Opinion
CV-20-0498
10-07-2021
ROBERT BATEMAN & LESLIE BATEMAN, PLAINTIFFS, v. COMMONWEALTH LAND TITLE INSURANCE COMPANY, DEFENDANT,
Plaintiffs' Counsel: Christopher Maffuci, Esq Defendant's Counsel: James Monteleone, Esq - Glenn Israel, Esq
Plaintiffs' Counsel: Christopher Maffuci, Esq
Defendant's Counsel: James Monteleone, Esq - Glenn Israel, Esq
ORDER ON PLAINTIFFS' MOTION FOR RECONSIDERATION
JOHN O'NEIL, JR. JUSTICE
Before the Court is Plaintiff Robert Bateman and Plaintiff Leslie Bateman's ("Plaintiffs") Motion for Reconsideration of this Court's Order dated July 23rd, 2021 dismissing their complaint against Commonwealth Land Title Insurance Company ("Commonwealth") in full. For the reasons set forth herein, Plaintiffs' Motion for Reconsideration is hereby DENIED.
FACTUAL BACKGROUND
The following facts relevant to the Court's consideration of this Motion are taken directly from this Court's "Order on Defendant's Motion to Dismiss" dated July 23rd, 2021. From 1980 until early 2015, Thomas and Katherine Bateman ("Batemans") owned a parcel of property located at 18 Quaker Camp Road in Sebago, Maine ("Property"). Plaintiff Robert Bateman is the natural son of Thomas and Katherine.
In the spring of 2015, after assessing and recording a cumulative total of $56,630.12 in property tax liens on the Property, the Town of Sebago ("Town") filed a foreclosure complaint in Cumberland County Superior Court. The Town was granted summary judgment and the title to the Property was subsequently transferred from the Batemans to the Town. In the fall of 2015, the Town then sold the property to the Plaintiffs. That sale was unanimously approved by the Town's Board of Selectmen and was for a total of $300,000. Around the same time that they purchased the property, on November 3rd, 2015, the Plaintiffs obtained a title insurance policy ("Policy") from Commonwealth which contained a maximum coverage amount of $300,000.
Approximately two years after the Town had foreclosed on their property, the Batemans filed a Chapter 11 bankruptcy petition which was later converted to a Chapter 7 proceeding. During the pendency of that Petition, the appointed Chapter 7 trustee initiated an adversary proceeding ("Trustee's Complaint") against the Plaintiffs, seeking to avoid both transfers of the Property. The Trustee alleged that each transfer-from the Bateman's to the Town and from the Town to the Plaintiffs-was either preferential or fraudulent under the applicable provisions of the U.S. Bankruptcy Code and Maine law. The Trustee further alleged that they were the product of a scheme between the Town, the Plaintiffs and and the Batemans to repurchase the property, allowing the Bateman family to maintain the substantial equity it had in the Property at the time of foreclosure. At the time of the sale to the Plaintiffs, the property was worth approximately $1.8 million. The Plaintiffs bought it for a fraction of that cost, $300,000.
Once the adversary proceeding was initiated in the Bankruptcy Court, the Plaintiffs notified Commonwealth that they were facing a claim that threatened their title to the insured property and asked Commonwealth to defend them pursuant to the Policy. Commonwealth refused multiple written requests by the Plaintiffs seeking their assistance, saying that because the claims against the Plaintiffs were premised on the existence of a fraudulent conveyance or transfer, the Trustee's Complaint was excluded from the Policy's coverage provisions.
On November 16th, 2020, the Plaintiffs filed a four count complaint in the Cumberland County Superior Court against Commonwealth seeking to establish Commonwealth's Duty to Defend and indemnification for the litigation costs incurred in connection with defending, and ultimately settling, the Chapter 7 Trustee's claims. Along with claims premised on the language of the Policy, the Plaintiffs also asserted that Commonwealth violated applicable state law governing unfair claims settlements and trade practices.
On January 7th, 2021, Commonwealth filed a Motion to Dismiss the Batemans' complaint pursuant to Maine Rule of Civil Procedure ("M.R. Civ. P.") 12(b)(6), asserting that the Batemans were excluded from coverage under their respective policy because a number of the enumerated exceptions to coverage were squarely applicable to the Trustee's claims.
On July 23rd, 2021, this Court entered an order granting Commonwealth's Motion to Dismiss the Plaintiffs' complaint in full. Finding that the Batemans had "failed to state a claim upon which relief could be granted," and "viewing the facts in the light most favorable to the Plaintiffs", the Court held that the Policy's coverage exceptions were squarely applicable to the allegations set forth in the Trustee's Complaint. See M.R. Civ. P. 12(b)(6); Ramsey v. Baxter Title Co., 2012 ME 113, ¶ 6, 54 A.3d 710. Additionally, the Court held that the Plaintiffs' failed to state a claim under either Maine's Unfair Claims Settlement Practices Act or Maine's Unfair Trade Practices Act. On August 9th, 2021, the Batemans filed a Motion for Reconsideration of the Court's dismissal, which this Court now considers. The Plaintiffs' Motion does not ask that the Court reconsider its dismissal of the Plaintiffs' claims arising under the Unfair Claims Settlement Act or the Unfair Trade Practices Act.
