[Cite as Castin, L.L.C. v. First Am. Title Ins. Co., 2014-Ohio-476.]


STATE OF OHIO                      )                          IN THE COURT OF APPEALS
                                   )ss:                       NINTH JUDICIAL DISTRICT
COUNTY OF SUMMIT                   )

CASTIN, LLC                                                   C.A. No.   26907

        Appellant

        v.                                                    APPEAL FROM JUDGMENT
                                                              ENTERED IN THE
FIRST AMERICAN TITLE INS. CO.                                 COURT OF COMMON PLEAS
                                                              COUNTY OF SUMMIT, OHIO
        Appellee                                              CASE No.   CV 2011 05 2848

                                  DECISION AND JOURNAL ENTRY

Dated: February 12, 2014



        MOORE, Presiding Judge.

        {¶1}     Plaintiff, Castin, LLC (“Castin”), appeals from the judgment of the Summit

County Court of Common Pleas. This Court affirms.

                                                         I.

        {¶2}     In 2001, The Lawson Company d/b/a DairyMart, transferred title to real property

to Castin, LLC (“Castin”). In connection with this transfer, First American Title Insurance

Company (“First American”) issued an Owner Title Insurance Policy to Castin. After the deed

was signed and delivered, but prior to recording the deed, the name of the grantor on the first line

of the deed, which was typed as “The Lawson Company,” was crossed out, and “Lawson Milk

Co.” was handwritten above the stricken language. (Capitalization omitted.)

        {¶3}     In 2011, Castin intended to transfer title of the real property to its newly

established sister LLC known as BSH Properties, LLC (“BSH”), with Castin retaining ownership

of the business located on the property. After this planned transfer, Castin and BSH intended to
                                                  2


obtain a loan from JP Morgan Chase Bank (“Chase”) in the amount of approximately $350,000,

secured by the real property and the business. However, when preparing the transfer of the real

property, Castin first learned of the deed alteration. It then informed Chase to postpone loan

proceedings because there was a title issue pertaining to the real property. Based upon Castin’s

representations to Chase regarding the state of the title, the planned loan never closed.

       {¶4}     Castin sent written notice of the alteration to First American and requested that it

take action to quiet title to the property. However, First American advised Castin that it had

decided not to take action because it did “not believe the words added to the deed after its

execution and delivery [made] the deed defective.” However, First American offered to provide

a letter of indemnity to another title insurance company, Chicago Title Insurance Co. (“Chicago

Title”), wherein it would have agreed to indemnify Chicago Title in insuring the transfer of the

real property from Castin to BSH. Chicago Title agreed to proceed to insure the transfer with

this letter of indemnification, but Castin advised Chicago Title not to accept the letter. First

American further offered to insure the transfer itself, but Castin declined the offer.

       {¶5}    In 2011, Castin filed a complaint, and in 2012 filed an amended complaint,

against First American for breach of contract and bad faith.1 Castin alleged that, because of the

modification to the deed which had not been cured by First American, it was unable to transfer

the property to BSH. Because it could not transfer the property, Castin maintained that it could

not close on its loan as it had planned with Chase. Castin alleged damages resulting from its

inability to obtain a loan together with attorney fees and costs incurred in its attempt to cure the

alleged defect in the deed.

       1
         The original complaint named several other parties as defendants, including The
Lawson Company d/b/a Dairy Mart. However, the amended complaint named only First
American and a First American employee as defendants. The trial court later dismissed the
complaint against the employee on his motion.
                                                  3


       {¶6}    In 2012, First American moved for summary judgment. After Castin filed its

memorandum in opposition and First American replied, the trial court granted summary

judgment to First American and dismissed Castin’s complaint. Castin timely appealed from the

judgment of the trial court, and it now presents one assignment of error for our review.

                                                 II.

                                  ASSIGNMENT OF ERROR

       THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT[.]

       {¶7}    In its sole assignment of error, Castin argues that the trial court erred in granting

summary judgment in favor of First American. We disagree.

