                              FOURTH DIVISION
                                DOYLE, P. J.,
                           COOMER and MARKLE, JJ.

                    NOTICE: Motions for reconsideration must be
                    physically received in our clerk’s office within ten
                    days of the date of decision to be deemed timely filed.
                                http://www.gaappeals.us/rules


                                                                    October 17, 2019




In the Court of Appeals of Georgia
 A19A0971. OLD REPUBLIC NATIONAL TITLE INSURANCE
     COMPANY v. RM KIDS, LLC.

      MARKLE, Judge.

      In the second appearance of this case before this Court, Old Republic National

Title Insurance Company (“Old Republic”) appeals from the denial of its motion for

directed verdict in a trial for breach of contract, in which the jury found in favor of

RM Kids and awarded damages in the amount of $4.2 million. See Old Republic Nat.

Title Ins. Co. v. RM Kids, LLC., 337 Ga. App. 638 (788 SE2d 542) (2016). On appeal,

Old Republic argues that there was no defect in title that would trigger coverage

under the title insurance policy, and that, in any event, RM Kids suffered no damages.

After a thorough review of the evidence, and with the benefit of oral argument, we

conclude that the trial court properly denied the motion for directed verdict because
there was a defect in the title that triggered coverage, and RM Kids proffered some

evidence from which the jury could determine damages.

      [O]n appeal from the denial of a motion for a directed verdict or a
      motion for j.n.o.v., we construe the evidence in the light most favorable
      to the party opposing the motion, and the standard of review is whether
      there is any evidence to support the jury’s verdict. And because jurors
      are the sole and exclusive judges of the weight and credit given to the
      evidence, we must construe the evidence with every inference and
      presumption in favor of upholding the verdict, and after judgment, the
      evidence must be construed to uphold the verdict even where the
      evidence is in conflict. Nevertheless, we review questions of law de
      novo.


(Citations and punctuation omitted.) Old Republic Nat. Title Ins. Co., 337 Ga. App.

at 648 (5). Moreover,

      [t]he direction of a verdict is proper only where there is no conflict in
      the evidence as to any material issue, and the evidence introduced, with
      all reasonable deductions therefrom, shall demand a particular verdict.
      When there is opinion evidence, circumstantial evidence, presumptions
      of fact, or evidence subject to more than one reasonable construction,
      the appellate courts shall carefully scrutinize the grant of a directed
      verdict, because such evidence may be construed as providing the “any
      evidence” creating a jury question.




                                         2
(Citation omitted.) Canton Plaza, Inc. v. Regions Bank, Inc., 315 Ga. App. 303,

303-304 (732 SE2d 449) (2012); see also OCGA § 9-11-50 (a).

      The underlying facts are undisputed and are set out in our prior opinion. See

Old Republic Nat. Title Ins. Co., 337 Ga. App. at 638-641. In summary, in the early

1990’s, one of Colonial Pipeline Company’s (“Colonial”) pumping stations leaked

petroleum into the ground water on an area of land known as “Black Hawk Ranch”

near Dacula, Georgia. Pursuant to a consent order between Colonial and the Georgia

Environmental Protection Division, Colonial acquired the Black Hawk Ranch

property and began remediation and monitoring.

      In 2005, after reducing the contamination, Colonial sold the property to Black

Hawk Ranch, LLC, pursuant to a limited warranty deed. Attached to the deed was

“Exhibit C,” which provided the following:

      In connection with the conveyance of the Property pursuant to this
      Limited Warranty Deed, Grantor hereby notifies Grantee and its
      successors and assigns that petroleum contamination, including
      groundwater and surface water contamination, emanating from
      Grantor’s pipeline facility located adjacent to the Property was
      discovered in the early 1990s. Grantor has been assessing and
      remediating such contamination as required by the State of Georgia
      Environmental Protection Division (“EPD”) and has assumed and
      maintains full responsibility for performing the investigation,

                                         3
      remediation and monitoring of such petroleum contamination in
      accordance with applicable law and the requirements of the EPD;
      provided, however, groundwater contamination in the deep aquifer
      remains and will continue to be monitored by Grantor as required by the
      EPD.


