A paucity of unique and novel questions forwarded from the editor require yet another philosophical treatise. A Tute with time on its hands is a dangerous thing indeed. Again, I am deeply indebted to LandAmerica Financial Group for providing me with a copy of SingleSourceTM v. 1.2 , portions of which I continue to shamelessly plagiarize, while extending full recognition to them for their outstanding product.1
At the close of the last edition, I quoted: "The examination of title, which results in taking proper exception to matters against which we are not willing to insure, is the concern of the examiner. Exceptions ambiguously or incorrectly worded can lead to claims, just as though no exception had been made." Some of you perhaps asked,
"How can that be? We found the defect, we reported the defect, how can we still be liable?" you asked one another.
Let us presume the examination was in an elderly subdivision, formerly on the outskirts, but now nearly in the center of what is now a major metropolitan area. Let us further presume that our examination found a deed from the developer containing an unenforceable covenant, requiring a residential use, requiring a hook up to city water and sewer when such became available, imposed a building set back line, and reserved an easement along the front, side and rear lot lines of each lot for utility service. Our last assumption is that newest title searcher and underwriter on your staff were given this project because everyone else hates doing titles in this subdivision ("they make my head hurt"). The searcher (always blame the new guy!) reports the deed as
"CCRs contained in deed from developer, dated o'dark hundred, and recorded in DB/P." The underwriter repeats the exception exactly as the searcher reported it. The transaction closes, time passes, our young searcher and underwriter fall in love, get married, buy the agency, and are in the process of living happily ever after when the insured from their very first project together calls and says
"VEPCO wants to tear down my building because they need to fix (something) and they say it is under my building. Make them go away."
After a calm and rational discussion with VEPCO, in which VEPCO recites its version of the history of the easement, tracing it back to a deed from the developer at the dawn of the modern age, our
"living not so happily ever after at this particular moment" title experts review the title policy.
"The easement from the developer at the dawn of the modern age was recorded after the deed to our insured's predecessor in title in o'dark hundred," they very reasonably suggest to VEPCO.
"As the developer no longer owned the land, he could not grant an easement over the land."
"Your predecessor's deed reserved an easement for utilities in the very place where our (something) sits today," says the VEPCO representative, whose smile increasingly seems to resemble those shown in photographs of large rodents last seen at the Museum of Natural History on a field trip during high school.
"It's not our fault," say the hapless couple, recognizing by now that this was the very first file on which they worked.
"We took exception. The policy doesn't cover it."
"I must disagree with your conclusion," says the greyish, heretofore silent, representative of the insured owner (watch out group, we're going with animal analogies today, in case you hadn't noticed, and the next one is soooo predictable), who continued
"Your policy took exception to, and I quote: 'CCRs contained in deed from developer . . .
' and the defect in title of which our client is complaining is an easement. If you deny coverage, not only will we pursue our title claim, and not only will we take legal action against you individually, severally and personally for your egregious, willful and wanton negligence, but we'll seek additional damages for your wrongful denial of our oh so meritorious title claim. My client feels a severe emotional trauma coming on already." Then, and only then, does our hapless title duo notice the multiple rows of almost 3000 teeth, the five jagged gill slits, the widely hinged jaw and the name tag identifying the insured's attorney as Carcharodon
'Don' Carcharias, Lamniformes at Law.
Law School 101: Ambiguity in a document will be construed against the drafter.
Law School 601: How to completely change a document, but leave the other guy with credit as drafter
Tute will address some or all of these specific issues in future columns. Perhaps those
"how-to" portions will induce you kind people to continue to read and treasure the VLTA Examiner.
1 Copyright © 1998 LandAmerica Financial Group, Inc. All Rights Reserved.
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