1036-00003 · Ridgemark Development Partners · Title Insurance

title-insurance-tender-letter.docx DOCUMENT Litigation

12 / 12 ← ✕

CALDERWOOD & HARKNESS LLP Attorneys at Law

1725 K Street NW, Suite 1100 Washington, DC 20006 Telephone: (202) 555-4800 Facsimile: (202) 555-4801 www.calderwoodharkness.com

August 6, 2021

VIA Sundial Data Systems AND ELECTRONIC MAIL (ohatch@meridiantitle.com)

Owen R. Hatch, Esq. Senior Claims Counsel Meridian Title Underwriters, Inc. 4800 Semoran Boulevard, Suite 220 Orlando, FL 32822

Re: Tender of Defense Under Owner's Title Insurance Policy No. MTU-2016-FL-089312

Insured: Fairwater Real Estate Investment Trust

Property: Fairwater Sanford Logistics Center, 4250 Commerce Park Boulevard, Sanford, FL 32771 (Seminole County, Florida)

Claim: Ridgemark Development Partners LLC v. Fairwater Real Estate Investment Trust, Case No. 2021-CA-002748-18-W, Circuit Court of the Eighteenth Judicial Circuit in and for Seminole County, Florida

Dear Mr. Hatch:

I. Introduction and Purpose of This Letter

This firm represents Fairwater Real Estate Investment Trust ("Fairwater" or "FREIT"), a Maryland-organized, publicly traded real estate investment trust (NYSE: FWTR), headquartered at 1400 Waverly Park Drive, Suite 600, Bethesda, MD 20814. We write to you in your capacity as Senior Claims Counsel for Meridian Title Underwriters, Inc. ("Meridian") to formally tender the defense of the above-referenced declaratory judgment action to Meridian under Owner's Title Insurance Policy No. MTU-2016-FL-089312 (the "Policy"), which was issued to Fairwater in connection with its acquisition of the real property located at 4250 Commerce Park Boulevard, Sanford, FL 32771, Seminole County, Florida (the "Property") on October 7, 2016.

The Policy was issued with a face amount of Forty-Seven Million Three Hundred Thousand Dollars ($47,300,000.00), equal to the full purchase price paid by Fairwater for the Property. As set forth in greater detail below, the pending declaratory judgment action directly implicates the coverage afforded by the Policy. Fairwater hereby requests that Meridian (a) immediately assume the defense of this action, including the payment of all attorneys' fees, expert fees, costs, and expenses incurred in connection with such defense, both past and prospective; and (b) indemnify Fairwater against any loss, damage, or diminution in value of the insured estate resulting from an adverse determination in this action, up to the full Policy limit.

This letter sets forth the factual background underlying the claim, the nature of the pending litigation, the basis for coverage under the Policy, and the specific demands Fairwater makes upon Meridian. We respectfully request that Meridian treat this matter with the urgency it warrants, given the litigation deadlines and the magnitude of the exposure at issue.

II. The Insured Property and the Policy

Fairwater acquired the Property on October 7, 2016, from Sunbelt Distribution Centers, Inc., a Florida corporation, by Special Warranty Deed recorded in Official Records Book 6312, Page 0974, of the Public Records of Seminole County, Florida. The total purchase price was Forty-Seven Million Three Hundred Thousand Dollars ($47,300,000.00). The Property consists of approximately 42.7 acres of improved industrial real property commonly known as the Fairwater Sanford Logistics Center, which comprises a 614,000-square-foot Class-A cross-dock distribution facility, together with associated truck courts, parking areas, and stormwater management infrastructure.

In connection with the acquisition, Tidewater Abstract & Title, LLC ("Tidewater"), located at 315 West First Street, Sanford, FL 32771, acted as the title agent and issued Title Commitment No. TWA-2016-09821 (the "Title Commitment"), dated September 12, 2016, committing to insure Fairwater's fee simple title to the Property subject to certain enumerated exceptions set forth in Schedule B-II of the Title Commitment. Critically, the Title Commitment did not list, and did not except from coverage, a 60-foot-wide non-exclusive ingress/egress and utility easement originally recorded on June 22, 1998, in Official Records Book 4517, Page 1283, of the Public Records of Seminole County, Florida (the "Cross-Parcel Easement"). The Cross-Parcel Easement, which is described in greater detail in Section III below, purportedly encumbers a corridor running north-to-south across the eastern boundary of the Property.

Based upon the Title Commitment and the absence of the Cross-Parcel Easement from the schedule of exceptions therein, Meridian issued Owner's Title Insurance Policy No. MTU-2016-FL-089312 to Fairwater, effective as of October 7, 2016. The Policy likewise omitted the Cross-Parcel Easement from the schedule of exceptions set forth in Schedule B, thereby affording Fairwater full coverage against any loss or damage arising from the existence of any undisclosed easement encumbering the Property. A complete copy of the Policy is enclosed herewith as Enclosure C, and a copy of the Title Commitment is enclosed as Enclosure D.

Fairwater's acquisition of the Property was financed in part by a Twenty-Eight Million Four Hundred Thousand Dollar ($28,400,000.00) term loan from Kensington Capital Markets, LLC (the "Kensington Loan"), secured by a first-priority mortgage on the Property recorded on October 7, 2016, in Official Records Book 6312, Page 0988, of the Public Records of Seminole County, Florida. The existence of the Kensington Loan underscores the significance of the Policy coverage, as any encumbrance on Fairwater's title to the Property may trigger cross-default or impairment provisions under the loan documents.

Since the date of its acquisition, Fairwater has leased the Property to a single tenant, Condor Supply Chain Solutions, Inc. ("Condor"), under a twelve-year triple-net (NNN) lease executed contemporaneously with the closing on October 7, 2016, with a lease term running from October 2016 through September 2028 (the "Condor Lease"). Annual base rent under the Condor Lease is Two Million Three Hundred Eighty-Six Thousand Four Hundred Sixty Dollars ($2,386,460.00), which equates to approximately $3.89 per rentable square foot. The Condor Lease is a material component of Fairwater's portfolio cash flow and was a primary consideration in Fairwater's underwriting and acquisition of the Property.

As of January 2021, the Property was appraised at Fifty-One Million Eight Hundred Thousand Dollars ($51,800,000.00) by Lakebridge Valuation Group, LLC, reflecting the continued strength of the central Florida logistics market and the quality of the Condor tenancy. The current appraised value further underscores the magnitude of the potential loss that Fairwater faces in the event of an adverse determination in the pending litigation.

III. Background — The Cross-Parcel Easement and the 2014 Replat

To provide Meridian with a full understanding of the factual predicate for this tender, the following is a summary of the history of the Cross-Parcel Easement and the subsequent replat that Fairwater contends extinguished it.