Exhibit C also placed the following four limitations on the use of the property: (1)

no use of the groundwater for any purpose whatsoever; (2) an easement reserved by

Colonial for access and maintenance of the monitoring well on the property; (3) a

right of first refusal for Colonial to reacquire the property in the event the grantee

received an offer on the property; and (4) reservation of a 25-foot riparian buffer

easement as to Hopkins Creek and the Alcovy River.1 The certificate of title included

reference to the easement and restrictions as identified in Exhibit C.

      The property was later rezoned for residential development, and Black Hawk

Ranch sold the property to BBC Partners, LLC (“BBC Partners”). Exhibit C was

omitted from the chain of title for this sale. Old Republic issued the title insurance

policy, which covered loss or damage sustained or incurred by reason of, inter alia,

“[a]ny defect in or lien or encumbrance on the title” or “[u]nmarketability of the title.”

The policy also listed numerous exclusions, including for defects “resulting in no loss

      1
          It is undisputed that Colonial never exercised its right of first refusal.

                                             4
or damage to the insured claimant.” Old Republic Nat. Title Ins. Co., 337 Ga. App.

at 640.

      In 2006, BBC Partners purchased the adjacent property, and, again, Exhibit C

was not included in the chain of title at closing. Id. Old Republic also issued a policy

insuring title in connection with the loan for this purchase. Id.

      In 2008, RM Kids purchased the BBC Partners’s loan from a lender, and

learned of Exhibit C shortly thereafter. When BBC Partners subsequently defaulted

on the loan in 2012, RM Kids purchased the property in foreclosure. Following

unsuccessful attempts to have Old Republic address whether the omission of Exhibit

C was a title defect triggering coverage under the title insurance policy, RM Kids

filed the instant suit, alleging, as is relevant to this appeal, breach of contract.

      The case proceeded to trial and a jury found in favor of RM Kids. Old Republic

appealed, and we reversed in part, and remanded the case for a new trial. See Old

Republic Nat. Title Ins. Co., 337 Ga. App. at 644 (1).

      A second trial was held in 2018.2 The title agent for Old Republic admitted in

his testimony that Exhibit C should have been included in the coverage exceptions,

      2
        By the time of the second trial, RM Kids had defaulted on a loan for which
the property was collateral, and the loan had gone into foreclosure. As a result, RM
Kids no longer owns the property.

                                            5
but was erroneously omitted. Both sides submitted expert testimony as to the value

of the property with and without the restrictions imposed in Exhibit C. At the close

of the RM Kids’s case and again at the close of all the evidence, Old Republic moved

for a directed verdict, arguing that the alleged loss was not covered by the title

insurance policy and that RM Kids had not established damages. The trial court

denied both motions. The jury again found in favor of RM Kids, and awarded

damages in the amount of $4.2 million. This appeal followed.

      In its sole enumeration of error, Old Republic argues that the trial court erred

in denying its motion for directed verdict because the alleged loss at issue was not a

title defect, and thus it was not covered by the policy. It further contends that RM

Kids has suffered no damages apart from the stigma associated with the earlier

petroleum spill, which would not be covered under the policy because it is unrelated

to transferability of title or the ability to develop the property. We disagree with both

arguments and address each in turn.

      1. Whether the omission of Exhibit C triggered coverage under the policy

      We begin with Old Republic’s claim that there was no defect in title that would

have triggered coverage under the policy.



                                           6
       “A contract of title insurance is an agreement whereby the insurer, for a

valuable consideration, agrees to indemnify the assured in a specified amount against

loss through defects of title to real estate, wherein the latter has an interest, either as

purchaser or otherwise[.]” Beaullieu v. Atlanta Title & Trust Co., 60 Ga. App. 400,

404 (4 SE2d 78) (1939); see also OCGA § 33-7-8 (2018). “Typically, title insurance

protects a purchaser or mortgagee against defects in or encumbrances on title which

are in existence at the time the insured takes his title.” (Citation omitted.) Chicago

Title Ins. Co. v. C&S Nat. Bank, 821 FSupp 1492, 1494 (II) (N.D. Ga. 1993); see also

Couch on Insurance § 159:5 (3d ed. 2019). Title insurance, like other types of

insurance policies, are contracts, the construction and interpretation of which involve

questions of law for the court. Geiger v. Ga. Farm Bureau Mut. Ins. Co., 305 Ga.

