Title Insurance Law Journal

Escrow Matters

• Witness Closings and the Unauthorized Practice of Law: Supreme Court of Georgia Formal Advisory Opinion No. 13–1, No. S14U0705
• Trustee in Foreclosure Not Liable to Borrower: Signature Log Homes, LLC v. Fidelity Nat’l Title Co.
• When Escrowee Files Bankruptcy, Money Returned to Owner Only If It Can Be Traced: In re Dreier LLP

Agent Focus

• Agent Liable to Customer for Taxes Paid on Exchange Not Fully Deferred: Kreisers Inc. v. First Dakota Title Ltd. Partnership

Title Insurance

• Lack of Subdivision Approval Does Not Make Title Unmarketable: Security Service Federal Credit Union v. First American Title Ins. Co.
• Loss Equals Small Diminution in Value, Not Large Cost to Relocate Utility Line: Weber Estates Investments, LLC v. Chicago Title Ins. Co.
• Insured Must Get Judgment Against Insurer to Recover Statutory Attorney Fees: Triangle Holdings, II, LLC v. Stewart Title Guar. Co.
• Water Charge Exception Negates Coverage: TIMAC Realty v. G & E Tremont LLC
• No Discharge for Insured Who Took Title by Forgery: In re Wolf
• Insurer’s Defense of Insured and Settlement of Covered Dispute Bars Further Claims by Insured: C.I. Financial Corp. v. First American Title Ins. Co. of New York
• Insurer’s Reconveyance of Lien It Bought Extinguishes Debt: Lawyers Title Ins. Corp. v. Dedmore
• Insurer Not an Advisor to Seller on Terms of Deal: Fontenot v. LandAmerica Commonwealth Title of Houston, Inc.
• Retaining Wall at Street Does Not Trigger Access Coverage: 43 Park Owners Group, LLC v. Commonwealth Land Title Ins. Co.

RESPA Alert

• Freeman Does Not Bar RESPA Case Alleging Unreasonably High Premiums: White v. PNC Financial Services Group, Inc.

Conveyance News

• HOA Lien Has Priority Over First Deed of Trust in Nevada: SFR Investments Pool 1, LLC v. U.S. Bank

Title Insurance

• Diminution Appraisal May Include Assumptions, Land Not Owned, Highest and Best Use: Spalding v. Stewart Title Guar. Co.
• Defense Duty Begins Before Tender, But Trespass Not Covered: CH Properties, Inc. v. First American Title Ins. Co.
• FDIC Wins on Six Severed CPL Claims, But Loses on Eight Because Notice Given Too Late: Federal Deposit Ins. Corp. v. Attorneys’ Title Ins. Fund, Inc.
• Claim Liability Ended on Payment, Release and Endorsement Adding Exception: Chorches v. Stewart Title Guar. Co.
• Negligence Suit on Title Search Barred by Economic Loss Doctrine: Dawkins v. First American Title Co., LLC
• Lender’s Loss Due to Prior Lien is Principal, Interest and Per Diem: First Community Bank v. Commonwealth Land Title Ins. Co.

Agent Focus

• Title Agent Does Not Abstract Title in Determining Which Parcels to Insure: Cummings v. Stephens
• Federal Law Does Not “Prevent” Bank From Turning Over Internal Files on Escrow Theft: First American Title Ins. Co. v. Westbury Bank
• Time to Sue Agent for Not Paying Off Loan Does Not Begin at Closing: Bank of America, N.A. v. Chicago Title Ins. Co.

Title Insurance

• Insured ‘Assumed’ or ‘Agreed To’ Senior Liens Not Excepted; Policy Not Reformed: First American Title Ins. Co. v. Lane Powell PC
• Lender ‘Agreed To’ Take Second Lien by Its Loan Documents: Beneficial Mutual Savings Bank v. Stewart Title Guar. Co.
• Underwriting Negligence Does Not Bar Collection on Indemnity: Commonwealth Land Title Ins. Co. v. Historic Ivy Tower, LLC
• Insurer Entitled to Defend Title Rather Than Pay: DAFCO LLC v. Stewart Title Guar. Co.
• No Attorney-Client Privilege in Recoupment Suit: Feduniak v. Old Republic Nat’l Title Ins. Co.
• Statute Does Not Excuse Indemnitor From Telling the Truth: First American Title Ins. Co. v. Lyons
• Disaster Recovery Notice Does Not Encumber Title: Lemon-Pittman v. Commonwealth Land Title Ins. Co.
• Endorsement Protects Against Disclosed Access Dispute: Meadow Brook, LLP v. First American Title Ins. Co.

