Title Insurance Law Journal

Title Insurance

• FDIC Closing Protection Lawsuit Barred Due to Tardy Notice: Federal Deposit Ins. Corp. v. Chicago Title Ins. Co.
• Subdivision Map Error and Conveyance of Wrong Lot Not Covered by Policy: Kessee v. First American Title Co.
• Debt Not Discharged Because Debtor Hid Money From Insurer: In re Brandenfels
• Florida Title Insurer Need Not Search for Prior Policy In Order to Give Reissue Rate: Bleich v. Chicago Title Ins. Co.
• Title Insurance Is Not a Bar to Equitable Subrogation in Massachusetts: Bank of America, N. A. v. Diamond Financial, LLC

Agent Focus

• Title Insurer That Might Seek Recovery From Agent is Necessary Party in E & O Declaratory Judgment Action: Houston Specialty Ins. Co. v. Titleworks of Southwest Florida, Inc.
• E & O Carrier Must Defend Agent; Coverage Defenses Waived: Title Industry Assurance Co., R.R.G. v. Chicago Abstract Title Agency
• Status as Attorney or Agent Determines Statute of Limitations: Mississippi Valley Title Ins. Co. v. Thompson

Escrow Matters

• Seller May Not Sue Escrowee For Closing on Purchase Contract as Written: Hodges v. First Texas Title Company, LLC
• No Bright Line Test About Who Bears Risk of Forged Loan Payoff Letter: M & T Bank v. Mallinckrodt
• Borrowers Cannot Sue Escrowee for Breach of Loan Closing Instructions: Sarnecky v. Fidelity National Title Co.

Title Insurance

• Recorded Permit Not an Encumbrance and Does Not Make Title Unmarketable: Veeder v. Old Republic National Title Ins. Co.
• Insurer Not Required to Pay Inflated Amounts for Settled Lien Claims: Fidelity Nat’l Title Ins. Co. v. Centerpoint Mechanic Lien Claims, LLC
• Borrower Who Asserts His Signature Was Forged May Not Then Make Policy Claim for Title Defect: Howard v. Fidelity Nat’l Title Ins. Co.
• Judge, Not Jury, Rules on Bad Faith Claims in Virginia: REVI, LLC v. Chicago Title Ins. Co.
• Title Insurer May Take Back Stolen Escrow Money It Can Trace to Third Parties

Escrow Matters

• Escrowee Did Not Violate Duties by Returning Deposited Money to Sender: Chicago Title Ins. Co. v. Sinikovic
• FDIC Recovery Against Closer for Loan Fraud Limited to Amounts of Deficiency Judgments Against Borrowers: Federal Deposit Ins. Corp. v. Chicago Title Ins. Co.
• Timing of Escrowee’s Tax Payment Did Not Cause Foreclosure: Beckett Family Rentals, L.L.C. v. Schweitzer Title Agency, Ltd.
• 1031 Intermediary Not Liable When Seller Did Not Convey Land to Taxpayers: Cheney v. Hinton Burdick Hall & Spilker, PLLC
• Accredited Investor Not Entitled to Extended Time to Sue for Alleged Failure to Disclose Double Escrow: WA Southwest 2, LLC v. First American Title Ins. Co.

Title Insurance

• Junior Lender Suffers No Loss If Its Lien Attaches to No Equity: Twin Cities Metro-Certified Development Co. v. Stewart Title Guar. Co.
• New 2006 ALTA Policy Coverages Do Not Protect Against Existence of Taxing District: BV Jordanelle, LLC v. Old Republic Nat. Title Ins. Co.
• Subordination Statement in Exception Not an Assurance: The Peoples Bank v. Troutman
• Post-Policy Tax With Pre-Policy Lien Date Might Be Covered: Menconi v. Stewart Title of Illinois
• Insurer’s Suit to Recover Loan Payoff from Borrowers Brought Too Late: In re Leone
• Deed of Trust Grants Lien on Title Insurance Policy Claim Money: Van Buren Estates Lenders, LLC v. Fiegl

Agent Focus

• Insurer Vicariously Liable for Hacking of Agent Escrow Account: Luan v. Advanced Title Ins. Agency, L.C.