App. 399, 400 (1) (a) (699 SE2d 571) (2010).

       [T]he parties to an insurance policy are bound by its plain and
       unambiguous terms. Thus, when faced with a conflict over coverage, a
       trial court must first determine, as a matter of law, whether the relevant
       policy language is ambiguous. A policy which is susceptible to two
       reasonable meanings is not ambiguous if the trial court can resolve the
       conflicting interpretations by applying the rules of contract construction.
       We consider the policy as a whole, to give effect to each provision, and
       to interpret each provision to harmonize with each other. Any
       ambiguities in the contract are strictly construed against the insurer and

                                            7
      insurance contracts are to be read in accordance with the reasonable
      expectations of the insured where possible. A word or phrase is
      ambiguous when it is of uncertain meaning and may be fairly understood
      in more ways than one.


(Citations and punctuation omitted.) Id. at 400-401 (1) (a).

      In determining whether the policy covered the omission of Exhibit C here, we

first look to the text of the policy, giving words their “usual and common” meaning.

Ga. Farm Bureau Mut. Ins. Co. v. Smith, 298 Ga. 716, 719 (784 SE2d 422) (2016);

see also OCGA § 13-2-2 (2). We also read the policy “as a layman would read it and

not as it might be analyzed by an insurance expert or an attorney.” (Citation omitted.)

Smith, 298 Ga. at 719. Importantly, “exceptions and exclusions to coverage must be

narrowly and strictly construed against the insurer and forgivingly construed in favor

of the insured to afford coverage.” (Citation and punctuation omitted.) Auto-Owners

Ins. Co. v. Neisler, 334 Ga. App. 284, 287 (1) (779 SE2d 55) (2015). Moreover, “an

insurer seeking to defeat a claim based on a policy exclusion has the burden of

proving that the exclusion is applicable[.]” (Citation and punctuation omitted.) Dolan

v. Auto Owners Ins. Co., 333 Ga. App. 601, 604 (773 SE2d 789) (2015).

      Given our case law, the rules of contract interpretation, and our standard of

review, we cannot say, as a matter of law, that the restrictions and easements on the

                                          8
property were not “defects” or “encumbrances” in the title. To the extent that these

terms are ambiguous because they are not defined in the policy, we turn to our rules

of contract interpretation.

      Here, reading the policy using ordinary language, coverage extended to “any

defect in or lien or encumbrance on the title” and “unmarketability of the title.”

Generally, an easement is an “encumbrance” that is a defect on the title. See

Beaullieu, 60 Ga. App. at 404; see also Couch on Insurance § 159:32 (3d ed. 2019).

Moreover, encumbrances are defects that are separate and distinct from

unmarketability because the policy uses both “defect in or lien or encumbrance” and

“[m]arketability of the title,” as alternate methods to trigger coverage. To consider

marketability the same as an encumbrance would make the language superfluous. See

Stewart Title Guaranty Co. v. Greenlands Realty, LLC, 58 FSupp2d 370, 382 (III) (A)

(1) (D.N.J. 1999); see also Couch on Insurance § 159:5 (3d ed. 2019). Indeed, as Old

Republic’s counsel acknowledged in its reply brief and at oral argument before this

Court, an easement can be a title defect.

