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GMAC Mortgage, LLC v. First Am. Title Ins. Co. Opinion Summary: This case involved multiple litigations among three parties - Insurer, insured Mortgagee, and Homeowner - arising out of a defect in the title to Homeowner's home. Insurer brought suit in the land court on behalf of Mortgagee seeking to reform the deed to the property or to equitably subrogate Homeowner's interest in the property behind Mortgagee's mortgage. Homeowner initiated suit in the superior court against Mortgagee. Eventually, all claims in both actions became part of a federal court case, which settled. Thereafter, Mortgagee filed a complaint against Insurer in the U.S. district court seeking to recover from Insurer for the costs Mortgagee incurred in defending against Homeowner's claims. The judge determined Insurer had no obligation under its title insurance policy to pay Mortgagee's defense costs but certified two questions to the Massachusetts Supreme Court. The Court answered by holding that, under Massachusetts law (1) a title insurer does not have a duty to defend the insured in the entire lawsuit where one claim is within the scope of the title insurance coverage and other claims are not; and (2) a title insurer that initiates litigation similarly does not have a duty to defend the insured against all reasonably foreseeable counterclaims.
GMAC MORTGAGE, LLC vs. FIRST AMERICAN TITLE INSURANCE COMPANY.
SJC-11161.
December 4, 2012. - April 4, 2013.
Insurance, Title insurance, Coverage, Insurer's obligation to defend. Real Property, Title insurance. Contract,
Insurance. Mortgage, Insurance of mortgagee's interest. Land Court, Jurisdiction. Practice, Civil, Complaint, Transfer
of action to Superior Court, Removal of case to federal court. Supreme Judicial Court, Certification of questions of
law.

CERTIFICATION of questions of law to the Supreme Judicial Court by the United States District Court for the
District of Massachusetts.

Richard E. Briansky for the plaintiff.

Jason A. Manekas for the defendant.

Present: Ireland, C.J., Spina, Cordy, Botsford, Gants, Duffly, & Lenk, JJ.

SPINA, J.

This case involves multiple litigations among three parties--First American Title Insurance Company (First American),
the insurer; GMAC Mortgage, LLC (GMAC), the insured mortgagee; and Elizabeth Moore (Mrs. Moore), the
homeowner--arising out of a defect in the title to Mrs. Moore's home. First American brought suit on behalf of GMAC
in the Land Court, seeking to reform the deed to Mrs. Moore's property or to equitably subrogate her interest in the
property behind GMAC's mortgage. Because of the Land Court's jurisdictional restrictions, Mrs. Moore then initiated
suit in the Superior Court against GMAC, alleging intentional infliction of emotional distress and violation of G.L. c.
93A for GMAC's unfair and deceptive conduct in pursuing foreclosure, and "money had and received" for mortgage
payments alleged to have been made to GMAC in error. Because the two actions were closely related, the Chief
Justice for Administration and Management ordered, pursuant to his power under G.L. c. 211B,

Download sjc-11161.pdf

Massachusetts Law