RESPA Alert

• Delivery Service Vendor Contract Not a RESPA Violation: Henson v. Fidelity National Financial, Inc.,

Conveyance News

• Mortgage Enforceable Although Deeds in Chain of Title Were Recorded Out of Order: Wells Fargo Bank, N.A. v. Simpson
• Creditor Holding Defective Lien Beats Company Insider Creditor: In re Starlight Group

Escrow Matters

• Utah Escrow Vicarious Liability Law Applies Even When Agent Does Not Steal Money: Orlando Millenia, LC v. United Title Services of Utah, Inc.
• Title Transfers on Date Escrowed Deed is Delivered: Flores Camac v. 550 Realty Heights, LLC
• Recording Duty Question Sent to Washington Supreme Court: Centurion Properties III, LLC v. Chicago Title Ins. Co.
• Title Transfers on Date Escrowed Deed is Delivered: Flores Camac v. 550 Realty Heights, LLC

Title Insurance

• Title Insurance Does Not Pay for Decline in Market Value: Premier Community Bank v. First American Title Ins. Co.
• Arizona Adopts Date of Policy as Loss Date on Loan Policies: First American Title Ins. Co. v. Johnson Bank
• Indemnitors Owe Insurer for Mechanic Liens and Defense Costs: First American Title Ins. Co. v. Spanish Inn, Inc.
• Subrogation Rights Not Negated by Alleged Negligence: Puente v. Beneficial Mortgage Co. of Indiana

Agent Focus

• Title Company Not the Underwriter’s Agent for Construction Disbursing: Haselow v. Vilas Title Service, Inc.

Title Insurance

• Financial Analyst Not Allowed to Testify on Diminution in Value: Feduniak v. Old Republic Nat’l Title Ins. Co.
• Illinois Land Trust Beneficiary May Make Claim on Policy Issued to Trustee: Warczak v. Attorneys’ Title Guaranty Fund, Inc.
• Title Insurer Did Not Slander Title by Paying for Insured’s Access Lawsuit: Denton v. First American Title Ins. Co.
• Loan Closing Instructions Not a Promise to Obtain and Review Survey: Bank of New York Mellon, Trustee v. Jacobson
• No Policy Coverage for Post-Policy Tax Reassessment: Lone Star Equities, Inc. v. Dimitrouleas
• Attorney-Client Privilege Applies to Communication Between Insurer and Defense Counsel It Retains: Commonwealth Land Title Ins. Co. v. Funk

Agent Focus

• Punitive Damages Appropriate for Agent Escrow Theft: Schwartz v. Aracor Search & Abstract, Inc.

Escrow Matters

• Escrowee Has No Duty to Confirm That One Principal Sent a Notice to the Other: Madison Square Development Partnership of Arizona v. Chicago Title Ins. Co.
• Purchase Agreement Controls Deposits When No Escrow Instructions Signed: Wiczer v. Wojciak

Conveyance News

• Equitable Subrogation Decisions

Title Insurance

• Insurer Must Defend Lawsuit Over Need for STB Rail Line Abandonment: 212 Marin Boulevard, LLC v. Chicago Title Ins. Co.
• Insurer Subrogee Must Prove Reliance on Warranty to Sue for Its Breach: Chicago Title Ins. Co. v. Bass
• Insurer as Subrogee Need Not Prove Reliance to Sue for Breach of Warranty: Romero v. Stewart Title Guar. Co.
• Connecticut Rejects Policy Termination Principle: First American Title Ins. Co. v. 273 Water Street, LLC
• Loss Under Mortgagee Policy Not Measured as Loan Amount: First American Title Ins. Co. v. Patriot Bank

Agent Focus

• Title Insurer Too Late to Collect on Virginia Title Agent Bond: First American Title Ins. Co. v. Star City Title & Settlement Agency, Inc.
• Nebraska Escrow Strict Liability Law Prohibits Insurer From Recovering Money: United General Title Ins. Co. v. Malone

Escrow Matters

• Escrowee-Inspector Not Liable for Improvements Not Built: Armenta v. First American Fund Control, Inc.

Conveyance News

• Bankruptcy Judges Say Mortgages Listed on Torrens Certificates Do Not Impart Notice: In re Mbazira
• Five-Year Mortgage Statute of Limitations Law Constitutional and Enforced: Deutsche Bank Nat’l Trust Co. v. Fitchburg Capital, LLC

Closing Protection Letters

• Lender’s Lack of Reasonable Loan Underwriting Not a Defense to CPL Liability: Federal Deposit Ins. Corp. v. Fidelity Nat’l Title Ins. Co.

