Insurer who provided title insurance policy was required to defend encroachment claim but not other claims concerning an alleged decrease in the value of the plaintiff's property.

[2011] O.J. No. 3364d

2011 ONSC 4269

Ontario Superior Court of Justice

R.D. Cornell J.

July 21, 2011

The defendant insureds brought a motion seeking a declaration that the third party, their insurer, was obligated under a title insurance policy to defend all of the claims that had been brought by the plaintiff.

The plaintiff and defendants own adjoining waterfront properties in Ontario. The plaintiff owned her property since 1969. The defendants purchased their property in 2003. When the defendants purchased the property they purchased a title insurance policy from the insurer.

In 2008, the plaintiff commenced a claim alleging that the defendants’ cottage and propane tanks encroached on her property and that the defendants had removed trees from the boundary line, placed backfill around the cottage on the plaintiff’s property and created a side lot adjoining the plaintiff’s land. The plaintiff claimed that her privacy had been adversely affected and that the value of her property had been substantially reduced.

The Court found that the insurer was required to defend the cottage encroachment claim, while the defendants were required to defend the uncovered claims relating to the propane tanks, the backfill, the removal of trees, and the side yard.