## Facts

- Plaintiffs bought a 160-acre in-holding surrounded by federal land within the Sandia Mountain Wilderness near Albuquerque, New Mexico.
- Plaintiffs obtained a title insurance policy insuring, among other risks, against “lack of a right of access to and from the land” and “unmarketability of the title.”
- The property was reached via the Piedra Lisa Trail, a U.S. Forest Service–maintained hiking and horse trail about 2.5 miles from the nearest paved road and unsuitable for vehicles.
- Plaintiffs asserted they were led to believe the property had vehicular access based on alleged statements by the prior owner and a Forest Service employee.
- Plaintiffs pursued separate litigation against the United States seeking a judicial declaration of a vehicular right-of-way; after plaintiffs sold the property, that action was dismissed as moot.
- After selling the property, plaintiffs made a claim under the title policy alleging a covered loss from the absence of vehicular access and related disputes; the insurer denied coverage.
- Plaintiffs sued the insurer for breach of contract, statutory unfair-practices claims under New Mexico law, insurance bad faith, and punitive damages; the insurer removed on diversity and moved for summary judgment.

## Issues

1. Whether a title policy insuring against “lack of a right of access” covers the absence of vehicular access when the insured has a legally enforceable non-vehicular route.
2. Whether non-vehicular-only access and associated access disputes render title “unmarketable” under the policy.
3. Whether statutory unfair-practices and bad-faith claims can survive when coverage is not owed under an unambiguous policy.

## Decision

- The court granted the insurer’s motion for summary judgment on all claims.
- The “right of access” provision was unambiguous and protected only against the total absence of a legal right of access; it did not insure a particular mode or quality of access (such as vehicular access).
- Because plaintiffs had a legal right of access via the Piedra Lisa Trail, no covered loss arose under the access provision.
- The “unmarketability of title” provision did not apply because plaintiffs’ complaints concerned practical/physical access and governmental permission issues rather than a defect in title.
- Any losses tied to governmental regulation or permission regarding vehicular access fell outside coverage under policy exclusions addressing governmental action or regulation.
- With no coverage triggered, the breach-of-contract, statutory, bad-faith, and punitive-damages claims failed as a matter of law.

## Legal Principles

- Standard title-policy “right of access” language insures the existence of a legally enforceable right of access, not vehicular access or a preferred quality or convenience of access.
- The reasonable-expectations doctrine cannot create coverage contrary to clear, unambiguous policy text.
- “Unmarketability of title” concerns defects, liens, or encumbrances affecting legal title; physical conditions, usability, or regulatory hurdles generally do not make title unmarketable under title insurance.
- An insurer does not act in bad faith by denying a claim that is not covered under an unambiguous policy; extra-contractual and statutory claims premised on a wrongful denial fail when no benefits are owed.

## Conclusion

The court held that the insureds had a legally enforceable right of access via an established trail, so the title policy did not cover the lack of vehicular access, and the asserted access limitations did not render title unmarketable; without coverage, all contract, statutory, and bad-faith claims were dismissed on summary judgment.


Riordan v. Laws. Title Ins. Corp., 393 F. Supp. 2d 1100 (D.N.M. 2005)