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Fidelity National Insurance Co. v. Sandpoint Title Insurance Incorporated

United States District Court, Ninth Circuit

June 7, 2013

FIDELITY NATIONAL INSURANCE COMPANY, a California corporation, as successor by merger to Lawyers Title Insurance Corporation and as successor by merger to Transnation Title Insurance Company, Plaintiff,
v.
SANDPOINT TITLE INSURANCE INCORPORATED, an Idaho corporation, Defendant.

MEMORANDUM DECISION AND ORDER

EDWARD J. LODGE, District Judge.

INTRODUCTION

Plaintiff, Fidelity National Title Insurance Company ("Fidelity"), brings these actions against Sandpoint Title Insurance Incorporated ("Sandpoint"), alleging four causes of action in connection with a title Agency Agreement ("the Agency Agreement"). On February 13, 2013, Sandpoint filed a Motion to Dismiss, pursuant to the Fed.R.Civ.P. 12(b)(1), 12(b)(6), and 12(b)(7). (Dkt. 6). The Motion to Dismiss is now ripe. Having fully reviewed the record, in the interest of avoiding further delay, and because the Court conclusively finds that the decisional process would not be significantly aided by oral argument, this matter shall be decided on the record before this court without a hearing.

FACTUAL BACKGROUND

Fidelity is a California corporation licensed to transact business in the state of Idaho. Sandpoint is a corporation formed under the laws of the state of Idaho, licensed to do business in Idaho, and doing business in the state of Idaho. On March 1, 1998, Fidelity, as Principal, executed the Agency Agreement for the purpose of authorizing Sandpoint to "issue and countersign title insurance policies, binders, commitments to insure and endorsements" in Bonner County, Idaho. (Compl. ¶ 4.2). Pursuant to the Agency Agreement, Sandpoint was required to comply with all Fidelity requirements, directives, guidelines, rules and regulations regarding search and examination of title and the clearance of objections or exceptions to title prior to binding Fidelity under any policy.

In 2002, Sandpoint issued a title insurance policy, purportedly under the Agency Agreement, to Randy Stuart and Ann Stuart, purchasers of the Priest River Property in Bonner County, Idaho. At the time the Stuarts purchased the Priest River Property in 2002, a well use easement was attached. Sandpoint did not identify or disclose the well use easement in the title insurance exceptions despite being on record to the Priest River Property. The Stuarts discovered the well use easement and made a claim against the title insurance policy in 2009. Fidelity paid six thousand five hundred dollars ($6, 500), the reasonable fair market appraisal of the loss of value of the Priest River Property, to the Stuarts to resolve their claim against the title insurance policy.

In 1982, Brent and Laura Baker acquired title to a 160-acre parcel of real property in Bonner County, Idaho ("Southwest Quarter"). When the Bakers acquired the Southwest Quarter, the property included an easement across Crosswhite Road entering from the north to provide access to the Southwest Quarter. In 1992, the Bakers conveyed a 20-acre parcel in the northwest portion of the Southwest Quarter to Frank and Donna Cook (the "Cook Parcel"). Further, the Bakers conveyed an easement and a Road Maintenance Agreement to provide Cook access to the Cook Parcel. In 1993, the Bakers conveyed another portion of the Southwest Quarter to Yvonne Scoggins ("Ogram Parcel"). Even though the conveyance of the Ogram Parcel refers to the Road Maintenance Agreement and easement granted to Cook, no easement was reserved for Scoggins' use. In 2001, Scoggins conveyed the Ogram Parcel to Stanley and Dessiree Jagiello. In 2009, Jagiello conveyed the Ogram Parcel to Craig Ogram and Suzanne Ogram.

In 2005, the Bakers conveyed the southern half of the Southwest Quarter to the Brent and Laura Baker Family Limited Partnership ("Baker LP") ("Baker LP Parcel"). A roadway from Crosswhite Road traveling south through the Ogram Parcel ending in the Baker LP Parcel existed at the time Jagiello conveyed the Ogram Parcel to Ogram. Sandpoint issued a title insurance policy, purportedly acting under the Agency Agreement, to Baker LP. Nothing in the Ogram Parcel history grants an easement across the Ogram Parcel to provide access to the Baker LP Parcel.

Ogram denied Baker LP use of the roadway to access the Baker LP Parcel. Baker LP filed a lawsuit in January 2011 against Ogram in the Idaho District Court for Bonner County, asserting claims to establish easement on the roadway across the Ogram Parcel. The Idaho District Court for Bonner County denied Baker LP's claims asserted in the lawsuit.

Baker LP next made a claim against the Fidelity title insurance policy issued by Sandpoint, and filed a lawsuit against Fidelity in Idaho District Court for Bonner County. Fidelity paid sixty thousand dollars ($60, 000) to resolve the claim brought under the title insurance policy by Baker LP, and incurred an additional eight thousand five hundred seventy dollars and thirteen cents ($8, 570.13) in expenses defending against the Baker LP claims, for a total of sixty eight thousand five hundred seventy dollars and thirteen cents ($68, 570.13).

ANALYSIS

A. 12(b)(1)-Lack of Subject Matter Jurisdiction Due to Amount in Controversy

In this motion, Sandpoint claims that the Complaint should be dismissed under Fed.R.Civ.P. 12(b)(1) for lack of subject matter jurisdiction because the amount in controversy in the Complaint does not exceed $75, 000. 28 U.S.C. § 1332(a). This argument is denied because Fidelity, in the Complaint, alleges it was damaged by, and is entitled to relief in the amount of $75, 070.13.

A Defendant may move to dismiss a complaint for lack of subject matter jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1) in one of two ways. See Thornhill Publ'g Co., Inc. v. General Tel. & Elec. Corp., 594 F.2d 730, 733 (9th Cir. 1979). The attack may be a "facial" one where the defendant attacks the sufficiency of the allegations supporting subject matter jurisdiction. Id. On the other hand, the defendant may launch a "factual" attack, "attacking the existence of subject matter jurisdiction in fact." Id. Here, Sandpoint challenges the claims based on a facial attack. When considering a "facial" attack made pursuant to Rule 12(b)(1), a court must consider ...


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