Christopher T. Meier, Esq.
Lisa S. Wade, Esq.
Steven J. McAuliffe, United States District Judge.
Douglas and Stephanie Desjardins bring this action seeking a judicial declaration that they are entitled to coverage under their homeowners’ title insurance policy. The policy was issued by the predecessor in interest to the defendant, Fidelity National Title Insurance Company (“Fidelity”). The Desjardins also seek damages for Fidelity’s alleged breach of contract. Fidelity denies that the Desjardins’ policy provides coverage under the circumstances presented in this case.
Pending before the court are the parties’ cross-motions for summary judgment. For the reasons stated, plaintiffs’ motion is granted, and defendant’s motion is denied.
Standard of Review
A. Summary Judgment Standard.
When ruling on a motion for summary judgment, the court must “view the entire record in the light most hospitable to the party opposing summary judgment, indulging all reasonable inferences in that party’s favor.” Griggs-Ryan v. Smith, 904 F.2d 112, 115 (1st Cir. 1990). Summary judgment is appropriate when the record reveals “no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). In this context, “a fact is ‘material’ if it potentially affects the outcome of the suit and a dispute over it is ‘genuine’ if the parties’ positions on the issue are supported by conflicting evidence.” Int’l Ass’n of Machinists & Aerospace Workers v. Winship Green Nursing Ctr., 103 F.3d 196, 199-200 (1st Cir. 1996) (citations omitted).
B. Interpretation of Insurance Policies.
Construing the meaning and scope of language used in an insurance policy presents questions of law for the court to resolve. Under New Hampshire’s rules of construction:
Where disputed terms are not defined in a policy or by State judicial precedent, we apply an objective standard, construing the terms in context and as would a reasonable person in the position of the insured, based upon more than a casual reading of the policy as a whole. If the policy language may reasonably be interpreted in more than one way and one interpretation supports coverage, any ambiguity is construed in favor of the insured and against the insurer. Absent ambiguity, however, our search for the parties’ intent is limited to the words of the policy.
Panciocco v. Lawyers Title Ins. Corp., 147 N.H. 610, 613 (2002) (citations omitted).
It bears noting that, at least with respect to the first count in the Desjardins’ complaint (seeking a declaratory judgment that they are entitled to coverage), Fidelity bears the burden of proof under applicable New Hampshire law. See N.H. Rev. Stat. Ann. (“RSA”) 491:22-a (“In any petition under RSA 491:22 to determine the coverage of a liability insurance policy, the burden of proof concerning the coverage shall be upon the insurer whether he institutes the petition or whether the claimant asserting the coverage institutes the petition.”). Moreover, should the Desjardins prevail on that claim, they will be entitled to an award of “court costs and reasonable attorneys’ fees from the insurer.” RSA 491:22-b.
In May of 2008, the Desjardins purchased a home at 15 Grappone Road, in Moultonborough, New Hampshire, also known as Lot 3 (the “Property”). The Property is part of a subdivision near Lake Winnipesaukee and includes an appurtenant easement to use a waterfront lot known as Lot 12 for, among other things, swimming and boating.
At the closing, the Desjardins purchased a title insurance policy from Fidelity’s predecessor in interest. Subject to various conditions, exceptions, and exclusions, the “Policy insures [the Desjardins’] title to the land described in Schedule A.” Exhibit 1 to Plaintiffs’ Reply Memorandum (document no. 18-2) (the “Policy”), “Owner’s Coverage Statement.” The Policy defines the insured “land” to include both the lot on which the Desjardins’ home is located (Lot 3), as well as their easement over Lot 12, which is described as follows:
[T]he right to use, in common with Grappone, Inc., its successors and assigns, Lot #12 as shown on [Plan #27059, recorded in the Carroll County Registry of Deeds at Book 27, Page 59] for purposes of bathing, boating and all such other purposes as may be permitted by the said Grappone, Inc.
The Policy, Schedule A, Exhibit A. According to plaintiffs, the plan referenced in both their deed and the Policy shows Lot 12 with 200 feet of shore frontage on Lake Winnipesaukee. Plaintiffs’ memorandum (document no. 14-1) at 2.
In April of 2010, the owner of property adjacent to Lot 12 brought a quiet title action in the New Hampshire Superior Court, claiming title to approximately 35 feet of Lot 12’s shoreline frontage (the “Cooper Litigation”). In that state proceeding, Ms. Cooper asserts that she holds title to the disputed shoreline property by virtue of: (a) adverse possession; and (b) the placement of an iron pin survey marker. If she were to prevail, Lot 12 would obviously have less shoreline and beachfront than is shown on the plan referenced in both the Desjardins’ deed and their title insurance policy. So, rather than enjoying an easement affording them access to some 200 feet of waterfront and beach area, the Desjardins would have a right to use only 165 feet of waterfront and beach area on Lot 12.
Upon learning of the Cooper Litigation, the Desjardins made demand upon Fidelity, asserting that they were entitled to coverage under the Policy. While the Desjardins do not assert that the Policy provides coverage for Ms. Cooper’s adverse possession claim, they do say it provides coverage for her claim to a portion of Lot 12 by virtue of the placement of a boundary monument. See Plaintiffs’ Reply Memorandum (document no. 18) at 3. Fidelity denied the Desjardins’ claim, concluding that the Policy provides coverage for neither Ms. Cooper’s adverse possession claim, nor her survey claim. This litigation ensued.
Invoking the provisions of Chapter 491, New Hampshire Revised Statutes Annotated, the Desjardins seek a declaration that Fidelity owes them coverage under the Policy, in particular, an obligation to intervene in the Cooper Litigation and defend their title interests (count one). They also assert that Fidelity is liable to them for breach of contract (count two). As noted above, the parties have filed ...