Morgan

MEMORANDUM *

Albert and Alice Morgan brought a diversity action against Chicago Title Insurance Company seeking reimbursement for legal fees incurred in defense of their title. The district court granted summary judgment to Chicago Title. We reverse and remand.

I

Under a title insurance policy, the insurance company owes the insured a “duty to defend” against adverse claims raising the possibility of coverage. Commerce & Indus. Ins. Co. v. Bank of Hawaii, 73 Haw. 322, 325-26 , 832 P.2d 733 (1992). We must look to “the language of the particular policy involved” to determine whether Rosetta Dimiceli’s adverse claim was possibly covered by the Morgans’ policy and whether Chicago Title had a duty to defend. Id. The Morgans’ policy “must be construed liberally in favor of the insured and [any] ambiguities [must be] resolved against the insurer.” Dairy Rd. Partners v. Island Ins. Co., Ltd., 92 Hawai’i 398, 412, 992 P.2d 93 (2000) (citation and internal quotation marks omitted).

There is no dispute that Dimiceli’s adverse claim to the Kauai property fell within the policy’s insuring provisions. Also, the Morgans’ April 1994 letter gave sufficient notice to trigger Chicago Title’s…