Guenther et al v. Old Republic National Title Insurance Company

Filing 122

MEMORANDUM DECISION AND ORDER Re: Plaintiffs' Motion in Limine to Exclude Alternative Access Theories. Plaintiffs' Motion in Limine to Exclude Alternative Access Theories (Docket No. 88 ) is DENIED. Signed by Judge Ronald E. Bush. (jp)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

JOSEPH GUENTHER, an individual, and
MICHELLE G. RYERSON, an individual,

Case No. 1:12-cv-00237-REB
MEMORANDUM DECISION AND
ORDER RE: PLAINTIFFS’ MOTION
IN LIMINE TO EXCLUDE
ALTERNATIVE ACCESS THEORIES

Plaintiffs,
v.
OLD REPUBLIC NATIONAL TITLE
INSURANCE COMPANY, a Minnesota
Corporation,

(Docket No. 88)

Defendant.

Now pending before the Court is Plaintiffs’ Motion in Limine to Exclude Alternative
Access Theories (Docket No. 88). Having carefully considered the record, participated in oral
argument, and otherwise being fully advised, the Court enters the following Memorandum
Decision and Order:
I. BACKGROUND
On October 21, 2013, the undersigned issued an Order Setting Trial and Pretrial
Conference (Docket No. 84). Among other things, that Order stated: “On or before November
15, 2013, the parties shall file a stipulation concerning those issues (and any corresponding time
frame(s) relevant to such issues) to be resolved by the Court during the bifurcated portion of the
trial.” Order, p. 1 (Docket No. 84).

MEMORANDUM DECISION AND ORDER - 1

On November 14, 2013, the parties submitted the requested Stipulation (Docket No. 85).
Among other things, that Stipulation identified the following issue for the Court’s resolution:
If the Easement terminated, whether legal access existed by virtue of any of the
following alternative access theories: (1) Idaho Code § 40-202/Public Right of Way;
(2) Quasi-Estoppel/Permissive Use; and (3) Easement by Prescription. Plaintiffs
contend these alternative theories are not available to [Old Republic]. Thus, prior
to hearing argument and testimony regarding these alternative theories, the Court
will first need to address the issue of whether [Old Republic] has the right to pursue
these alternative theories.
Stipulation, p. 2 (Docket No. 85).
In a November 19, 2013 Order, the undersigned acknowledged a February 26, 2014 pretrial motions/motions in limine deadline, however determined that “an earlier resolution of the
‘alternative access theories’ issue described in the parties’ Stipulation is warranted.” Order, p. 2
(Docket No. 86). Consistent with the Court’s briefing schedule, on December 11, 2013,
Plaintiffs filed the at-issue Motion in Limine (Docket No. 88) and, on December 23, 2013, Old
Republic filed its response thereto (Docket No. 89).
II. DISCUSSION
This Court previously determined as a matter of law that the policy of title insurance
(“Policy”) at play here “provides coverage in instances where no right of access – legal access –
exists to and from the [relevant property].” 9/26/13 MDO, p. 18 (Docket No. 81) (emphasis in
original). However, whether legal access to that property in fact existed during the applicable
time period remains an unsettled question before this Court – one that is set to be tried in the
upcoming trial. See id. at p. 19. To that end, it is expected that Old Republic will advance
different arguments – the “alternative access theories” – that, if accepted, would establish the
requisite legal right-of-way and, thus, preclude coverage under the Policy. Plaintiffs object to

MEMORANDUM DECISION AND ORDER - 2

any consideration of those theories, arguing that: “(1) Old Republic did not assert these various
theories at the time it denied Plaintiffs’ claim for coverage, and it should in defense of its
conduct be limited to the bases on which it actually relied for its denial; (2) Old Republic both
lacks standing and has failed to join necessary and indispensable parties for proper litigation and
judicial consideration of these various theories; and (3) the historical facts giving rise to this case
do not provide any justifiable basis for this Court to review indisputable factual realities of the
property access that are contrary to Old Republic’s asserted theories.” Mem. in Supp. of Mot. in
Limine, p. 2 (Docket No. 88, Att. 1). Old Republic disagrees. See Opp. to Mot. in Limine, p. 4
(Docket No. 89). In an effort to assist the parties in their trial preparation work, Plaintiffs’
arguments are briefly addressed in order below.
A.