A. Creation of the Cross-Parcel Easement (1998)

The Cross-Parcel Easement was originally created by express grant contained in a Special Warranty Deed executed by Thurmond Industrial Holdings, Inc. ("Thurmond Industrial"), as grantor, and recorded on June 22, 1998, in Official Records Book 4517, Page 1283, of the Public Records of Seminole County, Florida. The grantee of the easement was Sunbelt Distribution Centers, Inc. ("Sunbelt"), which at the time was the owner of the northern parcel — that is, the parcel that subsequently became the Fairwater Property. The easement was granted for the benefit of the southern parcel, a 16.3-acre tract identified as Seminole County Parcel ID 25-20-30-500-0030-0000 (the "Southern Parcel"), which was then owned by Thurmond Industrial and was the dominant estate.

The Cross-Parcel Easement was described in the Special Warranty Deed as a non-exclusive easement for ingress, egress, and utility purposes, 60 feet in width, running generally in a north-to-south direction across the eastern boundary of the northern parcel (the servient estate) to connect the Southern Parcel to Commerce Park Boulevard, a public road providing access to State Road 46 and Interstate 4. The easement corridor was intended to provide the Southern Parcel — which lacked direct frontage on any improved public roadway — with vehicular and utility access suitable for industrial and commercial uses.

B. Thurmond Family Common Ownership (2012–2014)

Based upon our review of the Seminole County public records, it appears that both the northern parcel (servient estate) and the Southern Parcel (dominant estate) came under common ownership within the Thurmond family during the period from approximately 2012 to 2014. Specifically, records indicate that Thurmond Industrial transferred the Southern Parcel to Roland P. Thurmond, individually, in 2010, and that Roland P. Thurmond subsequently acquired an interest in the northern parcel (through a related entity) in or about 2012. This period of common ownership is significant because, as a matter of Florida law, an easement may be extinguished by merger when the dominant and servient estates come into unified ownership. See Lassiter v. Kaufman, 581 So. 2d 147, 148 (Fla. 5th DCA 1991); Condrey v. Greenbaum, 131 So. 3d 807, 809 (Fla. 4th DCA 2014). Fairwater has asserted the doctrine of merger as one of its affirmative defenses in the pending action.

C. The 2014 Replat

On September 15, 2014, Seminole County recorded the Commerce Park Boulevard Phase II Replat (the "Replat") in Plat Book 78, Pages 44 through 46, of the Public Records of Seminole County, Florida. The Replat was a comprehensive reconfiguration of the Commerce Park Boulevard industrial subdivision, encompassing both the northern parcel and the Southern Parcel, among other lots. The Replat reconfigured lot lines, dedicated new public rights-of-way, modified drainage easements, and included the following express language:

"All private easements shown on the prior plat are hereby vacated except as otherwise noted herein."

The Replat did not specifically note or reserve the Cross-Parcel Easement. Fairwater's position — and the primary defense asserted in the pending action — is that the Cross-Parcel Easement was encompassed within the class of private easements vacated by the Replat and was therefore extinguished as a matter of law as of September 15, 2014, which was more than two years before Fairwater's acquisition of the Property. This position is consistent with established Florida precedent holding that a valid replat, duly recorded and approved by the governing authority, operates to vacate all prior plat easements not expressly preserved. See Sunshine Villas Homeowners Ass'n v. Beaumont Savings Bank, 117 So. 3d 1167, 1170 (Fla. 5th DCA 2013); Fla. Stat. § 177.101(1).

Whether or not the Cross-Parcel Easement was in fact extinguished by the Replat is the central issue in the pending action. Regardless of the ultimate resolution of that question, the claim implicates the coverage afforded by the Policy, as discussed in Section VI below.

IV. The Declaratory Judgment Action

On July 19, 2021, Ridgemark Development Partners LLC ("Ridgemark"), a Florida limited liability company managed by Hector J. Vilanova and with its principal office at 920 Altamonte Drive, Suite 210, Altamonte Springs, FL 32701, filed a Complaint for Declaratory Judgment in the Circuit Court of the Eighteenth Judicial Circuit in and for Seminole County, Florida. The action has been assigned Case No. 2021-CA-002748-18-W and is pending before the Honorable Judge Eleanor V. Cassin. A copy of the Complaint is enclosed herewith as Enclosure A.

Ridgemark is the current owner of the Southern Parcel, having acquired the 16.3-acre undeveloped tract on March 8, 2019, from the Estate of Roland P. Thurmond for a purchase price of Two Million One Hundred Fifty Thousand Dollars ($2,150,000.00). Since its acquisition, Ridgemark has been pursuing development approvals from Seminole County for a planned 96-unit light-industrial flex-space development to be known as "Ridgemark Commerce Village." Ridgemark asserts that it requires the use of the Cross-Parcel Easement across Fairwater's Property to reach Commerce Park Boulevard because the Southern Parcel's only other frontage is an unpaved county right-of-way known as Lakemont Trail, which Ridgemark contends is inadequate for the commercial truck traffic that will be generated by the proposed development.

The Complaint seeks the following declaratory relief:

(a) A judicial declaration that the Cross-Parcel Easement, as originally recorded on June 22, 1998, in Official Records Book 4517, Page 1283, of the Public Records of Seminole County, Florida, was not extinguished by the Commerce Park Boulevard Phase II Replat recorded on September 15, 2014, in Plat Book 78, Pages 44–46, of the Public Records of Seminole County, Florida;

(b) A judicial declaration that the Cross-Parcel Easement is a covenant running with the land that inures to the benefit of Ridgemark as successor-in-interest to the dominant estate (the Southern Parcel); and

(c) A judicial declaration that Fairwater, as owner of the servient estate, must permit Ridgemark's use of the 60-foot-wide easement corridor for vehicular ingress and egress and utility access to serve the planned Ridgemark Commerce Village development, including without limitation the construction and maintenance of a paved access road, underground utilities, and related infrastructure within the easement corridor.

Ridgemark is represented by Marco D. Castellon, Esq. (Florida Bar No. 0653117) of Castellon Foley & Ruiz LLP, 228 South Orange Avenue, Suite 1400, Orlando, FL 32801.

If the court grants the relief sought by Ridgemark, Fairwater's Property will be burdened by a perpetual, non-exclusive easement that was not disclosed in the Policy or the Title Commitment. The impact of such a determination on the value, utility, and marketability of the Property would be substantial, as discussed in Section VII below.

V. Fairwater's Answer and Defenses

On August 30, 2021, Fairwater, through this firm and Florida local counsel Brenda Hargrove, Esq. (Florida Bar No. 0987214) of Hargrove & Liddell, P.A., 501 East Church Street, Suite 300, Orlando, FL 32801, filed its Answer and Affirmative Defenses in the pending action. A copy of the Answer and Affirmative Defenses is enclosed herewith as Enclosure B.

