Today, the Arizona Supreme Court issued its unanimous opinion in favor of Wilenchik & Bartness’s client. Dennis I. Wilenchik and Senior Attorney Tyler Q. Swensen argued the matter before the Ninth Circuit Court of Appeals last year in Equity Income Partners v. Chicago Title Ins. Co., which certified questions in the matter to the Arizona Supreme Court. A copy of the their Opinion can be found CV-16-0162-CQ.
In the federal case, Wilenchik & Bartness was appealing to the Ninth Circuit from the Arizona District Court’s ruling granting summary judgment to the defendant, Chicago Title Insurance, on the plaintiffs’ claim that they had suffered a covered loss of more than $2.4 million because the collateral for plaintiffs’ loans were landlocked, inaccessible and essentially worthless. Despite this, in the District Court’s opinion, Chicago Title owed the plaintiffs nothing under their lenders’ title policy because they obtained possession of the collateral by making a credit bid for the full unpaid amount of their loans plus accrued interest and costs incurred. The District Court held that this credit bid constituted “full payment” of the plaintiffs’ insured mortgages and therefore the plaintiffs no longer had any covered “loss” under their policies with Chicago Title—even though title to those worthless parcels did nothing to offset the more than $2.4 million actual loss suffered by Plaintiffs.
In its briefs and at oral argument before the Ninth Circuit, W&B vigorously contested those holdings by the Arizona District Court as being contrary to the terms of the title policy and Arizona law. After oral argument, the Ninth Circuit determined that there was no Arizona appellate decision on point and therefore issued Certified Questions to the Arizona Supreme Court asking it to rule on the effect (if any) of a lender’s full-credit bid on its title insurance coverage.
Wilenchik & Bartness briefed and argued the lenders’ position to the Arizona Supreme Court, again contending that the credit bids had no effect on the coverage provided under the terms of the title policy. The Arizona Supreme Court has now agreed with those arguments and adopted and ratified the position argued by Wilenchik & Bartness in both federal and state court over the past five years. As a result, what would have been a six-figure loss for the client has now been reversed and turned into a potentially multi-million dollar victory.