Title Insurance Law Journal

Conveyance News

• Legal Title not Required to Seek Quiet Title: Cazaubon v. Blossomgame
• Ninth Circuit Applies Title vs. Lien Theory of Deeds of Trust: Estrada v. Specialized Loan Servicing, LLC
• Incorporation by Reference Doctrine Saves Lien From Being Declared Ineligible for Foreclosure: Frost Bank v. Kelley
• Life Tenant of Mineral Estate has no Right to Extract or Receive Royalties; Statute of Limitations on Reformation of Deed Starts When Deed Recorded: Phoenix Capital Group Holdings, LLC v. Woods
• Red Flags Deny BFP Status to Lenders Under Federal Criminal Forfeiture Law; Hard Money Lenders not Exempt From BFP Rules; Equitable Subrogation Denied: United States v. Meiri

Title Insurance

• Schedule B Exceptions Narrowly Construed; Insured Parcel Deemed Landlocked Even if Insured Owns Contiguous Parcel Adjacent to Public Road: In re security Title Guarantee Corporation of Baltimore
• Sons Buy Condo With Mother’s Money, Evict Her, Then Claim Statute of Limitations Bars Her Claim to Recover Property; Constructive Notice Only Applies to Prospective Purchasers: Burkhart v. Burkhart

Escrow Matters

• Buyer is Third Party Beneficiary of Agreement Between Escrow and Seller: Yamaguchi v. Title Guaranty Escrow Services, Inc.

Title Insurance

• Fence and Gate Erected to Prevent Theft Not “Improvements” to a “Right-of-Way for Roadway Purposes”: Diamond K. Investments, Inc.
• Bankruptcy Trustee Actions Not Intended to Confer a Windfall on the Bankruptcy Estate: Johnson v. New Day Financial, LLC
• United States Enjoined From Blocking Use of Roads by Non-tribal Members Over Reservation Land: United States of America v. Town of Lac Du Flambeau

Escrow Matters

• EB-5 Investors Might Be Third-party Beneficiaries of Escrow Agreement; Escrow Not Necessarily Liable for Diversion of Funds: Dou v. TD Bank
• Escrow has Fiduciary Duty to Depositors of Funds Even if Depositors do not Have Contract With Escrow: Kim v. DP Capital LLC

Conveyance News

• Unrecorded Deed Properly Delivered Even Though It Sat in Title Company’s Warehouse for Decades: In re Malnar Estate
• Tennessee’s Anti-lapse Statute: In re Estate of Toni Harris
• Transfer by Holder of Bare Legal Title Not Fraudulent Conveyance: Brekelmans v. McLoughlin
• Centerline Presumption Shows Parcels Were Contiguous for Purposes of Implied Easement by Necessity: Endeavor Group, LLC v. Kongsberg Power Products Systems I, LLC

Title Insurance

• Bonafide Purchaser/Mortgagee Defense Applies to Forged Instruments: 5201 Washington Investors LLC v. EquityBuild, Inc.
• Lis Pendens Does Not Slander Title: 6701 Minnehaham LLC v. Tountas
• Owner Entitled to Equitable Easement Over Driveway: Garcia v. Ewais
• Failure to Tender Purchase Price Not Fatal to Specific Performance Claim But Fatal to Bona Fide Purchaser Argument: Harman v. 105 Partners LLC
• Policy Exception Valid Even If It Does Not List Correct Name of Excepted Document: High Definition Homes, LLC v. Stewart Title Guaranty Co.
• Connecticut Court Follows Broad Chain of Title Theory: Marie v. White
• Knowledge of Loan Application Does not Defeat Seniority of Lien: S. Bank v. Fassett

Escrow Matters

• Real Estate Agent Not Liable for Funds Lost in Wire Fraud: Ford v. Ritter
• Receiving Bank Not Liable In Case Involving Fraudulent Wire Instructions: Title, Inc. v. U.S. Bancorp

Conveyance News

• Adverse Possessor Not Entitled to Notice of Sheriff’s Sale: Irons v. Lin
• Lender Cannot Foreclose Where Deed of Trust Only Describes Part of Property: S. Bank, N.A., v. Estate of Bradley
• Title Company Not In Privity With True Owner In Fraudulent Sale: Tek Grubu etc. v. CoreTitle LLC