In the Answer, Fairwater denies each material allegation of the Complaint and specifically denies that the Cross-Parcel Easement survived the 2014 Replat, that the easement is enforceable against the Property, or that Ridgemark is entitled to any of the declaratory relief it seeks. In addition, the Answer asserts the following four affirmative defenses:

(i) Extinguishment by Replat. Fairwater asserts that the Cross-Parcel Easement was extinguished by the Commerce Park Boulevard Phase II Replat recorded on September 15, 2014, in Plat Book 78, Pages 44–46, of the Public Records of Seminole County, Florida, which expressly vacated all private easements shown on the prior plat except as otherwise noted — and the Cross-Parcel Easement was not otherwise noted or reserved.

(ii) Estoppel and Laches. Fairwater asserts that Ridgemark's claim is barred by the doctrines of estoppel and laches because Ridgemark's predecessor-in-interest — and, subsequently, Ridgemark itself — took no action to assert, preserve, or enforce the Cross-Parcel Easement for more than six years following the recording of the Replat. During that time, Fairwater acquired the Property in good faith, invested substantial capital in the Property, and entered into the Condor Lease and the Kensington Loan, all in reliance on the absence of the easement from the public records and the title insurance coverage.

(iii) Merger. Fairwater asserts that the Cross-Parcel Easement was extinguished by merger during the period from approximately 2012 to 2014, when the dominant and servient estates were under common Thurmond family ownership, as described in Section III.B above.

(iv) Failure to State a Cause of Action. Fairwater asserts that the Complaint fails to state a cause of action upon which relief may be granted, in that it does not adequately plead facts establishing the continued existence of the Cross-Parcel Easement following the 2014 Replat.

Fairwater intends to vigorously defend this action and believes that it has meritorious defenses. However, the existence and pendency of the litigation — and the possibility, however remote Fairwater believes it to be, of an adverse determination — Squarely implicate Meridian's obligations under the Policy, as set forth below.

VI. Basis for Tender — Coverage Under the Policy

Fairwater's tender of defense rests on the clear and unambiguous terms of the Policy and the well-settled law governing an insurer's duty to defend and indemnify under an owner's title insurance policy. The following sets forth the basis for coverage.

A. The Action Challenges Title to the Insured Property

The Ridgemark declaratory judgment action directly challenges Fairwater's title to the insured Property. Ridgemark seeks a judicial declaration that the Property is burdened by a perpetual, non-exclusive 60-foot-wide ingress/egress and utility easement — the Cross-Parcel Easement — that would encumber a substantial corridor across the eastern portion of the Property. An adverse determination — that is, a finding that the Cross-Parcel Easement was not extinguished by the 2014 Replat and that it runs with the land in favor of Ridgemark — would constitute a defect in or encumbrance upon Fairwater's title to the insured Property within the meaning of the Policy.

B. The Cross-Parcel Easement Was Not Excepted from Coverage

The Cross-Parcel Easement does not appear as an exception in Schedule B of the Policy. Likewise, it was not listed as a Schedule B-II exception in the underlying Title Commitment No. TWA-2016-09821 issued by Tidewater. The absence of the Cross-Parcel Easement from the schedule of exceptions means that the Policy affirmatively insures Fairwater against loss or damage arising from the existence of such an easement encumbering the Property. Had the Cross-Parcel Easement been disclosed as an exception, Fairwater would have had the opportunity to address the issue prior to closing — whether by obtaining a release or extinguishment of the easement, negotiating a purchase price reduction, or declining to proceed with the acquisition altogether.

C. The Policy Obligates Meridian to Defend and Indemnify

Under the standard form of the ALTA Owner's Policy, which governs the Policy at issue, Meridian has assumed two distinct but related obligations:

First, the Policy obligates Meridian to defend the insured, at Meridian's expense, against any action or proceeding founded upon a claim of a defect in, lien on, or encumbrance upon the title to the insured property, to the extent that such claim is covered by the Policy. The duty to defend is triggered when the allegations in the complaint, if taken as true, would give rise to a covered claim. See Chicago Title Ins. Co. v. Bethesda Softworks, LLC, 195 So. 3d 1156, 1158 (Fla. 4th DCA 2016); Marlowe Assurance v. Nat'l Union Fire Ins. Co., 695 So. 2d 475, 477 (Fla. 3d DCA 1997). Here, the Ridgemark Complaint on its face alleges the existence of an undisclosed easement encumbering the insured Property — precisely the type of claim that the Policy was designed to cover.

Second, the Policy obligates Meridian to indemnify Fairwater against any loss or damage sustained by reason of a defect in or encumbrance upon the title to the insured property, up to the Policy limit. If the court determines that the Cross-Parcel Easement was not extinguished and remains a valid encumbrance on the Property, the resulting diminution in value of the Property, together with any consequential damages, constitutes a covered loss under the Policy.

D. No Exclusion or Exception Bars Coverage

Fairwater is aware of no exclusion, exception, or condition in the Policy that would relieve Meridian of its obligations to defend and indemnify in connection with this claim. In particular:

• The Cross-Parcel Easement is not listed in Schedule B as a permitted exception.

• Fairwater did not create, suffer, assume, or agree to the Cross-Parcel Easement. The easement was created in 1998, nearly two decades before Fairwater acquired the Property. Fairwater had no knowledge of the easement at the time of its acquisition and relied entirely on the title work performed by Tidewater and the insurance coverage provided by Meridian.

• The standard exclusions in the Policy for matters "created, suffered, assumed, or agreed to by the insured claimant" and for matters "not known to the Company, not shown by the public records, but known to the insured claimant" are inapplicable, as Fairwater neither knew of nor participated in the creation of the Cross-Parcel Easement.

• The claim does not arise from any governmental exercise of police power, eminent domain, or regulatory action, and therefore the standard governmental regulation exclusion is inapplicable.

E. Fairwater's Reliance on the Policy

Fairwater relied in good faith on the absence of the Cross-Parcel Easement from Schedule B-II of the Title Commitment and the Policy in completing its $47,300,000 acquisition of the Property. The purpose of title insurance is precisely to protect the insured against claims of the type asserted by Ridgemark. Fairwater's tender is made in accordance with the express terms of the Policy, and Meridian's obligations are clear.

VII. Demands Upon Meridian

A. Assumption of Defense

Fairwater hereby demands that Meridian immediately assume the defense of Ridgemark Development Partners LLC v. Fairwater Real Estate Investment Trust, Case No. 2021-CA-002748-18-W, in the Circuit Court of the Eighteenth Judicial Circuit in and for Seminole County, Florida. This demand encompasses the full scope of Meridian's duty to defend under the Policy, including without limitation the payment of all attorneys' fees, expert witness fees, deposition costs, document production costs, court costs, and all other expenses incurred in connection with the defense of this action, both past and prospective.

To date, Fairwater has retained this firm, Calderwood & Harkness LLP, to defend the action, together with Florida local counsel Brenda Hargrove, Esq. of Hargrove & Liddell, P.A. Calderwood & Harkness LLP's standard hourly rates are as follows:

Fairwater requests reimbursement of all attorneys' fees and costs incurred from the date of the filing of the Complaint (July 19, 2021) forward, including all fees and costs incurred in the preparation of the Answer and Affirmative Defenses and all fees and costs incurred in the preparation of this tender of defense. Fairwater will provide Meridian with detailed invoices and time records upon request.