Old Republic is Not Estopped From Raising its Alternative Access Theories at Trial
In its September 26, 2013 Memorandum Decision and Order, this Court found that,

“while it is hereby understood that the Policy provides coverage when no legal right of access to
the Property exists . . . , Plaintiffs must still prove that they actually had no such right (and, in
doing so, contend with and rebut Old Republic’s arguments to the contrary), along with their
alleged, recoverable damages that resulted therefrom.” 9/26/13 MDO, p. 18 (Docket No. 81).
From this, Plaintiffs’ Motion in Limine attempts to freeze in time the action’s lynchpin issue to
what literally took place vis à vis Old Republic’s denial of coverage:
Fundamentally, then, the question presented by this litigation is whether legal access
for the Plaintiffs’ property actually existed at the time that Plaintiffs purchased the
property, not whether legal access could have been established by asserting any of
Old Republic’s various and newly-asserted theories to an appropriate court in an
action involving the appropriate parties. By its attempted reliance on mere theories,
Old Republic would have this Court suspend the reality of what actually existed in
2009 and instead make its decision based upon a fictional version of what the status
of the property could have been if anyone had, prior to that time, made such an
MEMORANDUM DECISION AND ORDER - 3

argument. Simply stated, that Old Republic can conceive of various arguments to
assert for obtaining confirmation in 2014 that legal access could have been
established, does not change the fact that as of 2009 there was no such confirmation
by any court or appropriate authority that actually had established the existence of
access rights sufficient to deny coverage under the Policy.
Mem. in Supp. of Mot. in Limine, p. 4 (Docket No. 88, Att. 1) (emphasis in original). In turn,
Plaintiffs argue that, because Old Republic did not assert any of the alternative access theories at
the time it originally denied coverage under the Policy, Old Republic is estopped from now
doing so in defense of Plaintiffs’ claims against it. See generally id. at pp. 4-8 (“This case
should be proceeding to trial only on what was, in fact, the status of the access rights for the
Plaintiffs’ property as of 2009. . . . . Plaintiffs respectfully requests that this Court . . . not allow
Old Republic to assert coverage arguments at the trial of this action that it did not previously rely
on in making the initial coverage determination.”).
Old Republic naturally disagrees, claiming that it not only sufficiently laid out its
position on the access issue when originally denying coverage under the Policy, but that,
regardless, Plaintiffs suffered no prejudice owing to any alleged shortcomings/ambiguities in Old
Republic’s decision not to provide coverage. See Opp. to Mot. in Limine, p. 6 (Docket No. 89).
The undersigned agrees with Old Republic.
First, it cannot be said that Old Republic’s alternative access theories have heretofore
been kept “on ice,” just waiting for Plaintiffs to bring a declaratory relief action against it, or are
self-serving responses prompted for the first time by the same. Rather, as Old Republic points
out in its briefing, Old Republic told Plaintiffs that it was denying their claim because it believed
there was legal access to the property in question. See id. at p. 5. For example, in a February 8,
2010 letter (nearly two years before Plaintiffs initially brought this action in state court), Old

