Opinion
No. 1 CA-SA 13-0107
06-04-2013
EMPIRE WEST TITLE AGENCY, L.L.C. f/k/a EMPIRE TITLE AGENCY OF ARIZONA, L.L.C., an Arizona limited liability company, Petitioner, v. THE HONORABLE DAVID M. TALAMANTE, Judge of the SUPERIOR COURT OF THE STATE OF ARIZONA, in and for the County of MARICOPA Respondent Judge, DOS LAND HOLDINGS L.L.C., an Arizona limited liability company; CHESTER & SHEIN, a professional corporation; DAVID JEMMET, a member of Grant Houston Development, L.L.C., Real Parties in Interest.
NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED
EXCEPT AS AUTHORIZED BY APPLICABLE RULES.
See Ariz. R. Supreme Court 111(c); ARCAP 28(c);
Ariz. R. Crim. P. 31.24
Maricopa County
Superior Court
No. CV2011094829
DECISION ORDER
This special action came on regularly for oral argument and conference on May 22, 2013, before Presiding Judge Patricia K. Norris and Judges Michael J. Brown and Diane M. Johnsen.
Empire West Title Agency, L.L.C. ("Empire West") and DOS Land Holdings L.L.C. ("DOS") are parties to a lawsuit over whether a purportedly abandoned easement providing access to certain real property is covered by a title insurance policy. DOS, the purchaser, sent Empire West, the title insurer, a closing instructions letter ("CIL") asking Empire West to insure title to property with a legal description that included the easement. Empire West agreed to the CIL, but issued a policy that omitted the easement from the legal description.
Empire West seeks relief from the superior court's April 4, 2013 ruling denying its motion to compel discovery of attorney-client communications to or from DOS that concern the issue of access to the property.
Empire West first contends it is entitled to communications relevant to whether DOS knew the easement was abandoned, because such knowledge could implicate a policy exclusion applying to defects "created, suffered, assumed or agreed to by the claimant." We reject this argument because there is no dispute that DOS knew of the purported abandonment of the easement.
Empire West also argues that DOS impliedly put the attorney-client communications at issue by alleging in its breach of contract claim that, in agreeing to purchase the property, "DOS relied on the Closing Instructions Description and reasonably believed that it was represented in all documents used at the closing based upon Empire's agreement to accept and comply therewith."
In response, DOS contends its claim of "reasonable belief" is based only on the CIL and does not implicate any communication with its lawyers. It argues that under State Farm Mutual Auto Insurance Co. v. Lee, 199 Ariz. 52, 13 P.3d 1169 (2000), the attorney-client privilege is not waived absent "an affirmative act of putting the privileged materials at issue."
Lee is distinguishable. The issue in that case was whether an insurer reasonably evaluated and responded to a demand for coverage. Here, on the other hand, the issue is a party's reasonable belief about a particular situation. By pleading a contract claim based on its "reasonable belief," DOS put in issue all information in its possession at the time, all of which bear on the reasonableness of its belief that Empire West agreed to provide coverage of the easement.
Accordingly,
IT IS ORDERED that, in the exercise of its discretion, the court accepts jurisdiction of the special action petition. SeeSun Health Corp v. Myers, 205 Ariz. 315, 317, ¶ 17, 2, 70 P.3d 444, 446 (App. 2003).
IT IS FURTHER ORDERED vacating the superior court's order denying Empire West's motion to compel.
IT IS FURTHER ORDERED that real parties in interest shall provide the superior court for its in camera inspection the attorney-client communications called for by Empire West's document request(s) concerning access to the subject property. After reviewing the documents and considering any redactions it deems appropriate, the superior court shall order the disclosure of those communications, if any, that are relevant to the reasonableness of DOS's expectation of coverage of the easement.
IT IS FURTHER ORDERED that the Clerk of this Court shall provide a copy of this Decision Order to the Honorable David M. Talamante, a Judge of the Superior Court, and to each party appearing herein.
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DIANE M. JOHNSEN, Judge