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N. Fork Land & Cattle, LLLP v. First American Title Insurance Co.

Supreme Court of Wyoming

November 24, 2015

NORTH FORK LAND & CATTLE, LLLP, Appellant (Plaintiff),
v.
FIRST AMERICAN TITLE INSURANCE COMPANY, Appellee (Defendant)

Page 342

Appeal from the District Court of Fremont County. The Honorable Norman E. Young, Judge.

Representing Appellant: M. Gregory Weisz of Pence and MacMillan LLC, Laramie, Wyoming.

Representing Appellee: James R. Salisbury and Anthony M. Reyes of Riske, Salisbury & Reyes, P.C., Cheyenne, Wyoming. Argument by Mr. Salisbury.

Before BURKE, C.J., and HILL, KITE[*], DAVIS, and FOX, JJ.

OPINION

Page 343

KITE, Justice, Ret.

[¶1] North Fork Land & Cattle, LLLP (North Fork) appeals from the district court's order granting summary judgment in favor of First American Title Insurance Company (First American). The district court ruled that North Fork was not an insured under title insurance policies issued by First American to North Fork's predecessors and, therefore, was not entitled to assert claims for damages resulting from an undisclosed encumbrance on the properties.

[¶2] We conclude the district court did not apply the appropriate test to determine the meaning of the insurance contract, and, when the correct rules are applied, North Fork qualifies as an insured successor. Consequently, we reverse and remand.

ISSUES

[¶3] North Fork presents the following issues for review:

I. Whether the district court improperly added language to a title insurance policy requiring that in order for a transfer of real property to qualify as a transfer by " operation of law" that the transfer must have been done only involuntarily, and therefore whether summary judgment was appropriate when the non-moving party provided uncontroverted evidence showing that it is entitled to coverage as a fiduciary/corporate successor to the named insured in the policy.

Page 344

II. Whether the named insured party in a title insurance policy retained an estate and interest in the real property when the named insured was the co-organizer, general partner, limited partner, manager and beneficiary in a limited liability limited partnership that owns the real property and the named insured is entitled to a distribution in kind upon dissolution of the entity.
III. Whether the domestication and name change of a foreign limited liability limited partnership from Colorado to Wyoming and recording of a quitclaim deed done to memorialize the name change of record caused the loss of the warranty of title to the limited liability limited partnership from which it obtained title to the real property.

First American does not offer a separate statement of the issues on appeal.

FACTS

[¶4] Between 1983 and 1999, Ronald and Carol Hansen purchased five separate properties and combined them to form a ranch in Fremont County, Wyoming. The Hansens held title to four of the properties as husband and wife. They obtained title insurance on the properties from First American and were named personally as insureds. Mr. Hansen held title to the other parcel as trustee of his revocable trust, and the First American title insurance policy listed him as an insured in that capacity.

[¶5] In November 2000, Mr. Hansen conveyed the trust property to himself and his wife, and the Hansens then conveyed all of the properties by warranty deed to Hansens' North Fork Ranch, LLLP (HNF), a Colorado limited liability limited partnership. The limited liability limited partnership was created by the Hansens specifically for estate planning purposes, and Mr. Hansen passed away shortly after the conveyances. Wyoming later enacted legislation authorizing limited liability limited partnerships, and, in 2009, HNF converted to a Wyoming limited liability limited partnership and changed its name to North Fork Land & Cattle, LLLP. HNF quitclaimed the properties to North Fork to update the recorded legal title of the properties.

[¶6] In 2008, the district court declared that Bunker Road, which crosses three of North Fork's properties, was established as a county road by Fremont County in 1913. King v. Bd. of County Comm'rs of the County of Fremont, 2010 WY 154, ¶ 9, 244 P.3d 473, 476 (Wyo. 2010). HNF intervened and contested the county road in the King action. This Court affirmed the county road designation in 2010. Id., ¶ 1, 244 P.3d at 474.

[¶7] First American failed to disclose that Bunker Road burdened the properties when the title insurance policies were issued to the Hansens. North Fork submitted notices of claims under the title insurance policies, asserting it was damaged by the Bunker Road encumbrance. First American did not respond to North Fork's claims, and North Fork filed suit against the insurer.

[¶8] First American filed a motion for summary judgment on several bases. The district court granted summary judgment in favor of the insurer, concluding that North Fork did not meet the definition of " insured" under the title insurance policies and the Hansens could not be held liable under the warranty provisions of the policies because HNF transferred the properties to North Fork by quitclaim deeds. North Fork appealed.

STANDARD OF REVIEW

[¶9] Our standard of review for a summary judgment order is de novo. Fayard v. Design Comm. of the Homestead Subdivision, 2010 WY 51, ¶ 9, 230 P.3d 299, 302 (Wyo. 2010); Wyo. Med. Ctr. v. Wyo. Ins. Guarantee Ass'n, 2010 WY 21, ¶ 11, 225 P.3d 1061, 1064 (Wyo. 2010). Summary judgments are governed by W.R.C.P. 56(c):

The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. A summary judgment, interlocutory

Page 345

in character, may be rendered on the issue of liability alone although there is a genuine issue as to the amount of damages.

Reviewing a summary judgment decision,

we have exactly the same duty as the district judge; and, if there is a complete record before us, we have exactly the same material as did [the district judge]. We must follow the same standards. The propriety of granting a motion for summary judgment depends upon the correctness of a court's dual findings that there is no genuine issue as to any material fact and that the prevailing party is entitled to judgment as a matter of law. This court looks at the record from the viewpoint most favorable to the party opposing the motion, giving to him all favorable inferences to be drawn from the facts contained in affidavits, depositions and other proper material appearing in the record.

McGarvey v. Key Pro. Mgmt. LLC, 2009 WY 84, ¶ 10, 211 P.3d 503, 506 (Wyo. 2009), quoting Nowotny v. L & B Contract Indus., 933 P.2d 452, 455 (Wyo. 1997).

[¶10] Interpretation of the contractual language is a matter of law for the court, provided the language is clear and unambiguous. Cheek v. Jackson Wax Museum, Inc., 2009 WY 151, ¶ 12, 220 P.3d 1288, 1290 (Wyo. 2009); Vargas Ltd. Partnership v. Four " H" Ranches Architectural Control Comm., 2009 WY 26, ¶ 11, 202 P.3d 1045, 1050 (Wyo. 2009). If the language is not clear or there are other material ...


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