• Bush Nielsen, Long-time Editor of Journal, Passes Baton to Ryan Squire

Title Insurance

• Unrecorded Code Violations Do Not Make Title Unmarketable: Atallah v. Fidelity National Title Insurance Company
• Prendergast Formula Is Not The Sole Method For Calculating Loss Under Title Policy In Texas: Regal Center LLC v. Fidelity National Title Insurance Company
• Insured Waives Attorney Client Privilege When Seeking Fees Against Insurer: Byers v. Superior Court
• If Improved, Property Should Be Valued As Improved: Jha v. Chicago Title Insurance Company

Conveyance News

• A Survey Does Not Speak For Itself—Surveyor Must Testify To Establish Boundary Line: Macy v. Eason
• Transfer Of Property From Corporation To Trust Constitutes Change In Ownership For Tax Purposes: Prang v. Los Angeles County Assessment Appeals Board
• No Misappropriation Or Conversion Of Intangible Rights Such As Right Of Redemption Under Tennessee Law: Family Trust Services LLC v. Green Wise Homes LLC
• Fraudulent Transfer Found Under Texas Law: In re Strange
• Merger Doctrine Bars Creation Of Easement: English v. Barnett
• Merger Doctrine Does Not Bar Creation Of Easement: Reynold Venture Group IX, LLC v. Summit Plaza Shopping Center, LLC
• District Court Discusses Unsettled Question Of Constructive Notice Of Bankruptcy Discharge Orders: Escamilla v. Dyck-O’Neal, Inc.
• Recording Of Deed Starts Statute Of Limitations: Katz v. Katz

Title Insurance

• Overholtzer Does Not Preclude Highest and Best Use in Valuation: Tait v. Commonwealth Land Title Ins. Co.
• Access Coverage Not Satisfied by Permissive Travel: Coolbeth v. Connecticut Attorneys Title Ins. Co.
• Testimony Needed on Whether Accurate Survey Would Disclose Underground Gas Pipeline: MKA Exchange Powell, LLC v. First American Title Ins. Co.
• Insurer Diligently Cleared Title By Settling Lawsuit: Nagra v. First American Title Ins. Co.

Escrow Matters

• Escrowee Disclosed Claimed Fraud Issue Through Title Commitment: Moldovan v. Long
• Closer Not Required To Hire Sign Language Interpreter For Deaf Seller: Burnett v. Title Professionals Group Ltd.
• Wire Transfer Fraud Negligence Claim Against Bank Survives: Approved Mortgage Corp. v. Truist Bank

Conveyance News

• Title Voided 28 Years Later Due to Forged Deed: McKenzie v. Boodoo

Title Insurance

• Title Clearance Does Not Require Lawsuit; Possession Exception Negates Duty to Defend Adverse Possession Claim: Main Street Ltd. Partners v. Commonwealth Land Title Ins. Co.
• Insurance Lawsuit Stayed Until Road Status Decided: Munden v. Stewart Title Guar. Co.
• Ohio Court Affirms That Policy Arbitration Provision Not Enforceable Because “Not Usual”: Fucci v. Bowser
• No Mechanic Lien Coverage Under Covered Risks 10 and 12: NorthMarq Finance, LLC v. Fidelity Nat’l Title Ins. Co.

Escrow Matters

• Trustee of Deed of Trust Still Ensnarled in Borrower Action: Carpenter v. Fawcett
• Recent Fed Reserve Rule Sets Check 21 Fraud Loss Rules: 63rd & Morgan Currency Exchange, Inc. v. Citibank, N.A.
• Wire Transfer Fraud Warnings Do Not Automatically Exonerate: Lanahan v. Regions Bank
• Lawsuit on Texas Escrow and Purchase Sent to New York: Sommery Lot 2 LP v. Sommery Round Rock TX, LLC

Conveyance News

• Title Not Made Good By Offer of Insurance: 771 Allison Court LLC v. Sirianni

Escrow Matters

• Prior Lawsuit Did Not Preclude Action Against Escrowee in Same Sale: Ebbeler v. WFG Nat’l Title Co. of Washington, LLC
• Escrowee Had No Duty To Send Building Code Report To Buyers: Decuir v. West Coast Escrow
• Texas Closer Must Tell Seller If Its Own Attorney Is Qualified to Serve as Exchange Intermediary: In re Chris Pettit & Associates, P.C
• Liquidated Damages in Holdback Escrow Not Enforceable: Schmuelian v. Bichoupan

Agent Focus

• Agent Liability For Wire Transfer Fraud May Depend On Safeguards: Cengiz v. Huron Title Co.