      Moreover, as we explained in our prior opinion, where the facts of the case

raise a question of coverage, the policy is ambiguous, and the decision rests with the

jury. See Old Republic Title Ins. Co., 337 Ga. App. at 649 (5) & n.35. Thus, any

                                            9
ambiguity in the language and definition of “defect” or “encumbrance” was for the

jury to resolve. Here, RM Kids submitted expert testimony of a real estate attorney

who opined that easements and encumbrances on a property were title defects and if

not listed on the title insurance policy would be covered. He further testified that

Exhibit C was, in fact, a title defect. This evidence was sufficient for the jury to

conclude that the restrictions and easements were title defects and were covered by

the policy.3

      Old Republic’s reliance on Chicago Title Insurance Company v. Investguard,

Ltd., 215 Ga. App. 121 (449 SE2d 681) (1994), does not alter our analysis. In that

case, the property was located in a flood plain, and the purchaser argued that this

defect rendered its title to the property unmarketable. Id. at 121. This Court held that

      3
        Admittedly, RM Kids knew of the defect when it purchased the property at
the foreclosure. But that does not preclude recovery under the policy. The parties
agreed that RM Kids did not have knowledge of Exhibit C at the time it purchased the
loan, and Old Republic stipulated that it was not arguing notice. Additionally, RM
Kids would not be deemed to have constructive knowledge of the easements
contained in Exhibit C at the time it acquired the loan because it received a copy of
the security deed and assignment of security interests that omitted that exhibit rather
than a copy of the limited warranty deed. Compare Security Union Title Ins. Co. v.
RC Acres, Inc., 269 Ga. App. 359, 361 (1) (604 SE2d 547) (2004) (“When an
easement is properly recorded of public record, the world has constructive notice of
such easement whether or not they have actual notice.”). By the time RM Kids
learned of the omitted exhibit, it already owned the loan and had no recourse until the
foreclosure sale in 2012.

                                          10
defects in the physical condition of property, such as its location in a flood plain, do

not constitute a title defect. Id. at 123 (1). But the instant case is distinguishable. First,

the alleged defect in Investguard was not omitted from the chain of title as it was

here. Additionally, an easement is an “encumbrance” on the property and not merely

a “physical defect.” Moreover, in the instant case, RM Kids has not invoked the

coverage provision regarding unmarketability of title; rather, the claim is that the

property is subject to these undisclosed encumbrances that rendered the title

defective.

       Old Republic’s argument conflates the concepts of marketability of title and

economic marketability.

       While title “defect” and title “marketability” are both used to describe
       the peril against which title insurance offers protection, it is important
       to understand that only that decreased marketability which stems from
       the condition of title is within title insurance. The fact that a given
       property suffers from “economic” lack of marketability, which relates
       to physical conditions affecting the use of the property or other nontitle
       matters, is not relevant to title insurance coverage. In essence, defects
       which merely diminish the value of the property, as opposed to defects
       which adversely affect a clear title to the property, will not render title
       unmarketable within the meaning and coverage of a policy insuring
       against unmarketable title. This is often expressed by the principle that


                                             11
      one can hold perfect title to land that is valueless and one can have
      “marketable title” to land while the land itself is unmarketable.


(Citations and footnotes omitted.) Couch on Insurance § 159:7 (3d ed. 2019). Because

the basis of RM Kids’s claim was not marketability of title, Old Republic’s argument

that the property could still be bought and sold is misplaced. This was not a case

involving a simple defect in the physical condition of the property; it was an

encumbrance on the property in the form of a restriction on use and the existence of

easements, which were omitted from the chain of title and which, as Old Republic

acknowledged, can be title defects. In any event, we note that the measure of damages

per the terms of the contract is the difference between the value of the land with and

without the defect. We fail to see how the economic marketability of the land as

encumbered with these defects in title would not be a factor to consider in

determining value.

      The real crux of Old Republic’s claim is that the alleged defect resulted in no

damages and, therefore, is expressly excluded from coverage by the policy. But that

is a separate and distinct question from whether the defect triggered coverage. Our

analysis is dictated by the procedural posture of this case and by our standard of

review following the denial of a motion for directed verdict. In this posture, we

                                         12
cannot say as a matter of law that the encumbrances in Exhibit C were not title

defects. Rather, on this record, the jury was authorized to find that the easements and

use restrictions constituted title defects that would trigger coverage under the policy.

