Florida Appeals Court Orders Insurer to Defend Rescission Claim in Title Dispute

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Langley filed a lawsuit, claiming that he had a valid agreement with the seller and accused the insureds of conspiring with the seller’s representative to undermine his rights and purchase the property. The lawsuit included claims of tortious interference, civil conspiracy, and a request to rescind the insureds’ deed.

Old Republic denied coverage under the title insurance policy, asserting that the tortious interference and conspiracy claims were not covered by the policy. Additionally, it invoked an exclusion (3)(a) in the policy, which bars coverage for losses arising from defects, liens, or claims created or agreed upon by the insureds. The insurer argued that the lawsuit alleged the insureds acted in concert with the seller to interfere with Langley’s contract rights, triggering the exclusion.

In 2021, Fernandez and Palma filed a lawsuit against Old Republic for failing to defend them in the underlying action, asserting that the insurer breached its contractual duty. Although the trial court sided with Old Republic, ruling that it had no duty to defend, the appeals panel disagreed, particularly with respect to the rescission claim. The panel concluded that the allegations in the Langley lawsuit did not include specific facts showing that the insureds engaged in misconduct. The court emphasized that the exclusion could only apply if there were detailed allegations of wrongful conduct.