Should Meridian elect to appoint its own counsel to defend the action, Fairwater requests that Meridian do so promptly and in consultation with Fairwater, and that any such counsel be reasonably acceptable to Fairwater. Fairwater reserves the right to retain independent counsel at Meridian's expense if a conflict of interest arises or if Meridian's appointed counsel is not reasonably acceptable to Fairwater.

B. Indemnification. Fairwater hereby demands that Meridian indemnify Fairwater against any and all loss, damage, or diminution in value of the insured Property resulting from an adverse determination in this action, up to the full Policy limit of Forty-Seven Million Three Hundred Thousand Dollars ($47,300,000.00).

The imposition of a perpetual, non-exclusive 60-foot-wide ingress/egress and utility easement across the eastern portion of the Property would materially impair the value and utility of the Fairwater Sanford Logistics Center. Among other consequences, such an encumbrance could:

• Interfere with the existing truck court configuration and operational efficiency of the 614,000-square-foot distribution facility, potentially impairing Condor Supply Chain Solutions' use and enjoyment of the leased premises under the Condor Lease;

• Trigger a breach or default under the Condor Lease, resulting in potential lease termination, rent abatement claims, or tenant improvement reimbursement obligations to Condor;

• Trigger a cross-default or impairment-of-collateral event under the Kensington Capital Markets mortgage, potentially accelerating the outstanding $28,400,000 term loan balance;

• Diminish the marketability and resale value of the Property, which was most recently appraised at $51,800,000; and

• Impair the overall portfolio value and credit metrics of Fairwater, a publicly traded REIT that reports the Property as a material asset in its periodic filings with the Securities and Exchange Commission.

Fairwater will provide Meridian with additional documentation supporting the extent of its potential losses as the litigation progresses, including appraisals, engineering assessments, and expert analyses as appropriate.

C. Preservation of Rights

Fairwater expressly reserves all rights and remedies under the Policy, at law, and in equity, including without limitation the following:

(a) All rights to recover defense costs and indemnification from Meridian under the terms of the Policy;

(b) All claims against Meridian for breach of the Policy, including any claim for bad faith denial or delay in the event that Meridian fails to honor this tender;

(c) All claims against Tidewater Abstract & Title, LLC for any errors or omissions in the preparation of Title Commitment No. TWA-2016-09821, including without limitation any failure to identify the Cross-Parcel Easement in the title search and any failure to disclose the Cross-Parcel Easement as an exception in Schedule B-II of the Title Commitment;

(d) All claims for consequential damages, including but not limited to any impact on the Condor Lease, the Kensington Loan, Fairwater's portfolio value, and Fairwater's reputation in the capital markets; and

(e) All other rights and remedies available to Fairwater under applicable law, including but not limited to the right to seek damages pursuant to Florida Statutes § 624.155 in the event of any bad faith failure to settle or defend a claim.

This tender of defense shall not be construed as a waiver of any rights, claims, or defenses that Fairwater may have against Meridian, Tidewater, or any other party. Fairwater's participation in the defense of the Ridgemark action pending Meridian's assumption of the defense shall not be construed as a waiver of Fairwater's right to recover all costs and expenses incurred in such defense.

VIII. Request for Prompt Response

Given the pending litigation deadlines and the magnitude of the exposure at issue, Fairwater respectfully requests that Meridian respond to this tender promptly. Specifically, Fairwater requests:

1. That Meridian acknowledge receipt of this tender of defense in writing within ten (10) business days of the date of this letter — that is, no later than August 20, 2021;

2. That Meridian provide a formal coverage determination, accepting or denying the tender of defense and indemnification, within thirty (30) calendar days of the date of this letter — that is, no later than September 5, 2021; and

3. That in the event Meridian requires additional information or documentation to complete its coverage evaluation, Meridian identify such requirements promptly so that Fairwater can respond in a timely manner.

All correspondence regarding this tender, the coverage determination, and the underlying claim should be directed to:

Francesca Morano, Esq. Calderwood & Harkness LLP 1725 K Street NW, Suite 1100 Washington, DC 20006 Telephone: (202) 555-4800 Facsimile: (202) 555-4801

Email: fmorano@calderwoodharkness.com

With a copy to:

Denise M. Whitford, Esq. General Counsel Fairwater Real Estate Investment Trust 1400 Waverly Park Drive, Suite 600 Bethesda, MD 20814 Telephone: (301) 555-2200

Email: dwhitford@fairwaterreit.com

Fairwater expects Meridian to fulfill its contractual obligations under the Policy and looks forward to Meridian's prompt and favorable response to this tender. Should Meridian have any questions regarding the facts or circumstances described in this letter, please do not hesitate to contact the undersigned directly.

IX. Enclosures

The following documents are enclosed herewith for Meridian's review:

Enclosure A: Complaint for Declaratory Judgment, Ridgemark Development Partners LLC v. Fairwater Real Estate Investment Trust, Case No. 2021-CA-002748-18-W, Circuit Court of the Eighteenth Judicial Circuit in and for Seminole County, Florida (filed July 19, 2021)

Enclosure B: Answer and Affirmative Defenses of Defendant Fairwater Real Estate Investment Trust, Case No. 2021-CA-002748-18-W (filed August 30, 2021)

Enclosure C: Copy of Owner's Title Insurance Policy No. MTU-2016-FL-089312, issued by Meridian Title Underwriters, Inc. to Fairwater Real Estate Investment Trust, effective October 7, 2016

Enclosure D: Copy of Title Commitment No. TWA-2016-09821, issued by Tidewater Abstract & Title, LLC, dated September 12, 2016

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Francesca Morano Partner 1725 K Street NW, Suite 1100 Washington, DC 20006 Telephone: (202) 555-4800

Email: fmorano@calderwoodharkness.com

cc (via email and U.S. Mail):

Denise M. Whitford, Esq., General Counsel, Fairwater Real Estate Investment Trust, 1400 Waverly Park Drive, Suite 600, Bethesda, MD 20814

Gerald K. Sung, SVP, Asset Management, Fairwater Real Estate Investment Trust, 1400 Waverly Park Drive, Suite 600, Bethesda, MD 20814

Samuel Eklund, Esq., Billing Partner, Calderwood & Harkness LLP, 1725 K Street NW, Suite 1100, Washington, DC 20006

Jeffrey Park, Esq., Lead Associate, Calderwood & Harkness LLP, 1725 K Street NW, Suite 1100, Washington, DC 20006

Brenda Hargrove, Esq., Hargrove & Liddell, P.A., 501 East Church Street, Suite 300, Orlando, FL 32801