Agent Focus

• Attorney Agent Not Exempt From Administrative Process: Wayne B. Holstad, PLC v. Commissioner of Department of Commerce

Escrow Matters

• Escrowee Not Liable to Taxpayer for Not Paying All of His Tax Liens: Edwards v. Escrow of the West

RESPA Alert

• Practice of Law Rule Does Not Render Title Company Charges RESPA Violations: Wesolowski v. Title Source, Inc.

Conveyance News

• Equitable Subrogation Round-Up

Title Insurance

• Lender’s Knowledge of Liens May Mean It Suffered, Assumed or Agreed To Risk: First American Title Ins. Co. v. DJ Mortgage, LLC
• Loan Buyer Cannot Sue on Fraudulent Loans When No Policies Were Issued: Federal Deposit Ins. Corp. v. United General Title Ins. Co.
• No Bad Faith or Negligence Claims Based on Closing Protection Letter: Bancorp Bank v. Lawyers Title Ins. Corp.
• Insured Can Recover Attorney Fees Paid by Insurer: Dillon v. Southern Management Corp. Retirement Trust
• Loan Policy Loss Measured As of Foreclosure: First American Bank v. First American Transportation Title Ins. Co.
• Role of Title Expert Witness Explained: Fiserv Solutions, Inc. v. Endurance American Specialty Ins. Co.
• Insurer Not Liable to Loan Assignee for First Liens Excepted in Policies: Flagstar Bank, FSB v. Lawyers Title Co.
• Indemnitor Must Remove Lien to Get Money Back: Hopper v. Lawyers Title Ins. Corp.
• Policy Did Not Insure Distance or Area: Kraft v. Estate of Cooper, 263 Or.App. 420

Agent Focus

• Attorney Agent Question Sent to Mississippi Supreme Court: Mississippi Valley Title Ins. Co. v. Thompson

Escrow Matters

• Escrowee Had No Duty to Verify Lien Release: Touch Stone AZ-Central Properties, L.L.C. v. Title Management Agency of Arizona, L.L.C.

Title Insurance

• Full Credit Bid Does Not Extinguish Policy Claim; Meaning of Location Endorsement Unclear: Bank of Idaho v. First American Title Ins. Co.
• Bankruptcy Discharge and Mortgage Covenants: Stewart Title Guar. Co. v. Santa Cruz
• Transfer to Related Entity Terminates Owner’s Policy: Durbano & Garn Investment Co., LC v. First American Title Ins. Co.
• Revocable 30-Year License Is a ‘Right of Access’: Fidelity Nat’l Title Ins. Co. v. Woody Creek Ventures, LLC
• Time for Policy Suit Begins When Title is Divested: S. Bank, N.A. v. First American Title Ins. Co.
• Title Clearance Reasonable Diligence Decision Reversed: Granelli v. Chicago Title Ins. Co.
• No Loss for Setback Violation Not Enforced: Ky v. GOB Construction, Inc.

Agent Focus

• Title Search Not a Written Contract; Limitations Period Starts When Search is Delivered: Brooks v. Terry Abstract Co.
• Emails Might Imply Agency for Escrow Acts: Gondeck v. A Clear Title and Escrow Exchange, LLC
• Agent Liable for Escrow Money Theft; Bank Might Also Owe: First American Title Ins. Co. v. Eddings

Escrow Matters

• Escrowee Not Required to Warn Lenders They Have Second Lien: Edelman v. Belco Title & Escrow, LLC
• Life Insurance Policy Escrow Sucks Escrowee into Securities Litigation: Amerivest Financial, LLC v. Malouf

Title Insurance

• Loan Assignee Gets Policy Limits Despite Equivocal Evidence of Reliance on Coverage: Shamrock Bank of Florida v. First American Title Ins. Co.
• Lawsuit Pending on Policy Date Creates Statute of Limitations Conundrum: San Jacinto Z, LLC v. Stewart Title Guar. Co.
• Historic Designation Not an Encumbrance on Title and Was Assumed in Purchase Contract: McGonagle v. Stewart Title Guar. Co.
• Insurer Can Reverse Claim Acceptance: RP Family, Inc. v. Commonwealth Land Title Ins. Co.
• Buyer’s Rescission Claim Against Seller for Title Failure Not Barred by Policy Exception: Washington Temple Church of God in Christ, Inc. v. Global Properties and Associates, Inc.

Agent Focus

• E&O Carrier Must Defend Agent Accused of Facilitating Foreclosure Rescue Fraud: Cornerstone Title & Escrow, Inc. v. Evanston Ins. Co.

Escrow Matters

• Short Sale Lender Has No Claim Against Escrowee: Jafari v. F.D.I.C.

