380 Kings Highway, LLC v Fidelity Natl. Tit. Ins. Co., (2011 NY Slip Op 52223[U] [Sup Ct., Kings Cty, 2011])

In this case, we represented the Plaintiff purchaser of real estate against the Defendant title insurance company who insured our client's title at the closing.

Prior to the closing, the NYC Department of Housing Preservation and Development had performed emergency demolition work at the property. At closing, the title abstract search revealed that work had been done, but showed a balance of "$0.00".

After the closing, as per NYC administrative code, a charge for the work of approximately $117,000.00 appeared on our client's property tax bill and became a lien against the real estate.

Our client made a claim under the title policy which was rejected by the insurance company based upon a standard exclusion contained in the insurance policy.

We began a lawsuit for a declaration that the emergency repair lien was covered by the policy and that the insurance company should pay for it.

After serving its answer, the Defendant made a motion to dismiss the complaint based upon the exclusion.

In response, we made a cross-motion for summary judgment also based on the policy, plus the New York Standard Endorsement which the Defendant neglected to include in its motion or in the policy at the closing but which the Court found was incorporated by reference.

The Supreme Court, Kings County denied the Plaintiff's motion, granted our cross-motion, finding that the insurance policy covered the emergency repair lien and that our client was entitled to judgment for the full amount of the lien plus interest from the day our client made its claim.

You can read the decision here.

Update: New York title insurance policies issued beginning July, 2012 will no longer cover emergency repair liens. TIRSA, the Title Insurance Rating Service Association has amended the New York Standard Endorsement to cover only mechanic's liens. Title Insurance policies issued prior to July, 2012 are unaffected.