Hon Realty Corp. v. First American Title Insurance , 291 F. App'x 951 ( 2008 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 07-15844 September 4, 2008
Non-Argument Calendar THOMAS K. KAHN
________________________ CLERK
D. C. Docket No. 07-20494-CV-KMM
HON REALTY CORP.,
a Florida corporation,
Plaintiff-Appellant,
versus
FIRST AMERICAN TITLE INSURANCE CO.,
a California corporation,
Defendant-Appellee.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(September 4, 2008)
Before TJOFLAT, ANDERSON and BLACK, Circuit Judges.
PER CURIAM:
Plaintiff-appellant Hon Realty Corp. (“Hon Realty”) appeals from the grant
of defendant’s motion for summary judgment and the denial of its cross-motion for
summary judgment in the instant declaratory judgment action arising out of a title
insurance policy appellant purchased from defendant-appellee First American
Title Insurance Co. (“First American”). At issue on appeal is whether the term
“public records” used in an applicable exclusion term of the insurance contract
includes public records that were not filed with the “Official Records” of Florida,
pursuant to Fla. Stat. § 695.11,1 the state’s recording statute for encumbrances and
liens against real property. For the following reasons, we conclude that the
contractual term “public records” includes only those records filed under the
state’s recording statute to obtain constructive notice of a particular encumbrance
or lien pursuant to Fla. Stat. § 695.11. Accordingly, we affirm the judgment of the
district court.
1
This statutory provision reads as follows:
All instruments which are authorized or required to be recorded in the
office of the clerk of the circuit court of any county in the State of Florida, and
which are to be recorded in the “Official Records” as provided for under s.
28.222, and which are filed for recording on or after the effective date of this act,
shall be deemed to have been officially accepted by the said officer, and officially
recorded, at the time she or he affixed thereon the consecutive official register
numbers required under s. 28.222, and at such time shall be notice to all persons.
The sequence of such official numbers shall determine the priority of recordation.
An instrument bearing the lower number in the then-current series of numbers
shall have priority over any instrument bearing a higher number in the same
series.
Fla. Stat. Ann. § 695.11 (West 2000).
2
The facts are straightforward and undisputed. Hon Realty purchased a
property, against which the City of Miami had an encumbrance because of the
prior landowner’s violations of several city ordinances. First American warranted
title on the property as of the closing of the property, the effective date of the title
insurance contract. The enforcement order for the encumbrance was issued prior
to the purchase of the property—and, importantly, prior to the effective date of the
title insurance—but the order was not recorded under Florida’s recording statute,
Fla. Stat. § 695.11, with the Miami-Dade County clerk of court until two weeks
after Hon Realty closed on the property and after the effective date of the
insurance policy. The district court determined—and the parties do not dispute on
appeal—that the title insurance policy would warrant the title against (thus
insuring against) said encumbrance, but only if the enforcement order with respect
to the encumbrance “ha[d] been recorded in the public records at Date of Policy.”
Because the enforcement order was available in the City’s public records but was
not recorded in Miami-Dade’s statutory “Official Records” until after Hon Realty
recorded the warranty deed on the property, we must decide whether the insurance
contract’s provision that would cover encumbrances “recorded in the public
records” by the date of the policy would include the City’s public records or only
the “Official Records” described in the state’s recording statute.
3
We review de novo the district court’s grant of summary judgment. Burton
v. Tampa Hous. Auth., 271 F.3d 1274, 1276-77 (11th Cir. 2001). Summary
judgment is appropriate if there is no genuine issue as to any material fact and the
moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56;
Celotex v. Catrett, 477 U.S. 317, 323-24, 106 S. Ct. 2548, 2553 (1986). The
parties agree that this case presents only a question of law requiring the Court to
interpret the parties’ title insurance contract under Florida law. Flintkote Co. v.
Dravo Corp., 678 F.2d 942, 945 (11th Cir. 1982) (recognizing that courts sitting in
diversity apply the substantive law of the forum); see State Farm Fire & Cas. Co.
v. Metro. Dade County, 639 So. 2d 63, 65 (Fla. Dist. Ct. App. 1994) (stating that
contract construction is a question of law).
Florida law construes insurance policy exclusions narrowly, and any
ambiguity in the contract should be resolved in favor of coverage and construed
against the drafter. State Farm Fire & Cas. Co., 639 So. 2d at 65. However,
“where the language of a policy is clear and unambiguous on its face, the policy
must be given full effect.” Am. Motorists Ins. Co. v. Farrey’s Wholesale
Hardware Co., Inc., 507 So. 2d 642, 645 (Fla. Dist. Ct. App. 1987).
We conclude that the policy is clear and unambiguous on its face and
resolves the issue presented. The policy itself defines “public records” as follows:
4
“records established under state statutes at Date of Policy for the purpose of
imparting constructive notice of matters related to real property to purchasers for
value and without knowledge.” District Court Order at 4 (emphasis added). It is
clear that the “public records” definition contemplated only the inclusion of those
records filed under a state recording statute and not those general public records
that may be available from, for example, a public records request with the state or
a local municipality.
Notably, the enforcement order of the encumbrance at issue here
specifically contemplated that the City’s order be recorded with the county in
order to be recorded as a lien against the property, which evinces the fact that the
purported record of the enforcement order itself was not effective as an
encumbrance to subsequent purchasers for value without knowledge prior to
recording under Fla. Stat. § 695.11. See also Fla. Stat. Ann. § 162.09(3) (West
2000) (providing same). If the order itself was not effective against Hon Realty
until its recording under Fla. Stat. § 695.11, the order cannot be reasonably
considered a “public record” within the meaning of the contract.
Appellant argues that the record of the enforcement order was itself created
under the City’s authority granted by state statute permitting it to enforce local
ordinances and is therefore a record “established under [a] state statute[ ]” that
5
provides notice with respect to real property. Appellant’s argument is without
merit. The statute granting the City the authority to enforce its ordinances through
encumbrances has nothing to do with a record filed under a statute “for the
purpose of imparting constructive notice of matters related to real property . . . .”
The purpose of Chapter 162 of the Florida Statutes, relied upon by Appellant, is to
provide a mechanism for enforcing local ordinances and not a mechanism for
imparting constructive notice of matters related to real property. Moreover, Fla.
Stat. § 162.09(3) expressly contemplates that a “certified copy of an order
imposing a fine, or a fine plus repair costs, may be recorded in the public records”
in order to effect a lien under the state’s recording statute.
For the foregoing reasons, we conclude that the judgment of the district
court is due to be
AFFIRMED.2
2
Appellee’s request for oral argument is denied.
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