Title Insurance

• Agent’s Complicity in Flipping Fraud Triggers Closing Protection Letter: Bank of America, N.A. v. First American Title Ins. Co.
• Warning Letter Is Not Forced Removal: Johnston v. Connecticut Attorneys Title Ins. Co.
• Insurer’s Knowledge Not Imputed to Insured: S. Evangelista Development, L.L.C. v. Foundation Capital Resources, Inc.
• Pennsylvania Refi Rate Plaintiff Class Decertified: Alberton v. Commonwealth Land Title Ins. Co.
• Punitive Damages Against Title Insurer Unconstitutional: Kimble v. Land Concepts, Inc.
• Implied Easements Excluded Because Judgment Declaring Them Was Entered Post-Policy: Woodle v. Commonwealth Land Title Ins. Co.
• Exclusion 3(b) Negates Duty to Defend Insured Alleged to Have Had Knowledge of Unrecorded Lien: Fogg v. Fidelity Nat’l Title Ins. Co.

Escrow Matters

• Title Company Liable to Lender for Inaccurate Vesting on Loan Fraud Flips: Federal Deposit Ins. Corp. v. Horn
• Escrowee “Converted” Government’s Money by Not Paying Off Tax Lien: Bedrock Financial Corp. v. First American Title Co.

Title Insurance

• Loan Servicer Not an Insured and Not Entitled to a Defense; No Duty to Clear Title: S. Bank, N.A. v. Stewart Title Guar. Co.
• Some Agent Acts Covered by Insurer’s Theft Bond, But Not CPL Claims: Stewart Information Services Corp. v. Great American Ins. Co.
• Title Insurer Permitted to Prove Access to Defend Policy Lawsuit: Guenther v. Old Republic Nat’l Title Ins. Co.
• Indiana Market Conduct Study Cases Say Insurers Must Make Sure Agents Charge Correct Premiums: Robertson v. Ticor Title Ins. Co. of Florida
• Insurer Must Be Less at Fault Than the Party From Whom it Seeks Subrogation: Horn, D.D.S. v. High Point Services, Inc.
• Title Insurer Not Subject to Interstate Land Sales Act: Streambend Properties II, LLC v. Ivy Tower Minneapolis, LLC

Agent Focus

• Prior Acts Exclusion Applies to Claim Involving Two Related Closings, One Before Policy Period: American Guarantee & Liability Ins. Co. v. The Abram Law Group, LLC
• Inclusion of Title Clearing Fees in Foreclosure Judgment Does Not Bar Recoupment of Fees From Agent: Commonwealth Land Title Ins. Co. v. Miller

Escrow Matters

• Liability for Loan Fraud Measured as Loan Amount Less Property Value, Not Buy-Back Price With Penalties: JAAV Investments, LLC v. Amcap Mortgage, Ltd.
• Claim Based on Escrow Officer’s Statement About Genuineness of Signature Not Barred by Escrow Instruction Exculpatory Provision: Premium Hospitality, L.L.C. v. Astra Capital Funding
• Escrowee Did Not Interfere With Contract by Insisting on Wire Transfer: Capcor at KirbyMain, L.L.C. v. Moody Nat’l Kirby Houston S, L.L.C.

Conveyance News

• Not Enough Evidence of Intent to Include House in Mortgage: Deutsche Bank Nat’l Trust Co. v. Wilson

Title Insurance

• No Duty to Clear Title That Only Insured is Attacking: Castin, LLC v. First American Title Ins. Co.
• Title Commitment’s Failure to Except Judgments Against Owner Insured Not a Fraud: Edwards v. First American Title Ins. Co.
• Cured Defect in Mortgage Did Not Cause Business Losses: Amzak Capital Management v. Stewart Title of Louisiana (In re West Feliciana Acquisition, L.L.C.)
• Insurer Not Liable for Failing to Get Air Rights That Policy Did Not Insure: Union Street Tower LLC v. First American Title Ins. Co.
• Refi Rate Class Not Certified: Haskins v. First American Title Ins. Co.

Agent Focus

• Direct Action Law Does Not Allow Insurer to Sue Agent E & O Carrier: Commonwealth Land Title Ins. Co. v. American Signature Services, Inc.
• Insurer Not Responsible for Title Company Closing Acts: Anderson v. Preferred Title & Guar. Agency, Inc.
• Insurer’s Professional Liability Insurance Does Not Cover CPL Losses: EnTitle Ins. Co. v. Darwin Select Ins. Co.