Title Insurance

• Owner’s Affidavit “No Encumbrance” Statement Includes Assessments Not Yet Due: DJL AZ Investments LLC v. Chicago Title Ins. Co.
• Insurer Proved Up Policy, And That It Does Not Cover Dam Repairs: Boyd v. Fidelity Nat’l Title Ins. Co.
• Texas Bad Faith Claim Began Running on Date of Claim Payment: Regal Center LLC v. Fidelity Nat’l Title Ins. Co.
• Insurer’s Knowledge of Zoning Code Action Did Not Invoke Zoning Violation Notice Coverage: Sachtleben v. Alliant Nat’l Title Ins. Co.
• Puerto Rican Practices Cause Another Policy Limits Loss: MCLP Asset Company, Inc. v. Stewart Title Guar. Co.

Title Insurance

• Providence Rhode Island Development Rights Policy Coverage Saga Ending: IDC Properties, Inc. v. Chicago Title Ins. Co.
• CLTA 100.13 Endorsement Does Not Give Post-Policy HOA Lien Coverage: Wells Fargo Bank, N.A. as Trustee v. Commonwealth Land Title Ins. Co.
• Owner Must Repay Insurer That Paid His Taxes to Protect His Lender: Sherwood v. Old Republic Nat’l Title Ins. Co.
• Title Expert Excluded Because Disclosure Was Very Tardy and a Switcheroo: Holman-Farrar Holdings, LLC v. Old Republic Nat’l Title Ins. Co.

Escrow Matters

• Closing Statement Trumps Loan Agreement As a Disbursement Instruction to Escrowee: Cottonwood Development Corp. v. Longhorn Title Co.
• New York Requires Delivery to Third Party to Form an Escrow: In re Odonata Ltd.
• Escrowee Did Not Violate Laws by Closing Loan With Onerous Terms: Cary v. First American Title Ins. Co. Lenders Advantage
• Missouri Court Has Jurisdiction Over Maryland Residents in Wire Fraud Action: Fidelity Nat’l Title Ins. Co. v. APM Management Service’s, LLC
• Excessive Notary Fee Class Action Suit Trimmed But Continues: Seplow v. ClosingPro, Inc.

Agent Focus

• Pro Forma Did Not Make Agent Liable For Causing Proposed Transaction to Happen: Johnston v. Flying S Title & Escrow, Inc.
• New Jersey Says That Mobile Notaries and Abstractors are Title Agent Employees: Your Hometown Title, LLC v. New Jersey Dep’t of Labor and Workforce Development

Title Insurance

• Policy Does Not Insure Ability to Later Divide and Build on Insured Parcels: Kiritsis v. Stewart Title Guar. Co.
• Street Address Does Not Cause Policy to Insure Lien on Parcel Not Mortgaged: Deutsche Bank Nat’l Trust Co. v. Stewart Title Ins. Co.
• Federal Judge Lines Up With Nevada Supreme Court in Homeowner Assessment Case: HSBC Bank USA N.A. v. Chicago Title Ins. Co.

Agent Focus

• Court in Agency Employment Case Applies New Federal Rule to Strike Expert Testimony: Cleaver v. Transnation Title & Escrow, Inc.
• Court Dismisses Title Agent Suit Against FedEx For Promised Discount: Metropolitan Title Agency, Inc. v. Federal Express Corp.

Escrow Matters

• Claims Survive Against Trustee on Deed of Trust: Carpenter v. Fawcett
• Cyberattack Warrants Extension of Closing Date Set By Court Order: In re Strudel Holdings LLC
• No TILA Rescission on Purchase Loan and No Claims Against Closer: Cabrera v. Nazor
• Agent Gets Judgment Against Guarantor for Loan Paid Off to Protect Insured: Parsa v. Weststar Title, LLC
• Hawaii Refuses to Dismiss Claims Against Escrow Company Brought By Lender To Be Paid from Escrow: Wolf v. Heis
• Escrowee Owes No Duty to Person Claiming Sale Proceeds: Lyons v. Birmingham Law Office, LLC

Title Insurance and Escrow

• Insurer-Escrowee Not Liable For Second Parcel Buyers Thought They Would Receive: Christensen v. First American Title Co.