       {¶8}    The trial court determined this matter on summary judgment. We review an

award of summary judgment de novo. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105

(1996). We apply the same standard as the trial court, viewing the facts of the case in the light

most favorable to the non-moving party and resolving any doubt in favor of the non-moving

party. Viock v. Stowe-Woodward Co., 13 Ohio App.3d 7, 12 (6th Dist.1983).

       {¶9}    Pursuant to Civ.R. 56(C), summary judgment is proper only if:

       (1) No genuine issue as to any material fact remains to be litigated; (2) the
       moving party is entitled to judgment as a matter of law; and (3) it appears from
       the evidence that reasonable minds can come to but one conclusion, and viewing
       such evidence most strongly in favor of the party against whom the motion for
       summary judgment is made, that conclusion is adverse to that party.

Temple v. Wean United, Inc., 50 Ohio St.2d 317, 327 (1977).

       {¶10} Here, the parties’ arguments in support of and against summary judgment

essentially focused on two questions of law based upon the undisputed facts set forth in our

recitation above. First, the parties disputed whether the modification of the deed resulted in

“defective” title. Second, the parties disputed the interpretation of the insurance contract.
                                                4


       {¶11} As this Court explained in First Merit Bank, NA v. Guarantee Title & Trust Co.,

9th Dist. Summit No. 22894, 2006-Ohio-3333, ¶ 11,

       “A title insurance policy is a contract between the insured and insurer.” Chicago
       Title Ins. Co. v. Huntington Natl. Bank, 87 Ohio St.3d 270, 273 (1999), citing
       Ohio Farmers Ins. Co. v. Cochran, 104 Ohio St. 427 (1922), paragraph one of the
       syllabus. Therefore, the construction of an insurance contract is a matter of law
       and the goal in construing the policy is to determine the parties’ intent. Chicago
       Title Ins. Co., 87 Ohio St.3d at 273. We must examine the policy as a whole,
       looking for the plain and ordinary meaning of the terms unless another meaning is
       apparent from the record. Id., citing Alexander v. Buckeye Pipe Line Co., 53 Ohio
       St.2d 241 (1978), paragraph two of the syllabus.

       {¶12} Here, the policy provides that First American would insure Castin against “loss or

damage” incurred by reason of: “1. Title to the estate or interest described in Schedule A being

vested other than as stated therein; 2. Any defect in or lien or encumbrance on the title; 3.

Unmarketability of the title; 4. Lack of a right of access to and from the land.” Section 7 of the

“Conditions and Stipulations” portion of the policy, provides:

       This policy is a contract of indemnity against actual monetary loss or damage
       sustained or incurred by the insured claimant who has suffered loss or damage by
       reason of matters insured against by this policy and only to the extent herein
       described.

       {¶13} In First Merit at ¶ 22-24, we found persuasive the Eighth District’s description of

indemnity agreements in Schwartz v. Stewart Title Guar. Co., 134 Ohio App.3d 601, 614 (8th

Dist.1999). There, the Eighth District explained:

       To trigger the duty to indemnify, the insured must have a claim asserted against
       the title by a third party because an indemnity is a * * * collateral promise to
       make good a loss or injury suffered by a policyholder in consequence of the act of
       a third party. The kind of loss contemplated by such policy is that loss or damage
       sustained when, because of a defect in the title, the insured was bound to pay
       something to make it good.

(Internal citations and quotations omitted.) Thus, in order to recover under the policy, which by

its own terms is a contract of indemnity, Castin had to suffer loss or damage because of a

challenge to the title by a third party. See Schwartz at 614. The undisputed facts in this case
                                                 5


establish that no party had made a claim against Castin’s title. All of the damages alleged by

Castin arose from its own actions in challenging its title, and from its own representations to

Chase regarding the state of the title.