Escrow Matters

• Closing Attorney Escrow Account Controls Create Ownership Question: Lawyers Title Co. v. J.G. Cooper Development, Inc.
• Escrowed Money Not Property of Bankruptcy Estate: In re Expert South Tulsa, LLC
• Escrowee Owes No Duty to Party Substituted Out as Escrow Principal: Silver Springs Oasis, LLC v. Lawyers Title of Arizona, Inc.
• Court Reverses Judgment Against Escrowee for Failure of 1031 Company After Closing Delayed: Ash v. North American Title Co.
• Federal Law Gives FDIC Longer Time to Sue: FDIC v. St. Louis Title, LLC

Title Insurance

• Insurer Liable for Title Issue Although Lender Ignored Requirement in Commitment: First Citizens Bank & Trust Co. v. Stewart Title Guar. Co.
• Removal of Survey Exception Becomes Coverage That Survey is Accurate: Lawyers Title Ins. Corp. v. Doubletree Partners, L.P
• Map Attached to Policy Does Not Insure Rights in Easement Shown on Drawing: Kloster v. Roberts
• Insurer Owes No Defense to Individual When Policy Insured Him as Trustee: Mulhearn v. Lawyers Title Ins. Co.
• Mineral Rights Loss Calculation Affirmed: May v. Ticor Title Ins. Co.
• Economic Loss Rule Does Not Bar Tort Claims Based on Loan Fraud: D.I.C. v. Lennar Corp
• No Fraud Claim for Statements About Access to Property: McColgan v. Brewer

RESPA News

• Sham Marketing Agreement Class Certified: Baehr v. Creig Northrop Team, P.C

Escrow Matters

• Servicer of Loan Paid Off Through Escrow Has No Standing to Sue Escrowee: Aurora Loan Services, LLC v. Security Title Agency, Inc.

Title Insurance

• Insured Lenders’ Full Credit Bids Reduce Policies to Zero: Equity Income Partners LP v. Chicago Title Ins. Co.
• Lender Might Have Policy Loss From Missing Parcel Although it Collected More Than Policy Limits on Sale of Other Parcels: Doss & Associates v. First American Title Ins. Co.
• Time to Sue on Policy Begins When Insured Lien is Foreclosed: S. Bank, N.A. v. First American Title Ins. Co.
• Time to Sue Insurer Begins on Claim Denial: Bank of America, N.A. v. Dakota Homestead Title Ins. Co.
• Exception for Trail Easement Also Excepts Rights of Travelers to Use Trail: Gugliotta Development, Inc. v. First American Title Ins. Co. of New York
• Jury Confused About Diminution: Borowski v. Stewart Title Guar. Co.
• Insurer Not Liable for Title Company Closing Acts: Branch Banking and Trust Co. v. Fidelity Nat. Title Ins. Co.

Agent Focus

• Agent Failed New Escrow Shortage Bankruptcy Discharge Test: In re Colson
• Tiered Agency Contract Not Illegal As a RESPA Violation: Dewrell Sacks, LLC v. Chicago Title Ins. Co.

Escrow Matters

• No Claim Against Closer Based on Loan Condition Not Related to Title: Shore Financial Services, Inc. v. Lakeside Title and Escrow Agency, Inc.

Conveyance News

• Mortgage Imparts Notice Though It Does Not Recite Certain Terms Suggested by Law: In re Crane
• Recent Equitable Subrogation Decisions

RESPA

• HUD 10-Factor Affiliated Business Test Torpedoed: Carter v. Welles-Bowen Realty, Inc.

Title Insurance

• Lender May Collect Loss After Making Credit Bid of More Than Policy Limits: Preservation Capital Consultants, LLC v. First American Title Ins. Co.
• Market Rebound May Prevent Bankruptcy Court Lien Stripping: In re Cahill
• Insurer May Recover From Fraudster But No Punitives: Levi v. Commonwealth Land Title Ins. Co.
• Release May Bar Lawsuit by Serial Litigant: HSBC Bank USA, Nat’l Ass’n v. Resh
• Voluntary Settlement of Lawsuit Voids Coverage: Umpqua Bank v. First American Title Ins. Co.
• Broad Reading Given to Insurance of Condo Declarant Rights: IDC Properties, Inc. v. Chicago Title Ins. Co.
• Court Considers How Exclusion 3(a) Applies to Loan Assignees; Utah Bars Abstractor Negligence Claims: Johnsen and Allphin Properties v. First American Title Ins. Co.

Agent Focus

• No E & O Coverage for Escrow Theft: Bethel v. Darwin Select Ins. Co.
• Insurer Liable for Agent Marketing Rule Violations: Chicago Title Ins. Co. v. Washington State Office of Ins. Commissioner