards complaint asked the court for reformation of the easement to burden the Campbell-Fereira land. Ticor then concludes that under the clear language of the policy it had no duty to defend.
We review the trial court’s grant of summary judgment de novo. Overton v. Consol. Ins. Co., 145 Wn.2d 417, 429, 38 P.3d 322 (2002). A motion for summary judgment will be granted only when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. CR 56(c); Overton, 145 Wn.2d at 429. Here, the facts are undisputed. And the only question turns on the legal consequences which attend those facts — was there a duty to defend.
And interpretation of an insurance policy is a question of law. Id. at 424; Pub. Util. Dist. No. 1 v. Int’l Ins. Co., 124 Wn.2d 789, 797, 881 P.2d 1020 (1994). We construe the policy as a whole and give effect to each provision. Overton, 145 Wn.2d at 424. The terms of the insurance policy should be given a “`fair, reasonable, and sensible construction as would be given to the contract by the average person purchasing insurance.'” Id. (quoting Sears v. Grange Ins. Ass’n, 111 Wn.2d 636, 638, 762 P.2d 1141 (1988)). We are also bound by definitions provided in the specific policy. Overton, 145 Wn.2d at 427; Kitsap County v. Allstate Ins. Co., 136 Wn.2d 567, 576, 964 P.2d 1173 (1998).
The duty to defend arises when a lawsuit is filed against the insured alleging facts and circumstances which fall within the coverage of the policy. Kirk v. Mt. Airy Ins. Co., 134 Wn.2d 558, 561, 951 P.2d 1124
(1998). But an insurer has no duty to defend claims that are not covered by the policy. Id.
Ticor relies on the exceptions to coverage set out in its policy:
This policy does not insure against loss or damage (and the Company will not pay costs, attorneys’ fees or expenses) which arise by reason of GENERAL EXCEPTIONS:
. . . .
C. Easements, prescriptive rights, rights-of-way, streets, roads, alleys or highways not disclosed by the public records.
CP at 59.
The easement at issue here was not disclosed by public record. There was no recorded easement benefiting Mr. Edwards’ property and burdening Campbell-Fereira’s land on the date Ticor issued this policy. Indeed, Mr. Edwards’ complaint asks the court to reform the easement so it will burden the Campbell-Fereira property in the future.
Under the policy’s express terms, the “policy does not insure against loss or damage . . . which arise[s] by . . . [e]asements . . . not disclosed by the public records.” CP at 59. Public records are “records established under state statutes at Date of Policy for the purpose of imparting constructive notice of matters relating to real property to purchasers for value and without knowledge.” CP at 55.
Moreover, any question about whether the easement burdened the property first arose after a survey was conducted in 2002. This was a year after the title insurance became effective. And, there is no duty to defend against “[e]ncroachments and questions of location, boundary and area disclosed only by inspection of the premises or by survey.” CP at 59.
We conclude that under the clear terms of this policy Ticor had no duty to defend. Attorney Fees
Ticor argues that the Campbell-Fereira appeal was frivolous and it is therefore entitled to attorney fees. And we can award fees and costs for a frivolous appeal. RAP 18.9(a); Pain Diagnostics Rehab. Assocs., P.S. v. Brockman, 97 Wn. App. 691, 701, 988 P.2d 972 (1999), review granted case dismissed, 140 Wn.2d 1013 (2000). An appeal is frivolous when there are no debatable issues over which reasonable minds could differ, and there is so little merit that the chance of reversal is slim. Brockman, 97 Wn. App. at 701; Goad v. Hambridge, 85 Wn. App. 98, 105, 931 P.2d 200 (1997).
An appeal that raises clearly debatable issues is not frivolous for purposes of imposing sanctions under RAP 18.9(a). Biggs v. Vail, 119 Wn.2d 129, 138, 830 P.2d 350 (1992). Whether this title insurance company had the duty to provide coverage and defend this insured in a lawsuit to reform an easement or covenant on real property is not frivolous. RAP 18.9(a); Dickins v. Stiles, 81 Wn. App. 670, 672-78, 916 P.2d 435 (1996).
We affirm the trial judge’s summary dismissal of the complaint and we deny Ticor’s request for fees.
A majority of the panel has determined that this opinion will not be printed in the Washington Appellate Reports but it will be filed for public record pursuant to RCW 2.06.040.
WE CONCUR:
Schultheis, J., Kulik, J.