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Scott E. Gizer, Christopher I. Ritter and Jessica Detering of Early Sullivan prevailed on a motion for summary judgment on behalf of First American Title Insurance Company in a bad faith action in U.S. District Court in Washington State. The Insured was a developer that became embroiled in litigation with an adjacent property owner who claimed the right to maintain utility lines under the Insured’s property based on an implied easement theory. After settling that dispute, the Insured tendered a claim to First American for indemnification of the attorney’s fees and costs the Insured incurred as well as other losses.

First American denied coverage on various grounds resulting in the Insured filing a lawsuit against First American for breach of contract and bad faith, seeking $14.7 million in compensatory damages. On a matter of first impression in the State of Washington, Early Sullivan filed a motion for summary judgment arguing that the claim for an implied easement was properly denied because it was excluded from coverage under Exclusion 3(d), which excludes matters that are created or attach after the Date of Policy.

Early Sullivan argued that implied easements are not created and do not attach to property until a Court renders a judgment establishing the implied easement. Further, because the adjacent property owner had not established its implied easement through a Court judgment as of the Date of Policy, Exclusion 3(d) applied. The District Court agreed with Early Sullivan’s argument and entered summary judgment in First American’s favor while also denying the Insured’s cross-motion for summary judgment seeking an order that the claim was a covered matter. The case information is Bel-Red Partners, LLC v. First American Title Insurance Company, U.S. District Court, Western District of Washington (Seattle), Case No. 2:24-cv-01563-KKE.