BatesCarey partners Kari Timm, Nicholas Novak, and associate Matthew Koschnitzki, obtained an Order Granting Summary Judgment in New Mexico’s Eighth Judicial District Court for Union County on behalf of Hamilton Insurance DAC (Hamilton). Hamilton’s insured, a title company, filed a third-party complaint for declaratory judgment and breach of contract against Hamilton, seeking coverage and defense against a lawsuit arising from a wire transfer theft experienced by the buyer in a real estate transaction. 

Prior to the inception of the policy period, the title company had received a preservation notice from the buyer regarding the wire transfer theft, advising it of potential legal action. After the buyer filed a complaint against the title company alleging that its failure to secure its computer network had enabled the theft, the title company provided notice under the policy. Hamilton denied coverage, citing the title company’s prior knowledge of the incident and its receipt of the buyer’s preservation notice. The title company then filed its declaratory judgment action against Hamilton, and Hamilton subsequently moved for summary judgment. 

The title company opposed Hamilton’s motion, alleging that the preservation notice was ambiguous, that it did not constitute a claim under the Hamilton policy, and that the prior knowledge exclusion did not apply. The court disagreed, finding that the title company was aware of the alleged wire transfer theft and knew, or reasonably could have foreseen, that it might become the basis of a covered matter, triggering the policy’s prior knowledge exclusion.