       {¶14} Despite this fact, Castin maintains that “Section 9 of the Conditions and

Stipulations of the policy provides that First American’s obligations to Castin, LLC are not fully

performed until First American removes the defect ‘in a reasonably diligent manner by any

method, including litigation and completion of any appeals therefrom.’” However, Section 9 of

the Conditions and Stipulations of the policy provides as follows:

       9. LIMITATION OF LIABILITY.

       (a) If the Company establishes the title, or removes the alleged defect, lien or
       encumbrance, or cures the lack of a right of access to or from the land, or cures
       the claim of unmarketability of title, all as insured, in a reasonably diligent
       manner by any method, including litigation and the completion of any appeals
       therefrom, it shall have fully performed its obligations with respect to that matter
       and shall not be liable for any loss or damage caused thereby.

       {¶15} We do not read this provision as requiring First American to take any action.

Instead, Section 9 defines the circumstances under which First American’s duties under the

contract are completed. Section 4, the Conditions and Stipulations section, provides when First

American must take action and when it has discretion to proceed:

       (a) Upon written request by the insured * * *, the Company, at its own cost and
       without unreasonable delay, shall provide for the defense of an insured in
       litigation in which any third party asserts a claim adverse to title or interest as
       insured, but only as to those stated causes of action alleging a defect, lien or
       encumbrance or other matter insured against by this policy. The Company shall
       have the right to select counsel of its choice (subject to the right of the insured to
       object for reasonable cause) to represent the insured as to those stated causes of
       action and shall not be liable for and will not pay the fees of any other counsel.
       The Company will not pay any fees, costs or expenses incurred by the insured in
       the defense of those causes of action which allege matters not insured against by
       this policy.

       (b) The Company shall have the right, at its own cost to institute and prosecute
       any action or proceeding or to do any other act which in its opinion may be
                                                  6


        necessary or desirable to establish the title to the estate or interest, as insured, or
        to prevent or reduce loss or damage to the insured. The Company may take any
        appropriate action under the terms of this policy whether or not it shall be liable
        hereunder, and shall not concede liability or waive any provision of this policy. If
        the Company shall exercise its rights under the paragraph, it shall do so diligently.

        {¶16} Therefore, pursuant to Section 4(b), First American had the discretion to

determine whether to take action in the absence of an adverse claim. See also Schwartz at ¶ 612

(“[u]nder the policy, whether to take action to cure alleged title defects is a matter committed to

the sole discretion of the insurer.”).   In regard to Section 9(a) of the terms and condition, this

provision “explains what happens if [the insurer] exercises this discretionary right, but creates no

obligation. That an insurer may take certain action does not mean that it must do so.” (Citations

omitted.) Id.      Accordingly, we conclude that Castin’s argument that First American was

obligated to act under Section 9 of the Conditions and Stipulations lacks merit.

        {¶17} The undisputed facts establish that the purported damages Castin suffered were

not the result of a third party’s adverse claim. Consequently, based upon the plain terms of the

policy and the nature of a contract of indemnity, First American was not obligated to take any

action in regard to the purported defect. Therefore, the trial court properly granted summary

judgment in favor of First American.

                                                 III.

        {¶18} Accordingly, Castin’s sole assignment of error is overruled. The judgment of the

trial court is affirmed.

                                                                                  Judgment affirmed.




        There were reasonable grounds for this appeal.
                                                 7


       We order that a special mandate issue out of this Court, directing the Court of Common

Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy

of this journal entry shall constitute the mandate, pursuant to App.R. 27.

       Immediately upon the filing hereof, this document shall constitute the journal entry of

judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the

period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is

instructed to mail a notice of entry of this judgment to the parties and to make a notation of the

mailing in the docket, pursuant to App.R. 30.

       Costs taxed to Appellant.




                                                     CARLA MOORE
                                                     FOR THE COURT



WHITMORE, J.
HENSAL, J.
CONCUR.


APPEARANCES:

THOMAS C. LOEPP, Attorney at Law, for Appellant.

MICHAEL J. SIKORA, III and JONI TODD, Attorneys at Law, for Appellee.
