Smith v. Stewart Title

Mem. Dec. 10-71

June 1, 2010

Zack Greenfield and Erica Johanson recently prevailed at the Maine Law Court on a claim that Stewart Title Guaranty Company wrongfully refused to provide a defense to its insureds.  Zack and Erica argued that Stewart Title had no duty to defend the Smiths in a suit brought against them by their neighbor for obstruction of her access easement across their property.  Since the easement was described identically in both the Smiths’ and the neighbor’s deeds, the only issue concerned where on the face of the earth the easement was located.  Zack and Erica contended that under these circumstances, the policy’s Survey Exception, which excepts from coverage "encroachments, overlaps, boundary line disputes, or other matters which would be disclosed by an accurate survey or inspection of the premises,” is applicable.  The Law Court agreed. 

This case represents the first time that the Law Court has found that the language of a title policy’s Survey Exception (referred to in the opinion as Exception 3) is unambiguous and excludes coverage of an underlying boundary line dispute.  The Superior Court’s decision below observed that "the very purpose of a survey exception is to exclude from coverage errors that would be revealed not by a search of public records, but by an accurate survey.”