IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MARYLAND

OLD REPUBLIC NATIONAL TITLE *
INSURANCE COMPANY *
400 Second Ave. South *
Minneapolis, MN 55401-2499 *
*
Plaintiff, *
*
v. * Civil No.
*
*
WESTCHESTER FIRE INSURANCE *
COMPANY *
436 Walnut Street *
P.O. Box 1000 *
Philadelphia, Pennsylvania 19106 *
*
SERVE: *
*
Maryland Insurance Administration *
Resident Agent for Service of Process *
*
and *
*
EXECUTIVE TITLE AND ESCROW L.L.C. *
9500 Arena Drive *
Suite 480 *
Largo, Maryland 20774 *
*
Serve Resident Agent: *
Lawrence O. Elliott, Jr. *
9500 Arena Drive *
Suite 480 *
Largo, Maryland 20774 *
*
Defendants. *
*
*
* * * * * * * * * * * *

COMPLAINT FOR DECLARATORY JUDGMENT

Plaintiff Old Republic National Title Insurance Company (Old Republic), by its
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counsel, Ira L. Oring and Fedder and Garten Professional Association, files this Complaint
against Defendants Westchester Fire Insurance Company (Westchester) and Executive
Executive Title and Escrow L.L.C. (Executive Title), and as a cause of action states:
INTRODUCTION
1. This lawsuit involves an insurance coverage dispute relating to a Professional
Liability Policy of Insurance issued by Westchester to Executive, attached hereto as Exhibit 1
(the Policy). Old Republic seeks a declaratory judgment pursuant to 28 U.S.C. 2201-2202
and Federal Rule of Civil Procedure 57, to declare the rights and obligations of Westchester and
Executive related to the Policy.
2. Old Republic has standing to bring this action because on June 19, 2014, it filed a
lawsuit against Executive, Old Republic National Title Insurance Company v. Executive Title
and Escrow L.L.C., Civil No. 8:14-CV-01990-RWT, in the United States District Court for the
District of Maryland (the Underlying Litigation). Old Republics claims for damages in Count
I of the Amended Complaint in the Underlying Litigation, alleging negligence, are covered by
the Policy, yet Westchester has refused to provide a defense and has denied coverage to
Executive with regard to Old Republics claims in Count I.
3. The claims and allegations in the Underlying Litigation are separate and distinct
from the claims regarding insurance coverage under the Policy.
PARTIES
4. Plaintiff Old Republic is a Minnesota corporation with its principal place of
business in Minneapolis, Minnesota. Old Republic is a national title insurance underwriter
operating through authorized policy issuing agents, and authorized to conduct business in the
State of Maryland.
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5. Defendant Westchester is a Pennsylvania corporation with its principal place of
business at 436 Walnut Street, Philadelphia, Pennsylvania. Westchester is an insurance
company authorized to do business in the State of Maryland. Among other things, Westchester
is in the business of issuing professional liability policies to its insureds. Westchester is named
as a Defendant in this action because it has an interest in the interpretation of the Policy.
6. Defendant Executive Title is a Maryland liability company with its principal place
of business in Largo, Maryland. Upon information and belief, the member or members of
Executive are citizen(s) of states other than Minnesota or Pennsylvania.
7. At all times relevant hereto, Defendant Executive Title provided real estate
settlement services in Prince Georges County and elsewhere, and in one of its capacities,
operated as a title insurance agent of Old Republic.
JURISDICTION AND VENUE
8. This Court has jurisdiction over the subject matter of this case pursuant to 28
U.S.C. 1332(a). An actual controversy exists and there is complete diversity of citizenship
between the opposing parties and the amount in controversy exceeds $75,000.00, exclusive of
interest and costs.
9. Venue in this Court is appropriate under 28 U.S.C. 1391.
FACTUAL BACKGROUND
10. During the policy periods September 24, 2010 through September 24, 2014 (the
Policy Period), Westchester insured Executive Title pursuant to the terms of the Policy. The
Policy was a claims made and reported Miscellaneous Professional Liability Policy which,
subject to certain exclusions, insured Executive against Claims (as defined by the Policy) first
made and reported by Executive during the policy periods, by reason of a Wrongful Act (also
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defined by the Policy). The Policy also provided that Westchester had the right and duty to
defend Executive against any Claim.
11. Old Republic is a national title insurance underwriter. Pursuant to the terms of an
Agreement for Appointment of Policy Issuing Agent for Old Republic National Title Insurance
Company (the Agency Agreement) with Old Republic, subsequent to October 2, 2002,
Executive Title began issuing and delivering Old Republics commitments, binders, policies, and
endorsements for title insurance in connection with Executive Titles closings of real estate
transactions.
12. In the Underlying Litigation, Old Republic has alleged that on June 4, 2004,
Executive Title closed the refinance of certain real property owned by Maritime Investment
Properties, LLC (Maritime Properties), located at 2802 Solomons Island Road, Edgewater,
Anne Arundel County, Maryland (the Commercial Property), and owned by Timothy Konkus
and Elizabeth Konkus. Old Republic has alleged in the Underlying Litigation that as part of the
refinance transaction, Executive Title issued Title Insurance Commitments, on behalf of Old
Republic, to the refinance lender, Mid-Atlantic Business Finance Company (Mid-Atlantic),
committing Old Republic to issue a policy of title insurance insuring that the Mid-Atlantic loan
was to be secured by a second in priority Deed of Trust on the Commercial Property, and an
Indemnity Deed of Trust (the IDOT) secured by the Konkus residence at 13701 Piscataway
Drive, Ft. Washington, Maryland (the Residential Property), second in priority behind an
existing $258,000 Wells Fargo Deed of Trust. It was alleged in the Underlying Litigation that
the Mid-Atlantic loan was guaranteed by the Small Business Administration.
13. Old Republic alleged in the Underlying Litigation that sometime shortly after the
June 4, 2004 closing, Executive Title sent the executed Deed of Trust securing Mid-Atlantics
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loan on the Commercial Property to the Clerks Office for Anne Arundel County for recordation,
and the executed IDOT on the Residential Property to the Clerks Office for Prince Georges
County, Maryland for recordation. It further alleged that both clerks offices returned the
documents to Executive Title, indicating that insufficient funds had been provided for recording
costs. It is further alleged that upon receiving the documents back from the Clerks Offices, an
agent or employee of Executive Title attempted, without success, to obtain the additional
recording costs from Maritime Properties and/or Timothy Konkus and Elizabeth Konkus.
14. As alleged in the Amended Complaint, subsequent to failing to obtain the
additional recording costs, the original unrecorded Deed of Trust and the IDOT were negligently
forgotten about by Executive Title, and Executive Title negligently failed to take additional steps
to timely record the Mid-Atlantic Deed of Trust and the IDOT. Old Republic alleged that
Executive Title negligently failed to have processes in place to track original land record
documents in its possession to ensure original documents were appropriately recorded within a
reasonable time period, and negligently failed to supervise its employees to ensure that those
employees appropriately followed up when original land record documents were rejected for
filing.
15. The Amended Complaint in the Underlying Litigation alleges that due to
Executives negligence in failing to timely record the Deeds of Trust, in order to discharge its
obligation under the Commitments issued by Executive Title, by check dated November 7, 2013,
Old Republic provided payment to the Small Business Administration in the amount of
$472,356.87, which represented the total amount due under the Mid-Atlantic loan.
16. Old Republic made a claim against Executive Title for those damages alleged in
the Underlying Litigation during the Policy Period.
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17. Executive Title reported Old Republics claim to Westchester during the Policy
Period.
18. By letter of March 11, 2014, Westchester, through its agent The Plus Companies,
denied coverage to Executive Title for the claim that became the basis for the negligence count
in Count I of the Amended Complaint in the Underlying Litigation. Westchester asserts that
coverage is excluded due to Exclusion K, which states in relevant part that coverage is excluded
for any claim:
alleging, based upon, arising out of, or attributable to any Wrongful Act,
committed prior to the beginning of the Policy Period, if, on or before the earlier
of the effect date of this Policy or the effective date of this Policy or the effective
date of any Policy issued by the Company to which this Policy is a continuous
renewal or replacement, the Insured knew or reasonably could have foreseen that
such Wrongful Act would result in a Claim.