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Republic rejected Plaintiffs’ coverage argument (relating to, inter alia, the denial of a zoning
application), stating in no uncertain terms that:
The assurance of a ‘right of access’ is not equivalent to a guarantee that the property
either directly abuts a public street or is even benefitted by a recorded easement. It
merely insures a right of access.
2/8/10 Ltr. from Shaw to Lloyd (Docket No. 56, Att. 2); see also 1/5/10 Ltr. from Shaw to
Guenther (Docket No. 56, Att. 3). By citing case law on the subject, while simultaneously
countering Plaintiffs’ additional coverage arguments, Old Republic was contending (and still
does contend) that, via various legal theories (e.g., the alternative access theories), Plaintiffs do
indeed enjoy a right of access – legal access – to their property.1 Whether these arguments
actually prevail is not resolved by this Memorandum Decision and Order, but reserved for a later
day.2
Second, even assuming Old Republic’s denial of coverage lacked explanatory particulars,
there is no indication that Plaintiffs suffered any prejudice as a result – above and beyond having
to bring the instant action. See Opp. to Mot. in Limine, pp. 5-6 (Docket No. 89) (quoting 1 Ins
Claims and Disputes § 2:24 (6th ed.) (“An insurance company should state in its declination of
coverage letter all of the grounds that are then available for denying coverage. Its failure to do

1

Such communication differentiates this case with Sauer v. Home Indem. Co., 841 P.2d
176 (Alaska 1992). There, the defendant failed to communicate to the insured’s representative
its denial of defense or coverage until after litigation commenced. See id. at 179-80, 82-83
2

During oral argument, Plaintiffs’ counsel occasionally directly challenged the merits of
certain of Old Republic’s alternative access theories. There is a natural overlap in such
arguments; however, the Court views Plaintiffs’ Motion in Limine to speak only to Old
Republic’s ability to raise such arguments, not whether those arguments should be dismissed for
lack of substantive heft – to be sure, as already stated, “these arguments are just too
underdeveloped and dependent upon unresolved questions of fact to decide as a matter of law . . .
.” 9/26/13 MDO, p. 19 (Docket No. 81).
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so, however, should rarely give rise to an estoppel. . . . . There should, therefore, be no
presumption of prejudice to the insured by reason of an inadequate declination of coverage letter.
In order to establish an estoppel, the insured should have to demonstrate actual prejudice by
reason of the letter. Moreover, it has been held that prejudice beyond the mere filing of a lawsuit
against the insurer is required.”)).3 Here, based upon the record provided thus far, evidence of
Plaintiffs’ prejudice is lacking. To the contrary, (1) Plaintiffs reasonably and justifiably made
arguments resembling some of Old Republic’s alternative access theories (to show on the one
hand that they had legal access to their property) to the Ada County Board of Commissioners
after the Ada County Development Services denied their building permit application; and (2)
Plaintiffs were aware of Old Republic’s alternative access theories before Old Republic moved
for summary judgment (to counter Plaintiffs’ declaratory action to determine on the other hand
that they did not have access to their property), yet raised no similar estoppel arguments in their
opposition thereto.
Simply put, Old Republic’s alternative access theories respond to Plaintiffs’ claims so as
to, in essence, defend Old Republic from liability. These alternative access theories are not as
new as Plaintiffs submit and, furthermore, Plaintiffs are not prejudiced by having those theories

3

Section 2:24, titled “Contents of Declination of Coverage Letter – Estoppel From
Asserting Unmentioned Policy Defenses,” goes on to state:
Summarizing, an insurer should not automatically be estopped from denying
coverage on any ground not specified in its declination of coverage letter, even
though the insurer had actual or constructive knowledge of such additional defense
at the time it denied coverage. Absent extraordinary circumstances, failure to specify
a particular defense will not prejudice the insured. An insured’s estoppel claim
should, therefore, be considered on a case-by-case basis, and it should be given effect
only when such unusual circumstances are present.
1 Ins Claims and Disputes § 2:24 (6th ed.) (internal citations omitted).
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further considered at this stage of the lawsuit. With all this in mind, Old Republic is entitled to
argue its alternative access theories at trial, based on the arguments raised in Plaintiffs’ Motion
in Limine. Plaintiffs’ Motion in Limine is therefore denied in this respect.
B.