      2. Damages

      Having concluded that the restrictions placed on the property under Exhibit C

were defects in title, we next turn to whether RM Kids has proved its damages and

whether Old Republic met its burden to show the exclusion applied. With regard to

the application of a policy exclusion, we must narrowly and strictly construe the

exclusion against Old Republic and in favor of coverage. Neisler, 334 Ga. App. at

287 (1). As to whether RM Kids sufficiently established its damages, we are mindful

of our “any evidence” standard of review, and our review of the record demonstrates

that there was evidence from which a jury could find damages.

      Under the terms of the policy, damages are measured by “the difference

between the value of the insured estate or interest as insured and the value of the

insured estate or interest subject to the defect, lien or encumbrance insured against

by this policy.”

      To support its claim of damages, RM Kids submitted an appraisal showing the

value of the property with and without Exhibit C. According to its appraiser, the value

                                          13
of the property without Exhibit C was $6 million.4 He explained that the best use of

the property without the restrictions was to develop a subdivision with about 336

homes. When he included the easements and restrictions listed in Exhibit C, the value

of the property decreased to $680,000 and was best suited for use as four to six large

estate lots. He explained that notice of the contamination, as well as the restrictions

on groundwater use and the easements were all viewed negatively and would

decrease the property’s value. As part of the appraisal, the expert spoke with brokers,

lenders, and agents and each one stated that the restrictions contained in Exhibit C

would affect the ability to develop the land as well as to obtain a loan for any

development. He opined that a home buyer was unlikely to “overlook” the restrictions

and would simply purchase a competing property instead.

       RM Kids’ owner testified that he would not have purchased the loan had he

known about Exhibit C, that BBC Partners defaulted on the loan after RM Kids

purchased it because of the title defect, and that attempts to sell the land after learning

about Exhibit C were unsuccessful. He further testified that the encumbrances on the



       4
        Consistent with this Court’s conclusion in Old Republic Title Ins. Co, 337 Ga.
App. at 641 (1), the appraiser based his valuation as of the date RM Kids foreclosed
on the property. See also Beaullieu, 60 Ga. App. at 404.

                                            14
property – the limitations on use of groundwater and the easements – were title

defects that themselves caused the property to lose value.

      The closing loan officer testified that she likely would not have closed the loan

had she known about Exhibit C because it would impair the ability to develop the

property. The closing attorney explained that, when his legal assistant was preparing

the paperwork to close the loan, she mistakenly removed all of the items listed in

Exhibit C instead of only removing the right of first refusal;5 thus, Exhibit C was

omitted from the closing documents in its entirety.

      Old Republic submitted its own expert, who opined that the retrospective

market value of the property with or without Exhibit C was $1,910,000, and that RM

Kids’s expert appraiser had overvalued the property. He explained that the value of

the property decreased due in large part to the economic recession, and that the

restrictions in Exhibit C would not have impacted the value of the property. In

reaching this conclusion, he noted that Black Hawk Ranch LLC and the subsequent

buyer were both aware of Exhibit C at the time of the sales, and there did not appear

to be any impact on the sale or price of the property at that time.

      5
         The closing attorney further testified that Colonial’s right of first refusal
contained in Exhibit C had terminated. Therefore, we do not consider whether this
restriction had any impact on damages.

                                          15
      It was for the jury to evaluate this testimony and make a determination of

damages. Although the stigma from the contamination may have played a role in the

jury’s verdict, we look only to see whether there was “any” evidence to support the

jury’s findings. Canton Plaza, Inc., 315 Ga. App. at 303-304. Given the specific

expert testimony that the use restrictions and easements contained in Exhibit C

reduced the value of the property, there was evidence from which the jury could

conclude there were damages flowing from the title defects.

      Accordingly, we conclude that the easements and restrictions constituted

defects in title that are covered by the policy, and there was sufficient evidence to

establish damages. The trial court properly denied the motion for directed verdict.

      Judgment affirmed. Doyle, P. J., and Coomer, J., concur.




                                         16