DISCUSSION
In their Motion for Reconsideration, the Plaintiffs allege two errors by the Court. First, that the Court erred in relying too heavily on the Trustee's Complaint and accepting the Complaint's allegations as true. Second, that the Court erred in not properly considering some of the exhibits attached to the Plaintiffs' complaint.
"Motions for reconsideration of an order shall not be filed unless required to bring to the court's attention an error, omission, or new material that could not previously have been presented." M.R. Civ. P. 7(b)(5). Rule 7(b)(5) is intended to deter disappointed litigants from seeking "to reargue points that were or could have been presented to the court on the underlying motion." Shaw v. Shaw, 2003 ME 153, ¶ 8, 839 A.2d 714. The Rule gives the court "more leeway" when responding to motions that are frequently brought to relitigate fully presented and decided issues. Ten Voters of City of Biddeford v. City of Biddeford, 2003 ME 59, ¶ 11, 822 A.2d 1196.
I. Error in Considering Trustee's Complaint
The Plaintiffs first allege that the Court erred when it "relied heavily on the allegations against [the Plaintiffs] set forth in the Trustee's Complaint, and effectively treated those allegations as true." (Pl.s' Mot. Recons. 2.)
While the Court understands the Plaintiffs' disappointment with the effect of this Court's dismissal of its claims, it fails to see how it could have resolved the Defendant's Motion to Dismiss either against-or in favor of-the Plaintiffs without consideration of the Trustee's Complaint. When determining whether the Duty to Defend is triggered under an insurance policy, Maine law requires the court to look at both the underlying complaint and the language of the policy and compare them. See Barnie's Bar & Grill, Inc. v. United States Liab. Ins. Co. , 2016 ME 181, ¶ 6, 152 A.3d 613 (To determine whether an insurer is contractually obligated to defend an insured in an underlying lawsuit, Maine courts employ the "comparison test," in which they compare the allegations in the underlying complaint with the terms of the applicable insurance policy to determine whether the complaint falls within the policy's coverage.)
Here, this comparison test involves a comparison between the allegations set forth in the Trustee's Complaint and the language of the Policy issued to the Plaintiffs by Commonwealth. This comparison, does not, in any way, reach the merits of the Trustee's Complaint or come to any conclusions about whether the Plaintiffs actually engaged in a preferential or fraudulent transfer scheme. It merely places the underlying complaint and the insurance policy side by side to determine if the complaint alleges facts which entitle the Plaintiffs to coverage.
As the Court concluded in its dismissal order, A side by side comparison of the two clearly fits the Trustee's Complaint within the confines of the Policy's seventh exception to coverage. Importantly, the Policy excludes coverage regardless of whether the Trustee's allegations are true.
Accordingly, the Court finds no error in its consideration of the Trustee's Complaint to determine whether the comparison test triggers Commonwealth's Duty to Defend. The Court did not accept the allegations contained in the Trustee's Complaint as true. In accordance with Maine law, it merely compared those allegations with the language of the Policy. That was the extent of the Court's analysis.
II. Error in Failing to Rely on Other Exhibits
The Plaintiffs also allege, briefly, that the Court erred by not giving proper weight to any exhibits attached to their complaint, other than the Trustee's Complaint. Specifically, Plaintiffs allege that the Court "should have analyzed such exhibits as supportive of the sufficiency of [Plaintiffs'] Complaint. (Pl.s' Mot. Recons. 4.)
Contrary to the Plaintiffs' assertions, the Court did in fact properly analyze the attached exhibits. In fact, consistent with the inquiry this Court is charged with, it reviewed the complaint itself, the exhibits, and all other relevant objections and responses. It carefully examined the language of the Policy, the communications between the Plaintiffs and Commonwealth, the Trustee's Complaint, and every other document relevant to the Court's consideration of the Motion to Dismiss. After this proper analysis, the Court determined that all allegations in the Trustee's Complaint meet at least one of the enumerated exceptions to coverage within the Policy. Thus rendering the Plaintiffs' complaint legally insufficient.
CONCLUSION
Although the Plaintiffs' do not like the Court's ultimate conclusion, a review of the Court's decision to Dismiss the Plaintiffs complaint finds no error which preceded that decision. The Court did not improperly consider the Trustee's Complaint, or the merits of the Trustee's allegations, nor did it fail to consider other exhibits attached to the Plaintiffs' complaint. For the foregoing reasons, the Plaintiffs' Motion for Reconsideration of this Court's July 23rd, 2021 Order Dismissing the Plaintiffs' complaint is DENIED.
Entry is:
Plaintiffs Motion for Reconsideration is DENIED.
The Clerk is directed to incorporate this Order into the docket by reference pursuant to Maine Rule of Civil Procedure 79(a).