Old Republic Has “Standing” to Raise its Alternative Access Theories at Trial
Plaintiffs argue that Old Republic’s alternative access theories essentially amount to Old

Republic asking this Court for a declaratory judgment of its own (to the effect of an affirmative
ruling that Plaintiffs have legal access to their property) and, because it is only an interested
party without any involved property ownership, Old Republic lacks standing to pursue such
recourse:
First, for each of the alternate theories asserted, Old Republic is in reality asking this
Court for either a declaratory or a quiet title judgment from this Court that Plaintiffs
had access, other than by recorded rights, over property owned by persons not parties
to this litigation. However, as Old Republic does not, itself, own property that would
benefit from an access right across the Ada County parcel, it lacks standing to bring
an action (or a claim in this action) that such an access right exists/existed. . . . .
What Old Republic would be seeking to do with its theories is to obtain a judicial
declaration over the “[property] rights, status, and other legal relations” among
Plaintiffs, Ada County, and/or ACHD.
See Mem. in Supp. of Mot. in Limine, p. 8 (Docket No 88, Att. 1) (citation omitted). Plaintiffs’
argument presumes too much.
Old Republic is not asking this Court to rule as a matter of law that Plaintiffs have legal
access to their property. If that were the case, reflected by, for example, Old Republic’s separate
declaratory action, Plaintiffs’ argument might be correct. But, without such a condition
precedent, Plaintiffs’ argument is missing a backbone. Here, Old Republic’s alternative access
theories operate to support its denial of Plaintiffs’ allegation that Old Republic breached the
Policy – the fact that this Court’s consideration of such theories may go to the issue of Plaintiffs’

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access does not morph Old Republic’s defense of Plaintiffs’ claims into some sort of affirmative
action requiring the standing that Plaintiffs’ now contend. Otherwise, what is an insurer like Old
Republic to do in situations where it disagrees with a similarly-situated insured and there is no
duty to defend (as the undersigned has already concluded)? The law simply does not support the
conclusion that Plaintiffs ask this Court to reach. Old Republic has “standing” to raise its
alternative access theories at trial. Plaintiffs’ Motion in Limine is therefore denied in this
respect.
C.

Old Republic’s is Not Precluded From Raising its Alternative Access Theories at
Trial for Failure to Join Indispensable Parties
In its September 26, 2013 Memorandum Decision and Order denying, in part, Old

Republic’s motion for summary judgment, this Court briefly spoke to Old Republic’s thengerminating alternative access theories, stating:
Old Republic also advances other theories that, if accepted, would create a legal
right-of-way for Plaintiffs to use the Barnes Main Access Road. However, these
arguments would apply to burden land owned by an entity not a party to this action.
Notwithstanding any questions of fact that may prevent a finding in favor of Old
Republic on these points, the undersigned is reluctant to resolve as a matter of law
claims impacting a non-party and therefore declines to do so here.
9/26/13 MDO, p. 19, n.10 (Docket No. 81). Based on this portion of the prior Order, Plaintiffs
additionally argue that Old Republic has failed to join the parties that are needed in order to
consider and resolve Old Republic’s corresponding arguments. See Mem. in Supp. of Mot. in
Limine, pp. 10-11 (Docket No. 88, Att. 1) (“Under Idaho law, it is incumbent upon the party
seeking a judicial declaration of the existence of a property interest, when that interest would
encumber land owned by other parties, to join the owners of the would-be encumbered property
as parties in the litigation. . . . . [A]s the party seeking a declaration by this Court of an access

