FIDELITY NATIONAL TITLE INSURANCE COMPANY, Intervenor/Appellant/Cross Appellee, v. OSBORN III PARTNERS LLC, et al., Defendants/Appellees/Cross-Appellants., 250 Ariz. 615

Summary

HOLDINGS: [1]-Because case law permitting insureds defended under a reservation of rights to settle independently without breaching the duty of cooperation was not limited to the liability insurance context but also applied to title insurance, the superior court did not err in upholding a settlement that the title insurer stipulated was reasonable, not fraudulent or collusive, and made with appropriate notice; [2]-An exclusion in the title insurance policy for liens or other defects created or suffered by the insured was applicable to mechanics' liens that arose because of insufficient funds when the construction lender cut off funding because the exclusion did not require misconduct by the insured; [3]-The insurer was entitled to summary judgment on a bad-faith claim because its reliance on the exclusion to contest coverage was fairly debatable as a matter of law and ultimately correct.