A company, as custodian for the benefit of a man’s individual retirement account, purchased property in Valencia County, N.M., and bought a title insurance policy for the property. The property was quitclaimed to another party, and then another. The man eventually filed a claim with the title company and the title insurer denied the claim because the coverage had been terminated when the property was first transferred. The man sued for breach of contract and the title insurer moved for summary judgment.
The case is Paul Kinzelman v. Stewart Title Guarantee Co. (Court of Appeals of New Mexico, No. A-1-CA-38518).
Pensco Pension Services Inc., custodian for the benefit of Paul Kinzelman, IRA #KI 120, purchased Lot 54 in Valencia County, N.M., by warranty deed in July 2001. Stewart Title Guarantee Co. issued an owner’s policy to Pensco Pension Services Inc. for Lot 54, effective the date the property was purchased.
In 2005, Pensco conveyed the property via quitclaim deed to Zia Trust Inc., as custodian for Paul Kinzelman IRA #964770. In 2016, the Zia Trust conveyed the property via quitclaim deed to Paul Kinzelman Living Trust. In 2018, Kinzelman submitted a claim to Stewart based on a purported title defect predating Pensco’s purchase of the property. Stewart denied the claim and Kinzelman sued Stewart for breach of contract.
Stewart moved for summary judgment, arguing Kinzelman was not an insured under the policy and could not pursue a claim; and regardless, the conveyance by quitclaim deed terminated coverage under the policy. Kinzelman filed an amended complaint, reasserting his breach of contract claim and asserting a new claim for fraud. The lower court granted Stewart’s motion for summary judgment, holding that coverage under the policy issued to Pensco Pension Services terminated when the property was conveyed in November 2005. Kinzelman moved for reconsideration, which the court denied. Kinzelman then appealed.
The appellate court affirmed in part and reversed in part the lower court’s decision, agreeing with the lower court that coverage terminated before Kinzelman made his claim, but did not agree that was a proper basis for summary judgment on Kinzelman’s fraud claim.
The court addressed the breach of contract claim by stating, “As relevant here, the policy provided that Pensco, as the named insured, would maintain coverage under the policy ‘only so long as the insured retains an estate or interest in the land, … or only so long as the insured shall have liability by reason of covenants of warranty made by the insured in any transfer or conveyance of the estate or interest.’ It is undisputed that, in 2005, Pensco conveyed Lot 54 to Zia Trust by quitclaim deed. When it did, Pensco retained no estate or interest in Lot 54 and made no warranties to Zia Trust. Thus, according to the policy’s terms, Pensco’s coverage terminated in 2005 when Lot 54 was conveyed to Zia Trust by quitclaim deed. Summary judgment accordingly was warranted on Kinzelman’s breach of contract claim.”
Kinzelman tried to counter this by arguing Lot 54 was transferred to Zia Trust by operation of law. The court found this argument to fail for several reasons. First, it was made for the first time in Kinzelman’s reply brief. The court held that even if the issue were timely raised, it provided no basis for reversal because of the lack of accompanying record and legal support.
“In support of his contention that Lot 54 was transferred to Zia Trust by operation of law, Kinzelman asserts, as a factual matter, that the quitclaim deed from Pensco to Zia Trust was not a purchase because Zia Trust did not give Pensco any remuneration or compensation for consideration and, as a legal matter, that the transfer was no different than when the assets and liabilities of one company are assumed by another company by operation of law. Kinzelman, however, cites no record evidence in support of his factual assertions and no authority in support of his legal contentions. Our case law has long provided that where a party fails to cite any portion of the record to support its factual assertions, this court need not consider the party’s argument. Further, this court will not consider propositions that are unsupported by citation to authority, and where a party cites no authority to support an argument, we need not review the issue. In short, we reject Kinzelman’s argument that Lot 54 was transferred to Zia Trust by operation of law.”
Kinzelman also argued the policy was ambiguous concerning when Stewart’s liability under the policy terminated.
“Kinzelman cites the absence both of a definition of ‘coverage’ and of a provision stating whether the policy is an ‘occurrence’ or a ‘claims-made’ policy,” the court stated. “This, Kinzelman contends, makes the policy ambiguous and creates a question of law, not fact, and it is for a court, not a jury, to resolve any such ambiguities. Furthermore, the absence of a definition or particular provision in a policy does not, as Kinzelman suggests, necessarily render a policy ambiguous. In sum, Kinzelman’s arguments regarding policy ambiguity do not alter our conclusion that summary judgment on his breach of contract claim was warranted.”
In reversing the lower court’s decision regarding the fraud claim, the court stated, “Stewart Title sought summary judgment on Kinzelman’s original complaint, relying in part on the absence of a contractual relationship between it and Kinzelman. The district court nonetheless granted summary judgment on Kinzelman’s amended complaint, thereby including Kinzelman’s newly asserted fraud claim in the judgment. As justification, the district court cited the termination of coverage under the policy—i.e., the absence of a contractual relationship between Stewart Title and Kinzelman. A contractual relationship, however, is not necessarily an element of fraud. Moreover, in this case, it does not appear that Kinzelman’s particular fraud claim depends on a contractual relationship between the parties. Stewart Title’s motion for summary judgment, having relied on the absence of such a relationship, thus failed to make out a prima facie showing of entitlement to summary judgment on fraud.
“More fundamentally, given that Kinzelman’s amended complaint adding the fraud claim was filed after Stewart Title’s motion for summary judgment, the motion necessarily did not address the fraud claim. It thus was error for the district court to grant summary judgment as to this claim. We accordingly reverse the grant of summary judgment on Kinzelman’s fraud claim.”