February 24th, 2020

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Early Sullivan’s Coverage Determination At Heart of Old Republic’s Summary Judgment Victory

Early Sullivan client Old Republic National Title Insurance Company (“Old Republic”) retained the Firm to handle coverage on a complex mechanic’s lien dispute involving Old Republic’s insured Hall CA-NV, LLC (“Hall”) and the renovation of the famed Cal-Neva Lodge & Casino that sits on the border of California and Nevada — a property Frank Sinatra once co-owned in the 1960s.

Hall filed suit against Old Republic for breach of contract, breach of the duty to defend, breach of the duty of good faith and fair dealing, and violations of Chapter 541 of the Texas Insurance Code, claiming that coverage was improperly denied, for which Hall sought over $5,000,000 in damages.

At the center of the lawsuit were the coverage opinions prepared by Early Sullivan’s Scott Gizer. The coverage opinions concerned whether Hall had coverage under the insuring provisions of the title policy that insured the lien priority of Hall’s deed of trust, and under certain mechanic’s lien endorsements, as well as whether Hall’s claims were excluded from coverage under Exclusions 3(a), excluding matters created by the Insured, and 3(d), post-policy events. Scott opined that, because all of the work covered by the mechanic’s liens was post-policy work, and arose due to Hall’s internal decision to discontinue funding its construction loan months prior to notifying any of the contractors, there was no coverage for the claim and was excluded from coverage.

After both sides moved for summary judgment on the legal interpretation of the title insurance policy in-question, the U.S. District Court for the Northern District of Texas, found Scott’s and Old Republic’s coverage opinions to be correct, Ordering that Hall take nothing by its claims against Old Republic, and that those claims be dismissed with prejudice.

Click “Download PDF” to read the Final Order.