Timekeeper	Rate
Partners	$895/hour
Associates	$525/hour
Paralegals	$295/hour

CALDERWOOD & HARKNESS LLP Attorneys at Law
1725 K Street NW, Suite 1100 Washington, DC 20006 Telephone: (202) 555-4800 Facsimile: (202) 555-4801 www.calderwoodharkness.com
August 6, 2021
VIA Sundial Data Systems AND ELECTRONIC MAIL (ohatch@meridiantitle.com)
Owen R. Hatch, Esq. Senior Claims Counsel Meridian Title Underwriters, Inc. 4800 Semoran Boulevard, Suite 220 Orlando, FL 32822
Re: Tender of Defense Under Owner's Title Insurance Policy No. MTU-2016-FL-089312
Insured: Fairwater Real Estate Investment Trust
Property: Fairwater Sanford Logistics Center, 4250 Commerce Park Boulevard, Sanford, FL 32771 (Seminole County, Florida)
Claim: Ridgemark Development Partners LLC v. Fairwater Real Estate Investment Trust, Case No. 2021-CA-002748-18-W, Circuit Court of the Eighteenth Judicial Circuit in and for Seminole County, Florida
Dear Mr. Hatch:
I. Introduction and Purpose of This Letter
This firm represents Fairwater Real Estate Investment Trust ("Fairwater" or "FREIT"), a Maryland-organized, publicly traded real estate investment trust (NYSE: FWTR), headquartered at 1400 Waverly Park Drive, Suite 600, Bethesda, MD 20814. We write to you in your capacity as Senior Claims Counsel for Meridian Title Underwriters, Inc. ("Meridian") to formally tender the defense of the above-referenced declaratory judgment action to Meridian under Owner's Title Insurance Policy No. MTU-2016-FL-089312 (the "Policy"), which was issued to Fairwater in connection with its acquisition of the real property located at 4250 Commerce Park Boulevard, Sanford, FL 32771, Seminole County, Florida (the "Property") on October 7, 2016.
The Policy was issued with a face amount of Forty-Seven Million Three Hundred Thousand Dollars ($47,300,000.00), equal to the full purchase price paid by Fairwater for the Property. As set forth in greater detail below, the pending declaratory judgment action directly implicates the coverage afforded by the Policy. Fairwater hereby requests that Meridian (a) immediately assume the defense of this action, including the payment of all attorneys' fees, expert fees, costs, and expenses incurred in connection with such defense, both past and prospective; and (b) indemnify Fairwater against any loss, damage, or diminution in value of the insured estate resulting from an adverse determination in this action, up to the full Policy limit.
This letter sets forth the factual background underlying the claim, the nature of the pending litigation, the basis for coverage under the Policy, and the specific demands Fairwater makes upon Meridian. We respectfully request that Meridian treat this matter with the urgency it warrants, given the litigation deadlines and the magnitude of the exposure at issue.
II. The Insured Property and the Policy
Fairwater acquired the Property on October 7, 2016, from Sunbelt Distribution Centers, Inc., a Florida corporation, by Special Warranty Deed recorded in Official Records Book 6312, Page 0974, of the Public Records of Seminole County, Florida. The total purchase price was Forty-Seven Million Three Hundred Thousand Dollars ($47,300,000.00). The Property consists of approximately 42.7 acres of improved industrial real property commonly known as the Fairwater Sanford Logistics Center, which comprises a 614,000-square-foot Class-A cross-dock distribution facility, together with associated truck courts, parking areas, and stormwater management infrastructure.
In connection with the acquisition, Tidewater Abstract & Title, LLC ("Tidewater"), located at 315 West First Street, Sanford, FL 32771, acted as the title agent and issued Title Commitment No. TWA-2016-09821 (the "Title Commitment"), dated September 12, 2016, committing to insure Fairwater's fee simple title to the Property subject to certain enumerated exceptions set forth in Schedule B-II of the Title Commitment. Critically, the Title Commitment did not list, and did not except from coverage, a 60-foot-wide non-exclusive ingress/egress and utility easement originally recorded on June 22, 1998, in Official Records Book 4517, Page 1283, of the Public Records of Seminole County, Florida (the "Cross-Parcel Easement"). The Cross-Parcel Easement, which is described in greater detail in Section III below, purportedly encumbers a corridor running north-to-south across the eastern boundary of the Property.
Based upon the Title Commitment and the absence of the Cross-Parcel Easement from the schedule of exceptions therein, Meridian issued Owner's Title Insurance Policy No. MTU-2016-FL-089312 to Fairwater, effective as of October 7, 2016. The Policy likewise omitted the Cross-Parcel Easement from the schedule of exceptions set forth in Schedule B, thereby affording Fairwater full coverage against any loss or damage arising from the existence of any undisclosed easement encumbering the Property. A complete copy of the Policy is enclosed herewith as Enclosure C, and a copy of the Title Commitment is enclosed as Enclosure D.
Fairwater's acquisition of the Property was financed in part by a Twenty-Eight Million Four Hundred Thousand Dollar ($28,400,000.00) term loan from Kensington Capital Markets, LLC (the "Kensington Loan"), secured by a first-priority mortgage on the Property recorded on October 7, 2016, in Official Records Book 6312, Page 0988, of the Public Records of Seminole County, Florida. The existence of the Kensington Loan underscores the significance of the Policy coverage, as any encumbrance on Fairwater's title to the Property may trigger cross-default or impairment provisions under the loan documents.
Since the date of its acquisition, Fairwater has leased the Property to a single tenant, Condor Supply Chain Solutions, Inc. ("Condor"), under a twelve-year triple-net (NNN) lease executed contemporaneously with the closing on October 7, 2016, with a lease term running from October 2016 through September 2028 (the "Condor Lease"). Annual base rent under the Condor Lease is Two Million Three Hundred Eighty-Six Thousand Four Hundred Sixty Dollars ($2,386,460.00), which equates to approximately $3.89 per rentable square foot. The Condor Lease is a material component of Fairwater's portfolio cash flow and was a primary consideration in Fairwater's underwriting and acquisition of the Property.
As of January 2021, the Property was appraised at Fifty-One Million Eight Hundred Thousand Dollars ($51,800,000.00) by Lakebridge Valuation Group, LLC, reflecting the continued strength of the central Florida logistics market and the quality of the Condor tenancy. The current appraised value further underscores the magnitude of the potential loss that Fairwater faces in the event of an adverse determination in the pending litigation.
III. Background — The Cross-Parcel Easement and the 2014 Replat
To provide Meridian with a full understanding of the factual predicate for this tender, the following is a summary of the history of the Cross-Parcel Easement and the subsequent replat that Fairwater contends extinguished it.
A. Creation of the Cross-Parcel Easement (1998)
The Cross-Parcel Easement was originally created by express grant contained in a Special Warranty Deed executed by Thurmond Industrial Holdings, Inc. ("Thurmond Industrial"), as grantor, and recorded on June 22, 1998, in Official Records Book 4517, Page 1283, of the Public Records of Seminole County, Florida. The grantee of the easement was Sunbelt Distribution Centers, Inc. ("Sunbelt"), which at the time was the owner of the northern parcel — that is, the parcel that subsequently became the Fairwater Property. The easement was granted for the benefit of the southern parcel, a 16.3-acre tract identified as Seminole County Parcel ID 25-20-30-500-0030-0000 (the "Southern Parcel"), which was then owned by Thurmond Industrial and was the dominant estate.
