Liberty National Enterprises v. Chicago Title Ins.
Both parties in this title insurance coverage dispute ‑‑ Chicago Title Insurance Company (Chicago Title) and Liberty National Enterprises, L.P. (Liberty) ‑‑ appeal from the judgment awarding Liberty $1,083,292.38 in damages against Chicago Title. Chicago Title is the insurer and Liberty is the insured entity. The court trifurcated trial of this case. The first phase of trial determined that Chicago Title had a duty to defend Liberty in a third party lawsuit relating to the insured property. The second phase of trial determined Liberty’s damages for breach of the duty to defend (breach of contract). The third phase of trial resolved Liberty’s remaining cause of action for tortious breach of the implied covenant of good faith and fair dealing. The jury found in Chicago Title’s favor on the breach of the implied covenant claim. Thus, the damages awarded in the judgment were solely those found by the court for breach of the duty to defend.
Chicago Title contends that the court erred in finding it breached the duty to defend. Liberty, for its part, contends that the court committed evidentiary and instructional errors in the phase three trial, and that it erred in ruling Liberty was not entitled to “lost opportunity†damages. We hold that Chicago Title had no duty to defend the third party lawsuit for which Liberty demanded the defense. This holding renders Liberty’s appeal moot, as explained below. We reverse the judgment against Chicago Title for $1,083,292.38 and direct the trial court to enter judgment for Chicago Title.
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