Contract analysis

I. Executive Summary Meridian Title Underwriters, Inc. ("Meridian") issued a Reservation of Rights ("ROR") letter dated September 10, 2021, in response to Fairwater Real Estate Investment Trust's ("Fairwater" or "FREIT") August 6, 2021 tender of the defense of the declaratory judgment action brought by Ridgemark Development Partners LLC ("Ridgemark") in the Circuit Court of the Eighteenth Judicial Circuit in and for

II. Background A. The Fairwater Property and Acquisition Fairwater Real Estate Investment Trust is a Maryland real estate investment trust organized in 2009 that focuses on the acquisition, management, and disposition of industrial and logistics properties in the southeastern United States. Fairwater's portfolio currently includes approximately 8.2 million square feet of industrial space across Florida, Georgia, and

III. Analysis of Policy Exclusion 3(a) A. Text of Exclusion 3(a) The standard ALTA Owner's Policy of Title Insurance, upon which Meridian's Policy No. MTU-2016-FL-089312 is based, contains a section titled "Exclusions from Coverage." Exclusion 3(a), as reproduced in the Meridian policy, provides: "The following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damag

IV. Florida Law on Title Insurance Coverage Disputes A. Standard of Review for Insurer Reservations of Rights Under well-established Florida law, the provisions of a title insurance policy — like all insurance policies — are construed strictly against the insurer and liberally in favor of the insured. See Lawyers Title Ins. Corp. v. JDC (America) Corp., 52 F.3d 1575, 1580 (11th Cir. 1995) (applying Florida law); Chic

V. Potential Exposure if Easement Is Found Valid The stakes in the underlying Ridgemark declaratory judgment action are substantial. If the court declares that the Cross-Parcel Easement was not extinguished by the 2014 Replat and remains a valid and subsisting encumbrance on Fairwater's title, the consequences for Fairwater would be significant and multi-faceted. Impact on Property Operations and Tenant Relationship.

VI. Assessment of Meridian's Position A. Weaknesses in Meridian's Reservation Meridian's Reservation of Rights letter suffers from several significant weaknesses that undermine its credibility and legal sufficiency: No factual basis. The ROR does not articulate any factual theory explaining how Exclusion 3(a) applies to the circumstances of this claim. It does not allege that Fairwater created the easement, took any

VII. Recommendations Based on the foregoing analysis, we make the following recommendations: A. Demand for Full Coverage Determination We recommend that Calderwood & Harkness, on behalf of Fairwater, send a formal demand letter to Owen R. Hatch, Senior Claims Counsel, Meridian Title Underwriters, Inc., demanding a full and final coverage determination within thirty (30) days of the date of the letter. The demand lett