The Cross-Parcel Easement was described in the Special Warranty Deed as a non-exclusive easement for ingress, egress, and utility purposes, 60 feet in width, running generally in a north-to-south direction across the eastern boundary of the northern parcel (the servient estate) to connect the Southern Parcel to Commerce Park Boulevard, a public road providing access to State Road 46 and Interstate 4. The easement corridor was intended to provide the Southern Parcel — which lacked direct frontage on any improved public roadway — with vehicular and utility access suitable for industrial and commercial uses.
B. Thurmond Family Common Ownership (2012–2014)
Based upon our review of the Seminole County public records, it appears that both the northern parcel (servient estate) and the Southern Parcel (dominant estate) came under common ownership within the Thurmond family during the period from approximately 2012 to 2014. Specifically, records indicate that Thurmond Industrial transferred the Southern Parcel to Roland P. Thurmond, individually, in 2010, and that Roland P. Thurmond subsequently acquired an interest in the northern parcel (through a related entity) in or about 2012. This period of common ownership is significant because, as a matter of Florida law, an easement may be extinguished by merger when the dominant and servient estates come into unified ownership. See Lassiter v. Kaufman, 581 So. 2d 147, 148 (Fla. 5th DCA 1991); Condrey v. Greenbaum, 131 So. 3d 807, 809 (Fla. 4th DCA 2014). Fairwater has asserted the doctrine of merger as one of its affirmative defenses in the pending action.
C. The 2014 Replat
On September 15, 2014, Seminole County recorded the Commerce Park Boulevard Phase II Replat (the "Replat") in Plat Book 78, Pages 44 through 46, of the Public Records of Seminole County, Florida. The Replat was a comprehensive reconfiguration of the Commerce Park Boulevard industrial subdivision, encompassing both the northern parcel and the Southern Parcel, among other lots. The Replat reconfigured lot lines, dedicated new public rights-of-way, modified drainage easements, and included the following express language:
"All private easements shown on the prior plat are hereby vacated except as otherwise noted herein."
The Replat did not specifically note or reserve the Cross-Parcel Easement. Fairwater's position — and the primary defense asserted in the pending action — is that the Cross-Parcel Easement was encompassed within the class of private easements vacated by the Replat and was therefore extinguished as a matter of law as of September 15, 2014, which was more than two years before Fairwater's acquisition of the Property. This position is consistent with established Florida precedent holding that a valid replat, duly recorded and approved by the governing authority, operates to vacate all prior plat easements not expressly preserved. See Sunshine Villas Homeowners Ass'n v. Beaumont Savings Bank, 117 So. 3d 1167, 1170 (Fla. 5th DCA 2013); Fla. Stat. § 177.101(1).
Whether or not the Cross-Parcel Easement was in fact extinguished by the Replat is the central issue in the pending action. Regardless of the ultimate resolution of that question, the claim implicates the coverage afforded by the Policy, as discussed in Section VI below.
IV. The Declaratory Judgment Action
On July 19, 2021, Ridgemark Development Partners LLC ("Ridgemark"), a Florida limited liability company managed by Hector J. Vilanova and with its principal office at 920 Altamonte Drive, Suite 210, Altamonte Springs, FL 32701, filed a Complaint for Declaratory Judgment in the Circuit Court of the Eighteenth Judicial Circuit in and for Seminole County, Florida. The action has been assigned Case No. 2021-CA-002748-18-W and is pending before the Honorable Judge Eleanor V. Cassin. A copy of the Complaint is enclosed herewith as Enclosure A.
Ridgemark is the current owner of the Southern Parcel, having acquired the 16.3-acre undeveloped tract on March 8, 2019, from the Estate of Roland P. Thurmond for a purchase price of Two Million One Hundred Fifty Thousand Dollars ($2,150,000.00). Since its acquisition, Ridgemark has been pursuing development approvals from Seminole County for a planned 96-unit light-industrial flex-space development to be known as "Ridgemark Commerce Village." Ridgemark asserts that it requires the use of the Cross-Parcel Easement across Fairwater's Property to reach Commerce Park Boulevard because the Southern Parcel's only other frontage is an unpaved county right-of-way known as Lakemont Trail, which Ridgemark contends is inadequate for the commercial truck traffic that will be generated by the proposed development.
The Complaint seeks the following declaratory relief:
(a) A judicial declaration that the Cross-Parcel Easement, as originally recorded on June 22, 1998, in Official Records Book 4517, Page 1283, of the Public Records of Seminole County, Florida, was not extinguished by the Commerce Park Boulevard Phase II Replat recorded on September 15, 2014, in Plat Book 78, Pages 44–46, of the Public Records of Seminole County, Florida;
(b) A judicial declaration that the Cross-Parcel Easement is a covenant running with the land that inures to the benefit of Ridgemark as successor-in-interest to the dominant estate (the Southern Parcel); and
(c) A judicial declaration that Fairwater, as owner of the servient estate, must permit Ridgemark's use of the 60-foot-wide easement corridor for vehicular ingress and egress and utility access to serve the planned Ridgemark Commerce Village development, including without limitation the construction and maintenance of a paved access road, underground utilities, and related infrastructure within the easement corridor.
Ridgemark is represented by Marco D. Castellon, Esq. (Florida Bar No. 0653117) of Castellon Foley & Ruiz LLP, 228 South Orange Avenue, Suite 1400, Orlando, FL 32801.
If the court grants the relief sought by Ridgemark, Fairwater's Property will be burdened by a perpetual, non-exclusive easement that was not disclosed in the Policy or the Title Commitment. The impact of such a determination on the value, utility, and marketability of the Property would be substantial, as discussed in Section VII below.
V. Fairwater's Answer and Defenses
On August 30, 2021, Fairwater, through this firm and Florida local counsel Brenda Hargrove, Esq. (Florida Bar No. 0987214) of Hargrove & Liddell, P.A., 501 East Church Street, Suite 300, Orlando, FL 32801, filed its Answer and Affirmative Defenses in the pending action. A copy of the Answer and Affirmative Defenses is enclosed herewith as Enclosure B.
In the Answer, Fairwater denies each material allegation of the Complaint and specifically denies that the Cross-Parcel Easement survived the 2014 Replat, that the easement is enforceable against the Property, or that Ridgemark is entitled to any of the declaratory relief it seeks. In addition, the Answer asserts the following four affirmative defenses:
(i) Extinguishment by Replat. Fairwater asserts that the Cross-Parcel Easement was extinguished by the Commerce Park Boulevard Phase II Replat recorded on September 15, 2014, in Plat Book 78, Pages 44–46, of the Public Records of Seminole County, Florida, which expressly vacated all private easements shown on the prior plat except as otherwise noted — and the Cross-Parcel Easement was not otherwise noted or reserved.