MEMORANDUM DECISION AND ORDER - 8

right that would burden land owned by other parties, Old Republic had the burden to join the
other property owners that would be affected by this suit (in particular, Ada County and/or the
Ada County Highway District),but it failed to do so.”). For reasons similar to those articulated
above regarding Old Republic’s “standing,” the undersigned disagrees.
As previously expressed, Old Republic is not seeking declaratory relief; instead, it is
disputing Plaintiffs’ claim against it, which happen to speak to access issues relating to
Plaintiffs’ property and, likewise, coverage under the Policy. This distinction, while somewhat
nuanced, is important because it highlights the fact that any decision from this Court will only
affect those parties to the Policy – Plaintiffs and Old Republic. That is, either coverage exists or
it doesn’t. Certainly, evidence surrounding Old Republic’s alternative access theories may
involve other, non-joined parties and, thus, may present some difficulty in proving its defense to
Plaintiffs’ claims. But that fact does not mean that those parties must be joined in this action
before resolving the parties’ coverage dispute. The other parties may likely be part of the mix of
evidence put before the Court, and such evidence may have implications for similar disputes
between other parties, but the ultimate result of the Court’s rulings in this case are likely limited
to the parties on hand. It is a messy way to sort out property rights, perhaps, but in the context of
the instant dispute over the nature of coverage under a particular title insurance policy, it is the
only way available.
Hence, Old Republic is not precluded from raising its alternative access theories at trial
for failure to join indispensable parties. Plaintiffs’ Motion in Limine is therefore denied in this
respect.

MEMORANDUM DECISION AND ORDER - 9

D.

Old Republic is Permitted to Raise its Public Right-of-Way Alternative Access
Theory at Trial
Plaintiffs also argue that Old Republic’s alternative access theory that the Barnes Main

Access Road was a public right-of-way is separately problematic because (1) its application
necessarily runs afoul of Idaho’ statutory law dealing with rights-of-way validation proceedings,
and (2) there was never a valid dedication for public use of the road because of the “undisputed
record chain of ownership.” See Mem. in Supp. of Mot. in Limine, pp. 11-15 (Docket No. 88,
Att. 1). These arguments will not prevent Old Republic from testing such an alternative access
theory at trial.
Significantly, Old Republic is not seeking to have the Barnes Main Access Road
validated as a public right-of-way as a product of this litigation; rather, it argues that the Barnes
Main Access Road is already a public right-of-way and asks that this Court recognize as much to
combat Plaintiffs’ claims against it. The parties’ disagreement on this point (demonstrated by
their dueling evidentiary support) goes to the merits of the public right-of-way alternative access
theory and does not outright foreclose Old Republic from at least making the argument going
forward. More fundamentally, to the extent the parties maintain different understandings and
arguments as to how a public right-of-way is established and how that applies to the historical
backdrop of this case, the undersigned is not in a position to pick a winner right now. That is the
purpose of the upcoming bench trial, if it gets to that point.4 For these reasons, Old Republic is

4

Old Republic suggests (in response to Plaintiffs’ Motion in Limine and elsewhere) that,
because Plaintiffs have made arguments similar to those now offered by Old Republic on this,
and other points (albeit at a different time, in a different setting, and by different counsel),
Plaintiffs themselves should be estopped from now making different/contradicting arguments.
Relatedly, Plaintiffs have recently moved in limine to preclude Old Republic from making any
reference to arguments Plaintiffs made in underlying proceedings as “admissions.” See Mot. in
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permitted to raise its public right-of-way alternative access theory at trial. Plaintiffs’ Motion in
Limine is therefore denied in this respect.
III. CONCLUSION
Based on the foregoing, it is HEREBY ORDERED THAT Plaintiffs’ Motion in Limine
to Exclude Alternative Access Theories (Docket No. 88) is DENIED.5

DATED: March 10, 2014

Honorable Ronald E. Bush
U. S. Magistrate Judge

Limine (Docket No. 96). These arguments are neither addressed nor resolved by this
Memorandum Decision and Order, but will be taken up at a later date in the context of Plaintiffs’
separate, above-referenced motion in limine.
5

This conclusion does not necessarily resolve any of the issues raised in Plaintiffs’
recent motion in limine, characterizing Old Republic’s alternative access theories as affirmative
defenses, and seeking their exclusion for possibly different reasons (Docket No. 95). These
arguments will be taken up at a later date in the context of this separate motion in limine.
MEMORANDUM DECISION AND ORDER - 11