Another case about the ins and outs of title insurance. We cover these from time to time because many lawyers don’t understand what it is and isn’t

Centennial bought land in Snowflake then discovered easements on it. It let the property go back to the seller/lender then sued Lawyers Title in tort and contract. The trial court gave Lawyers Title summary judgment. Centennial appealed.

The Court of Appeals affirms on the tort claim. Centennial’s was for negligent misrepresentation, arguing that it wouldn’t have purchased the property had it had an accurate title report. But under the statutes a title report – an “abstract of title,” the phrase  “title report” having been carefully maneuvered into obsolescence – isn’t what a title company issues. A title policy is (to use our own language; the statute doesn’t put it quite this way) just a bet that there won’t be title defects not listed in the policy. (The court characterizes the effect of this 1992 statute as “effectively barring” a negligence claim that could have been made under prior law; we thought we had a Constitution “effectively barring” that sort of thing.)

In contract the Court of Appeals reverses and remands. Lawyers Title argued that its policy only covers insureds while they own the property. But  Centennial’s argument was that because of the unknown easements it paid too much for the property and had to let it go back to the seller – i.e., that the damage was incurred while it was the owner. The policy, says the court, does not prevent that claim from being made later.

(link to opinion)