(ii) Estoppel and Laches. Fairwater asserts that Ridgemark's claim is barred by the doctrines of estoppel and laches because Ridgemark's predecessor-in-interest — and, subsequently, Ridgemark itself — took no action to assert, preserve, or enforce the Cross-Parcel Easement for more than six years following the recording of the Replat. During that time, Fairwater acquired the Property in good faith, invested substantial capital in the Property, and entered into the Condor Lease and the Kensington Loan, all in reliance on the absence of the easement from the public records and the title insurance coverage.
(iii) Merger. Fairwater asserts that the Cross-Parcel Easement was extinguished by merger during the period from approximately 2012 to 2014, when the dominant and servient estates were under common Thurmond family ownership, as described in Section III.B above.
(iv) Failure to State a Cause of Action. Fairwater asserts that the Complaint fails to state a cause of action upon which relief may be granted, in that it does not adequately plead facts establishing the continued existence of the Cross-Parcel Easement following the 2014 Replat.
Fairwater intends to vigorously defend this action and believes that it has meritorious defenses. However, the existence and pendency of the litigation — and the possibility, however remote Fairwater believes it to be, of an adverse determination — Squarely implicate Meridian's obligations under the Policy, as set forth below.
VI. Basis for Tender — Coverage Under the Policy
Fairwater's tender of defense rests on the clear and unambiguous terms of the Policy and the well-settled law governing an insurer's duty to defend and indemnify under an owner's title insurance policy. The following sets forth the basis for coverage.
A. The Action Challenges Title to the Insured Property
The Ridgemark declaratory judgment action directly challenges Fairwater's title to the insured Property. Ridgemark seeks a judicial declaration that the Property is burdened by a perpetual, non-exclusive 60-foot-wide ingress/egress and utility easement — the Cross-Parcel Easement — that would encumber a substantial corridor across the eastern portion of the Property. An adverse determination — that is, a finding that the Cross-Parcel Easement was not extinguished by the 2014 Replat and that it runs with the land in favor of Ridgemark — would constitute a defect in or encumbrance upon Fairwater's title to the insured Property within the meaning of the Policy.
B. The Cross-Parcel Easement Was Not Excepted from Coverage
The Cross-Parcel Easement does not appear as an exception in Schedule B of the Policy. Likewise, it was not listed as a Schedule B-II exception in the underlying Title Commitment No. TWA-2016-09821 issued by Tidewater. The absence of the Cross-Parcel Easement from the schedule of exceptions means that the Policy affirmatively insures Fairwater against loss or damage arising from the existence of such an easement encumbering the Property. Had the Cross-Parcel Easement been disclosed as an exception, Fairwater would have had the opportunity to address the issue prior to closing — whether by obtaining a release or extinguishment of the easement, negotiating a purchase price reduction, or declining to proceed with the acquisition altogether.
C. The Policy Obligates Meridian to Defend and Indemnify
Under the standard form of the ALTA Owner's Policy, which governs the Policy at issue, Meridian has assumed two distinct but related obligations:
First, the Policy obligates Meridian to defend the insured, at Meridian's expense, against any action or proceeding founded upon a claim of a defect in, lien on, or encumbrance upon the title to the insured property, to the extent that such claim is covered by the Policy. The duty to defend is triggered when the allegations in the complaint, if taken as true, would give rise to a covered claim. See Chicago Title Ins. Co. v. Bethesda Softworks, LLC, 195 So. 3d 1156, 1158 (Fla. 4th DCA 2016); Marlowe Assurance v. Nat'l Union Fire Ins. Co., 695 So. 2d 475, 477 (Fla. 3d DCA 1997). Here, the Ridgemark Complaint on its face alleges the existence of an undisclosed easement encumbering the insured Property — precisely the type of claim that the Policy was designed to cover.
Second, the Policy obligates Meridian to indemnify Fairwater against any loss or damage sustained by reason of a defect in or encumbrance upon the title to the insured property, up to the Policy limit. If the court determines that the Cross-Parcel Easement was not extinguished and remains a valid encumbrance on the Property, the resulting diminution in value of the Property, together with any consequential damages, constitutes a covered loss under the Policy.
D. No Exclusion or Exception Bars Coverage
Fairwater is aware of no exclusion, exception, or condition in the Policy that would relieve Meridian of its obligations to defend and indemnify in connection with this claim. In particular:
• The Cross-Parcel Easement is not listed in Schedule B as a permitted exception.
• Fairwater did not create, suffer, assume, or agree to the Cross-Parcel Easement. The easement was created in 1998, nearly two decades before Fairwater acquired the Property. Fairwater had no knowledge of the easement at the time of its acquisition and relied entirely on the title work performed by Tidewater and the insurance coverage provided by Meridian.
• The standard exclusions in the Policy for matters "created, suffered, assumed, or agreed to by the insured claimant" and for matters "not known to the Company, not shown by the public records, but known to the insured claimant" are inapplicable, as Fairwater neither knew of nor participated in the creation of the Cross-Parcel Easement.
• The claim does not arise from any governmental exercise of police power, eminent domain, or regulatory action, and therefore the standard governmental regulation exclusion is inapplicable.
E. Fairwater's Reliance on the Policy
Fairwater relied in good faith on the absence of the Cross-Parcel Easement from Schedule B-II of the Title Commitment and the Policy in completing its $47,300,000 acquisition of the Property. The purpose of title insurance is precisely to protect the insured against claims of the type asserted by Ridgemark. Fairwater's tender is made in accordance with the express terms of the Policy, and Meridian's obligations are clear.
VII. Demands Upon Meridian
A. Assumption of Defense
Fairwater hereby demands that Meridian immediately assume the defense of Ridgemark Development Partners LLC v. Fairwater Real Estate Investment Trust, Case No. 2021-CA-002748-18-W, in the Circuit Court of the Eighteenth Judicial Circuit in and for Seminole County, Florida. This demand encompasses the full scope of Meridian's duty to defend under the Policy, including without limitation the payment of all attorneys' fees, expert witness fees, deposition costs, document production costs, court costs, and all other expenses incurred in connection with the defense of this action, both past and prospective.
To date, Fairwater has retained this firm, Calderwood & Harkness LLP, to defend the action, together with Florida local counsel Brenda Hargrove, Esq. of Hargrove & Liddell, P.A. Calderwood & Harkness LLP's standard hourly rates are as follows:
Fairwater requests reimbursement of all attorneys' fees and costs incurred from the date of the filing of the Complaint (July 19, 2021) forward, including all fees and costs incurred in the preparation of the Answer and Affirmative Defenses and all fees and costs incurred in the preparation of this tender of defense. Fairwater will provide Meridian with detailed invoices and time records upon request.
Should Meridian elect to appoint its own counsel to defend the action, Fairwater requests that Meridian do so promptly and in consultation with Fairwater, and that any such counsel be reasonably acceptable to Fairwater. Fairwater reserves the right to retain independent counsel at Meridian's expense if a conflict of interest arises or if Meridian's appointed counsel is not reasonably acceptable to Fairwater.
B. Indemnification. Fairwater hereby demands that Meridian indemnify Fairwater against any and all loss, damage, or diminution in value of the insured Property resulting from an adverse determination in this action, up to the full Policy limit of Forty-Seven Million Three Hundred Thousand Dollars ($47,300,000.00).
The imposition of a perpetual, non-exclusive 60-foot-wide ingress/egress and utility easement across the eastern portion of the Property would materially impair the value and utility of the Fairwater Sanford Logistics Center. Among other consequences, such an encumbrance could:
• Interfere with the existing truck court configuration and operational efficiency of the 614,000-square-foot distribution facility, potentially impairing Condor Supply Chain Solutions' use and enjoyment of the leased premises under the Condor Lease;
• Trigger a breach or default under the Condor Lease, resulting in potential lease termination, rent abatement claims, or tenant improvement reimbursement obligations to Condor;
• Trigger a cross-default or impairment-of-collateral event under the Kensington Capital Markets mortgage, potentially accelerating the outstanding $28,400,000 term loan balance;
• Diminish the marketability and resale value of the Property, which was most recently appraised at $51,800,000; and
• Impair the overall portfolio value and credit metrics of Fairwater, a publicly traded REIT that reports the Property as a material asset in its periodic filings with the Securities and Exchange Commission.
Fairwater will provide Meridian with additional documentation supporting the extent of its potential losses as the litigation progresses, including appraisals, engineering assessments, and expert analyses as appropriate.
C. Preservation of Rights
Fairwater expressly reserves all rights and remedies under the Policy, at law, and in equity, including without limitation the following:
(a) All rights to recover defense costs and indemnification from Meridian under the terms of the Policy;
(b) All claims against Meridian for breach of the Policy, including any claim for bad faith denial or delay in the event that Meridian fails to honor this tender;
(c) All claims against Tidewater Abstract & Title, LLC for any errors or omissions in the preparation of Title Commitment No. TWA-2016-09821, including without limitation any failure to identify the Cross-Parcel Easement in the title search and any failure to disclose the Cross-Parcel Easement as an exception in Schedule B-II of the Title Commitment;
(d) All claims for consequential damages, including but not limited to any impact on the Condor Lease, the Kensington Loan, Fairwater's portfolio value, and Fairwater's reputation in the capital markets; and
(e) All other rights and remedies available to Fairwater under applicable law, including but not limited to the right to seek damages pursuant to Florida Statutes § 624.155 in the event of any bad faith failure to settle or defend a claim.
This tender of defense shall not be construed as a waiver of any rights, claims, or defenses that Fairwater may have against Meridian, Tidewater, or any other party. Fairwater's participation in the defense of the Ridgemark action pending Meridian's assumption of the defense shall not be construed as a waiver of Fairwater's right to recover all costs and expenses incurred in such defense.
VIII. Request for Prompt Response
Given the pending litigation deadlines and the magnitude of the exposure at issue, Fairwater respectfully requests that Meridian respond to this tender promptly. Specifically, Fairwater requests:
1. That Meridian acknowledge receipt of this tender of defense in writing within ten (10) business days of the date of this letter — that is, no later than August 20, 2021;
2. That Meridian provide a formal coverage determination, accepting or denying the tender of defense and indemnification, within thirty (30) calendar days of the date of this letter — that is, no later than September 5, 2021; and
3. That in the event Meridian requires additional information or documentation to complete its coverage evaluation, Meridian identify such requirements promptly so that Fairwater can respond in a timely manner.
All correspondence regarding this tender, the coverage determination, and the underlying claim should be directed to:
Francesca Morano, Esq. Calderwood & Harkness LLP 1725 K Street NW, Suite 1100 Washington, DC 20006 Telephone: (202) 555-4800 Facsimile: (202) 555-4801
Email: fmorano@calderwoodharkness.com
With a copy to:
Denise M. Whitford, Esq. General Counsel Fairwater Real Estate Investment Trust 1400 Waverly Park Drive, Suite 600 Bethesda, MD 20814 Telephone: (301) 555-2200
Email: dwhitford@fairwaterreit.com
Fairwater expects Meridian to fulfill its contractual obligations under the Policy and looks forward to Meridian's prompt and favorable response to this tender. Should Meridian have any questions regarding the facts or circumstances described in this letter, please do not hesitate to contact the undersigned directly.
IX. Enclosures
The following documents are enclosed herewith for Meridian's review:
Enclosure A: Complaint for Declaratory Judgment, Ridgemark Development Partners LLC v. Fairwater Real Estate Investment Trust, Case No. 2021-CA-002748-18-W, Circuit Court of the Eighteenth Judicial Circuit in and for Seminole County, Florida (filed July 19, 2021)
Enclosure B: Answer and Affirmative Defenses of Defendant Fairwater Real Estate Investment Trust, Case No. 2021-CA-002748-18-W (filed August 30, 2021)
Enclosure C: Copy of Owner's Title Insurance Policy No. MTU-2016-FL-089312, issued by Meridian Title Underwriters, Inc. to Fairwater Real Estate Investment Trust, effective October 7, 2016
Enclosure D: Copy of Title Commitment No. TWA-2016-09821, issued by Tidewater Abstract & Title, LLC, dated September 12, 2016
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Francesca Morano Partner 1725 K Street NW, Suite 1100 Washington, DC 20006 Telephone: (202) 555-4800
Email: fmorano@calderwoodharkness.com
cc (via email and U.S. Mail):
Denise M. Whitford, Esq., General Counsel, Fairwater Real Estate Investment Trust, 1400 Waverly Park Drive, Suite 600, Bethesda, MD 20814
Gerald K. Sung, SVP, Asset Management, Fairwater Real Estate Investment Trust, 1400 Waverly Park Drive, Suite 600, Bethesda, MD 20814
Samuel Eklund, Esq., Billing Partner, Calderwood & Harkness LLP, 1725 K Street NW, Suite 1100, Washington, DC 20006
Jeffrey Park, Esq., Lead Associate, Calderwood & Harkness LLP, 1725 K Street NW, Suite 1100, Washington, DC 20006
Brenda Hargrove, Esq., Hargrove & Liddell, P.A., 501 East Church Street, Suite 300, Orlando, FL 32801
Timekeeper | Rate
Partners | $895/hour
Associates | $525/hour
Paralegals | $295/hour

CALDERWOOD & HARKNESS LLP Attorneys at Law

CALDERWOOD & HARKNESS LLP

Record

Parties

Dates

Amounts