Court Report

After the purchaser of property in Mount Prospect, Ill., received notice of sale and redemption rights stating the property had been sold at tax sale for delinquent property taxes from years in which the seller had owned the property, the purchaser sued the seller for unjust enrichment and seeking declaratory judgment that the seller was responsible to pay all future costs the purchaser would incur to clear title. After the trial court granted the seller’s motion to dismiss, the purchaser appealed.

Two national title insurers sued a title agency, its principal and its professional liability insurance provider after discovering the agency’s negligent acts. As the case moved forward, the professional liability insurance provider moved to dismiss the case because the title insurers are non-parties who have no standing to bring a claim for damages directly against it. Read on for the U.S. District Court for the Eastern District of New York’s decision on the issue.

The trustee of a trust that held a title insurance policy regarding a promissory note it was issued by a couple regarding property in Bell Gardens filed a claim for defense after discovering the signature on the deed was forged by the couple’s son. The title insurer provided defense, but only for the trustee as trustee and not in his individual capacity. The trustee eventually filed suit for breach of contract, breach of implied covenant of good faith and fair dealing and unfair competition. The trial court sustained the title insurers’ demurrer and the trustee appealed. Read on for the appellate court’s decision.

A routine audit of two Colorado title agencies’ escrow accounts prompted their underwriter to take a deeper look into the companies’ financials. The underwriter discovered a large negative balance to the agencies’ trust accounts during an on-site audit and alerted the Colorado Division of Insurance, which is conducting an investigation of the companies. The insurer also filed suit against the companies in order to assist with loan closings to mitigate the harm that real property sellers, buyers, brokers or lenders may suffer.

After the Maryland attorney general sued a title agency for alleged fraudulent actions, the agency sought coverage from its professional liability insurer. The insurer denied the claim, arguing that the attorney general’s suit fell within several policy exclusions. The district court agreed, but on appeal, the 4th U.S. Circuit Court of Appeals held that the insurer did have a duty to defend. Read on for the court’s reasoning.

Insured homeowners sued their title insurer for breach of contract and breach of duty of good faith and fair dealing, arguing that the title insurer offered insufficient compensation for mineral interests in which prior landowners had reserved one-half undivided interest. Following a jury trial, the district court determined the insurer did not breach duty of good faith and fair dealing, but found the insurer to be in breach of the title insurance contract. The homeowners appealed and the insurer cross-appealed. Read on for more details.

In connection with securing a construction loan, the owners of the property issued an owner’s affidavit indicating that there was no encumbrance on the subject property, when in actuality there was a $4 million deed of trust encumbering it. When the borrowers defaulted on the loan, the title insurer who relied on that affidavit satisfied the original deed of trust and sued its agent and the owners for breach of contract and negligent misrepresentation.

The U.S. District Court for the Eastern District of Missouri upheld a suit from the Federal Deposit Insurance Co. against a St. Louis title agency for breach of contract and negligence. The FDIC alleged that the title agency failed to disclose documents, failed to follow closing instructions and improperly disbursed loan funds at the closing of a residential loan. Read on for more details.

Maryland homeowners filed suit against a real estate company and a title company, alleging that the real estate company received more than half a million dollars in illegal kickbacks from the title agency over 13 years, in violation of RESPA. The parties filed several motions, including motions to dismiss several defendants and a motion to certify the case as a class action. Read on to find out what the U.S. District Court for the District of Maryland had to say.

A title insurer brought a breach of contract action against its professional liability insurer, after the insurer refused to cover the misappropriation of escrow funds from the title insurer’s policyholders by the insured’s limited purpose agent. The U.S. District Court for the Northern District of Ohio granted summary judgment for the professional liability insurer. The title insurer appealed.