Ventana Partners, LLC v. LaNoue Development, LLC

Whether an underlying claim has been settled before a party tenders their defense to a title insurer is a genuine issue of material fact.

Plaintiff appealed the trial court granting Defendants’ motion for summary judgement, and judgement of dismissal. Plaintiff purchased real property from Defendant, LaNoue Development, LLC (LaNoue), to develop and sell condominiums. The Oregon Real Estate Agency (OREA) and Multnomah County surveyor withheld approval of Plaintiff’s certificate of condominium, and as a result Plaintiffs’ development failed. Plaintiff settled their claim against LaNoue, and LaNoue assigned their claims to Plaintiffs. Defendants are title companies, surveyors, and attorneys involved in the sale of Lot 1. After the sale, Montara Owners Association (MOA) challenged LaNoue’s transfer of Lot 1 and modification of the declaration of protective covenants, arguing that MOA’s interest in common property on Lot 1 requires all homeowners with a deeded interest to consent. OREA declined to approve the declaration of condominiums with MOA’s claims pending. Because Chicago Title, Defendant, had not responded to Plaintiff’s tender of defense, Chicago Title negotiated a settlement with MOA, and promised to insure title for condominium purchasers. However, by that point Plaintiff had defaulted on borrowing obligations and the development of Lot 1 failed. Plaintiff claims that the title to Lot 1 was defective and unmarketable because MOA did not properly transfer deeded interest in common areas of Lot 1. Plaintiff also claims that Chicago Title breached their duty-to-defend. The Court of Appeals affirmed the trial court decision to grant Defendants’ motion for summary judgement on Plaintiff’s claims of defective and marketable title, and reversed in part holding that whether MOA settled their claims against Plaintiff before Plaintiff tendered their defense to Chicago Title is a genuine issue of material fact. Reversed and remanded on duty-to-defend claim against Chicago Title; otherwise affirmed.