Triple purchased undeveloped units in the Richard Rowhouses Condominium Project in 2011. The purchase came with a known risk: a Master Deed and Michigan law required development or withdrawal of the units by March 2014, or else title would revert to the condominium association.
Triple failed to act by the 2014 deadline. Consequently, its rights to the units reverted to the association. Despite this, Triple later attempted to sell the units to third-party buyers, including Ferlito Group and PCJ Investments, without disclosing the title defect.
PCJ Investments purchased the units in 2019. In 2021, the association informed PCJ that it held title to the land and prohibited development. PCJ sued the association and Triple in state court to quiet title or recover the purchase price.
Triple sought defense coverage from First American under its owner’s title insurance policy. First American denied the claim, citing Exclusion 3(a), which excludes coverage for defects created, suffered, assumed, or agreed to by the insured.
The district court granted summary judgment to First American, concluding that the loss of title resulted from Triple’s deliberate acts. The Sixth Circuit agreed, holding that Triple suffered the reversion by failing to develop or withdraw the units, and created the conflicting claim by selling the property with full knowledge of the title defect.
The court noted that Triple had multiple opportunities to protect its interest, including developing the units, withdrawing them from the project, or voting to amend the Master Deed to reinstate the units. Triple chose none of these options.
Because the title defect arose from Triple’s own conduct and knowledge, the policy exclusion applied. The Sixth Circuit affirmed the district court’s grant of summary judgment, leaving Triple to bear the costs of defending against PCJ’s lawsuit.