RESPA Alert

• Neither Recording Charge Markup Nor Splitting of Closing Fee Violated RESPA: Clements v. LSI Title Agency, Inc.

Title Insurance

• FDIC Gets Full Loan Amount Under CPL Because Down Payment Not Paid By Borrower: Federal Deposit Ins. Corp. v. First American Title Ins. Co.
• Construction Lien Indemnity Covers Tenant Work Also: Chicago Title Ins. Co. v. Ali Properties, I, LLC
• Insurer Sued Under Policy Cannot Bring Claims Against Notary Who Permitted Impersonation: S. Bank, N.A. v. Commonwealth Land Title Ins. Co.
• Claim Not Tardy Although No Notice Given of Pending Suit: Emigrant Mortgage Co. v. Commonwealth Land Title Ins. Co.
• Policy Not Void Because Agent Did Not Get Insurer’s Approval to Issue It: FV-1, Inc. v. Commonwealth Land Title Ins. Co.
• Payment of Taxes Does Not Make Payor an Insured: LJC Financial, LLC v. Alliant Nat’l Title Ins. Co.

Escrow Matters

• Escrow Instruction Indemnity Provision Not a Prevailing-Party Attorney Fee Provision: Rideau v. Stewart Title of California, Inc.
• Closers Not Liable For Failing to Claim Transfer Tax Exemption: Bushman v. American Title Co. of Washtenaw
• Insurer Slandered Title by Recording Deed: McClain v. Chicago Title Ins. Co.
• Closer Cannot Sue Mortgage Holder to Lay Off Closing Error: Commonwealth Land Title Ins. Co. v. Funk
• Escrow Money Held by Bank Evaporates on FDIC Takeover: RPM Nautical Foundation, Inc. v. Centennial Bank
• Third Party’s Money Properly Treated as Deposit Under Escrow: Stewart Title of Louisiana v. Chevron, U.S.A., Inc.

Title Insurance

• CPL Notice Cutoff Provision Enforced: Regions Bank v. Stewart Title Guar. Co.
• Rare Reinsurance Battle Brewing Over Mechanics’ Liens: Old Republic Nat’l Title Ins. Co. v. First American Title Ins. Co.
• Fraud Claim Against Borrower Requires Proof of a False Statement: Fidelity National Title Ins. Co. v. Worthington
• Dishonesty Coverage of CPL Applies Even if Agent Does Not Steal Money: Fifth Third Mortgage—MI, L.L.C. v. First American Title Ins. Co.
• Construction Lender “Created” Mechanic Liens on Underfinanced Project: BB Syndication Services, Inc. v. First American Title Ins. Co.

Conveyance News

• Lender May Reform Mortgage Based on Borrower’s Bankruptcy Petition Admission: Barron v. Wells Fargo Bank

RESPA Alert

• CFPB Affiliated Business Agent Enforcement Action Continues: Consumer Financial Protection Bureau v. Borders & Borders, PLC

Title Insurance

• Access and Zoning Endorsements Construed; Loan Policy Date of Loss Determined: Commonwealth Land Title Ins. Co. v. Sun Valley Credit, LLC
• No Negligence Defense to CPL Claim: Federal Deposit Ins. Corp. v. First American Title Ins. Co.
• Insurer’s Defense of Counterclaim Challenging Insured Mortgage Did Not Obligate Insurer to Pay for Foreclosure Also: First Clover Leaf Bank v. National Land Title Ins. Co.
• CPL Claim Notice Limitations Period Provision Made Fuzzy: JPMorgan Chase Bank v. Old Republic Nat’l Title Ins. Co.
• Trial Will Decide If Insured Lender Suffered Risk That Subordination Might Be Void: Metropolitan Nat’l Bank v. Commonwealth Land Title Ins. Co.
• Loss Payable on Claim Made After Foreclosure Equals Redemption Cost: CitiMortgage, Inc. v. Shapiro
• Loan Assignment Included Closing Protection Letter: First American Title Ins. Co. v. Citizens Bank
• Time to Sue for Failure to Defend Begins When Lawsuit is Over, Not on Tender: Feduniak v. Old Republic Nat’l Title Co.
• Lawsuit Alleging Lack of Title Clearance Diligence is Premature While Action is Pending: JFK Enterprises, LLC v. Old Republic National Title Ins. Co.

Escrow Matters

• Both Escrowees in Split Closing May Rely on Third Party Lien Release Promise: Stommel v. LNV Corp.
• Insurer Not Liable for Accommodation Recording “Error”: Kipperman v. First American Title Co.