19. Prior to the beginning of the Policy Period, Executive did not have knowledge of
the Wrongful Act as alleged in Count I of the Amended Complaint in the Underlying
Litigation.
20. Alternatively, Executive could not have foreseen that the Wrongful Act as alleged
in Count I of the Amended Complaint in the Underlying Litigation would result in a claim.
21. In the March 11, 2014 letter, Westchester also denied coverage to Executive Title
based upon Form PF 25513 (11/08), which allegedly modified the Policy by adding an exclusion
for any claim:
alleging, based upon, arising out of, or attributable to the intentional or willful
failure to follow any escrow or closing instructions, or the intentional or willful
disregard of any escrow or closing instructions.

22. The claim as alleged in Count I of the Amended Complaint in the Underlying
Litigation did not arise out of and was not attributable to Executive Titles intentional or willful
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failure to follow any escrow or closing instructions, or the intentional or willful disregard of any
escrow or closing instructions.
23. By letter of July 29, 2014, Westchester, through counsel, denied coverage to
Executive Title for the claim set forth in Count I of the Amended Complaint in the Underlying
Litigation for the same reasons as set forth in the March 11, 2014 letter.
24. Pursuant to the terms of the Policy, Westchester is obligated to indemnify
Executive Title with regard to the claim for negligence alleged in Count I of the Amended
Complaint in the Underlying Litigation.
WHEREFORE, Old Republic National Title Insurance Company prays for relief as
follows:
A. A declaration and judgment under 28 U.S.C. 2201 that pursuant to the terms of
the Policy, Westchester is required to indemnify Executive Title with regard to the claim
for negligence alleged in Count I of the Amended Complaint in the Underlying
Litigation; and
B. Such other and further relief as this Court may deem just and equitable.



/s/
Ira L. Oring (Federal Bar No. 0733) (ilo@fedgar.com)
Fedder and Garten Professional Association
36 South Charles Street, Suite 2300
Baltimore, Maryland 21201-3177
Telephone: 410-539-2800
Fax: 410-659-0543
Attorneys for Plaintiff
Old Republic National Title Insurance Company

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