Title Insurance

• Insurer Gets Judgment Against Borrower on Note, But Not for Indemnification: Chicago Title Ins. Co. v. Valembrun
• Court Dismisses Insurer’s Parent Company From Coverage Lawsuit: S. Bank, N.A. v. Fidelity National Title Group, Inc.
• Forgery Claim Barred by Statute of Limitations: D’Angelo v. JP Morgan Chase Bank
• Very Tardy Disclosure of Expert Reports Okay Because They Are Important: Holman-Farrar Holdings, LLC v. Old Republic Nat’l Title Ins. Co.

Agent Focus

• Competing Owner Cannot Sue Title Agent For Agreeing to Insure Title: Crehan v. McGuire

Escrow Matters

• Covid Rule Overturns Default Judgment Against Escrowee But Court Does Not Make Judgment Creditor Return Garnished Money: Big Bell 21, LLC v. Title Alliance Elite Agency, LLC
• Wire Fraud Victim Keeps Claims About Sending Bank’s Post-Wire Conduct: Pirata P.S.C. v. Bank of America
• Filing of Lawsuit Discussed in Escrow Agreement Was Not a Condition to Release of the Money: 1754 Weeks Ave LLC v. Brewster

Conveyance News

• Survey and Title Insurance Policy Impart Inquiry Notice of Unrecorded Easement: JMMJ Development, LLC v. Town of Greenport

Title Insurance

• Title Insurance Commitment Makes Title Unmarketable as a Matter of Law: JhLandfall Trust LLC v. Fidelity Nat’l Title Ins. Co.
• Insurer Has Duty to Defend Lender Insured in Suit Accusing it of Conspiring with Fraudster: Sharestates Investments, LLC v. WFG Nat’l Title Ins. Co.

Conveyance News

• Hard Money Lender Not Held to Lower Standard in Establishing Bona Fide Encumbrancer Status: Cathay Bank v. Bonilla

RESPA Alert

• Hard Money Lender Not Held to Lower Standard in Establishing Bona Fide Encumbrancer Status: Bezek v. First Nat’l Bank of Pennsylvania

Escrow Matters

• Presumption From Acknowledgment That Signatures Are Genuine Is Overcome by Facts: Prakelt v. Reform Physicians
• Unit Owners Have Voice in Enforcing Condominium Lien Release Agreement: Fidelity Nat’l Title Ins. Co. v. Arcon Tenant Improvement Contractors
• Replacement Mortgage Doctrine Used to Prevent Junior Lienor’s Windfall: Capital Bank, N.A. v. Cornerstone Capital, LLC
• Escrow Suit Fails Because Escrowee Performed Its Instructions: McGraw v. Kim  
• Bank’s Lawyer Not Liable to Borrower under TILA For Issuing Inflated Payoff Letter: Formica v. Parke Bancorp, Inc.
• Ironclad Release Shuts Down Escrow Lawsuit: 1125 Morris Avenue Realty LLC, v. Title Issues Agency LLC

Title Insurance

• Insureds Agreed To Take Title Subject to Expense of Completing House, Negating Coverage for Recorded Violation Notice: Jha v. Chicago Title Ins. Co.
• No First Party Bad Faith Against Title Insurer in Maryland, But Common Law Claim Survives For Now: Fidelity Nat’l Title Ins. Co. v. Perkins
• Encroaching Fence Does Not Invoke Homeowner’s Coverage for Someone’s Right to Limit the Use of the Land: Braud v. First American Title Ins. Co.

Agent Focus

• Insurer Says North Carolina Agent Breached Contract by Giving Closings to Attorney Not on Approved List: First Nat’l Title Ins. Co. v. Buccaneer Title, LLC

Escrow Matters

• Forum for Wire Transfer Fraud Action Not Set by Loan Agreement: Astone v. Global Mortgage Group, LLC
• Escrowed Money Is In Trust and May Not Be Garnished: Philips North America, LLC v. KPI Healthcare, Inc.
• Deal Broker May Sue Escrowee For False Statements Although He Was Not a Party to the Escrow: Cadu Medical, LLC v. James Worldwide, Inc
• Escrow Mishandling Becomes Claim of Aiding and Abetting Securities Fraud: Securities and Exchange Commission v. Aaron-Cain McKnight