Title Insurance

• Insurer’s Defense of Forged Deed May Have Been Bad Faith Delay in Claim Payment; Some Writings of Outside Counsel and Claims Counsel Discoverable: Anastasi v. Fidelity Nat’l Title Ins. Co.
• Insurer Made Insured Owners Whole By Paying Off Debt: Marchetti v. Chicago Title Ins. Co.
• No Policy Coverage for Future Taxes or Pending Tax Appeal: Princeton South Investors, LLC v. First American Title Ins. Co.
• Insured Has No Loss For Land It Did Not Buy: Demetrio v. Stewart Title Ins. Co.
• Seller’s Liability Under Deed Warranty Not Negated by Title Insurance Coverage: JV Properties, LLC v. SMR7, LLC
• Statute of Limitations to Sue Insurer Starts at Date of Purchase: Shepard v. Holmes

Agent Focus

• Claim Against Title Agent Expires With Malpractice Claim Against its Attorney Employee: Loan Partners, LLC v. PTC Family Investments, LLC

Escrow Matters

• Limitations Period Not Extended Because Insurer Later Turned Over More Discovery Documents: Krot v. Fidelity Nat’l Title Co.
• Sellers May Not Sue Escrow Officer for Fraud: Dailey v. Thorpe
• Escrowee Sued for Breach of Purchase Contract Entitled to Prevailing-Party Attorney Fees Under That Contract: Fidelity National Title Co. v. 1575 Adrian Road Associates, LLC

Conveyance News

• Equitable Subrogation Case Round-Up

Title Insurance

• Insurer Not Required to Buy Water System Located on Property for Insured Who Bought Building at Foreclosure Sale: Geo Finance, LLC v. University Square 2751, LLC
• Fear of Pollution or Explosion Part of Diminution Caused by Pipeline Easement: Gaviota Holdings, LLC v. Chicago Title Ins. Co.
• Insurer Not Required to Pay Attorney Fees of Law Firm It Did Not Hire to Defend Insured: Ogden Plaza Garage Company, LLC v. First American Title Ins. Co.
• Insured Did Not Fail to Cooperate by Resisting Clearance of Title: Breaux v. Cozy Cottages, LLC
• Insured Has a Right of Access Even Without a Platted Street: James v. Chicago Title Ins. Co.
• Loan Broker That Pays Taxes Cannot Sue Under Policy; Lack of Exception Not a Misrepresentation: LJC Financial, LLC v. Alliant Nat’l Title Ins. Co.
• Building Code Violation Notice Not Covered; Requirement for Release of Notice Not a Promise to Obtain It: Stockton Mortgage, Inc. v. Tope

Escrow Matters

• Escrowee’s Issuance of Wrong Policy Form Did Not Cause Buyer to Default on Loan and Lose Title: Sean & Shenassa 26, LLC v. Chicago Title Co.

Title Insurance

• Title Clearance Attempt That Provokes Non-Covered Suit Could Beget Coverage: Feduniak v. Old Republic Nat’l Title Ins. Co.
• Illinois Title Insurer Must Defend Covered Counts Only: Philadelphia Indem. Ins. Co. v. Chicago Title Ins. Co.
• Insurer Must Defend Former Owner of Loan: Colonial Mortgage Service Co. v. Commonwealth Land Title Ins. Co.
• Insurer Must Defend Lawsuit Settled in Principle Before Tender
• Reconveyance of Deed of Trust Terminates Loan Policy: RNT Holdings, LLC v. United General Title Ins. Co.
• Fraudulent Transfer of House Means Debt Not Discharged in Bankruptcy: United General Title Ins. Co. v. Karanasos
• Condo Declaration Exception Negates Coverage For All Rights It Creates: IQ Holdings, Inc. v. Stewart Title Guar. Co.
• Non-Waiver Language in Claim Denial Permits Insurer to Assert More Defenses Later: Pasha v. Commonwealth Land Title Ins. Co.
• Insurer Must Defend Lawsuit Settled in Principle Before Tender: Ventana Partners, LLC v. Lanoue Development, LLC

Conveyance News

• Deed of Trust Imparts Notice Despite Minor Legal Description Error: Manicom v. CitiMortgage, Inc.

Escrow Matters

• Title Company Owed No Escrow Duties to Lender That Gave Instructions to Escrow Company: Flagstar Bank, FSB v. Walker