Murnan Spring Hill Trust v. Stewart Title Guaranty Company, No. 09-1490 (4th Cir. 2010)

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UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 09-1490 MURNAN SPRING HILL TRUST, Plaintiff Appellant, and ALEXANDRA P. MURNAN, Trustee, Plaintiff, v. STEWART TITLE GUARANTY COMPANY, Defendant Appellee. Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. T. S. Ellis, III, Senior District Judge. (1:08-cv-00002-TSE-JFA) Argued: January 26, 2010 Before TRAXLER, Judges. Chief Decided: Judge, and SHEDD and March 31, 2010 DAVIS, Circuit Affirmed by unpublished per curiam opinion. Kenneth A. Martin, THE MARTIN LAW FIRM, PLLC, McLean, Virginia, for Appellant. F. Douglas Ross, III, ODIN, FELDMAN & PITTLEMAN, PC, Fairfax, Virginia, for Appellee. Unpublished opinions are not binding precedent in this circuit. PER CURIAM: Alexandra judgment P. against Murnan appeals the her on her breach judgment is appropriate order of granting contract summary claim. We affirm. Summary if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). We review the district court's order granting summary judgment de novo. Jennings v. Univ. of North Carolina, 482 F.3d 686, 694 (4th Cir. 2007) (en banc). so, we view the nonmoving party. facts in the light most favorable In doing to the Scott v. Harris, 550 U.S. 372, 378 (2007). Murnan created the Murnan Spring Hill Trust ( the Trust ) under which she is the sole holder of the right to revoke the trust as well as the sole beneficiary of the Trust for the duration of her life. After a series of real estate transactions, Murnan acquired a piece of property in McLean, Virginia, on the Trust s behalf. Before closing on the purchase contract, Murnan, as trustee, purchased a title insurance policy from Stewart Title Guaranty Co. There were multiple federal tax judgments pending against Murnan in her individual capacity when the policy was issued. 2 Pursuant to the title insurance policy, Stewart Title agreed to insure against loss or damage . . . sustained or incurred by the insured by reason of . . . [a]ny defect or encumbrance on the title [or] [u]nmarketability of title. 128. However, liens, encumbrances, created, the suffered, claimant. policy excludes adverse claims assumed J.A. 128. or from or agreed coverage other to defects, matters by J.A. the . . . insured The policy listed three items which were specifically excluded from coverage: a deed of trust securing a loan, taxes subsequent to the year 2002, and a water main easement. Less than a year after she purchased the property, Murnan entered into a contract to sell the property to a third party. Murnan claims that the sale foundered because the tax judgments against her in her individual capacity attached to the property in the form of tax liens when she purchased the property as trustee, and, as a result, the potential buyer could not obtain title insurance on the property. Murnan then filed a claim with Stewart Title for coverage, and her claim was denied. Murnan defaulted on her mortgage payments, and the lender foreclosed on the property. Murnan later brought this action claiming that Stewart breached Title the policy coverage. 3 by failing to provide On cross-motions, the district judgment in favor of Stewart Title. court granted summary First, the court held that the federal tax liens against Murnan in her personal capacity attached to the property pursuant to 26 U.S.C. § 6231 when she purchased it as trustee. Additionally, the court held that the tax liens were excluded from coverage under the policy because Murnan, as trustee, suffered the liens accepting title on behalf of the Trust. on the property by Murnan challenges this second ruling on appeal, contending that the court misconstrued the policy. Although Murnan correctly notes that we construe ambiguities in an insurance policy against the insurer, Lincoln Nat l Life Ins. Co. v. Commonwealth Corrugated Container Corp., 327 S.E.2d 98, 101 (Va. 1985), the policy s exclusion of liens suffered by the insured is not susceptible to more than one construction. As the Suffer has only one meaning in this context. district court noted, the Sixth Circuit examined a provision excluding risks created, suffered, assumed or agreed to by the insured, which is identical to the language used in the policy here, and it explained that the term suffered has been interpreted to mean consent with the intent that what is done is to be done, . . . and has been deemed synonymous with permit, which implies the power to prohibit or prevent the claim from arising. . . . Am. Sav. & Loan Ass'n v. Lawyers 4 Title Ins. Corp., 793 F.2d 780, 784 (6th Cir. 1986) (citations omitted); see (defining suffer also Black s to Law include Dictionary to allow or (8th permit ed. 2004) (an act, that the etc.) ). The district court rejected Murnan s argument inquiry is whether she, as trustee, caused the tax liens to arise in the first place. Instead, it identified the key issue to be whether Murnan, as trustee, permitted the liens to attach to the property. suffered the It then explained that Murnan, as trustee, liens on the property when she purchased the property because (1) she was aware of the IRS tax judgments against her when she purchased the property; (2) those judgments automatically became liens on all property held by her, including her rights to trust property; and (3) she knew that she held expansive rights to the trust property as the lifetime beneficiary and grantor with the unconditional right to revoke the trust. Therefore, the court concluded that the tax liens were excluded from coverage. * * The district court did not rule on Murnan s argument that Stewart Title waived, or is estopped from asserting, the exclusion provision at issue. However, to the extent that these arguments are properly before us, they fail under the facts of this case. See Sharp v. Richmond Life Ins. Co., 183 S.E.2d 132 (Va. 1971) (holding that although the insurer issued the policy with knowledge of the insured s health problems but failed to specifically exclude them, the insurer could later deny coverage under a general exclusion provision relating to pre-existing (Continued) 5 Having arguments, reviewed and and considered applicable law, the we are record, briefs, persuaded that oral the district court reached the correct result on Murnan s claims. Accordingly, we affirm the order granting summary judgment based substantially Murnan Spring on the Hill reasoning Trust v. of the Stewart district Title court. Guaranty Co., See No. 1:08-cv-00002 (E.D. Va. April 1, 2009). AFFIRMED conditions); Employers Commercial Union Ins. Co. of Am. v. Great Am. Ins. Co., 200 S.E.2d 560, 562 (Va. 1973) (stating that waiver requires the intentional relinquishment of a known right). 6

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