- August 14, 2003
- All Issuing Offices in Colorado
- Colorado Supreme Court Case Relating to an Examiner's Duty to Search Middle Name
This Bulletin will address the recent Colorado Supreme Court decision in Franklin Bank, N.A. v. Bowling as it relates to a title examiner's duty to search names in the chain of title.
In Franklin Bank, N.A. v. Bowling, Bruce and Elizabeth Bowling purchased a condominium unit in Eagle County from Patrice Merritt. The Bowlings obtained title insurance commitment, which did not refer to any judgment liens encumbering the property. Subsequently, Franklin Bank sought to execute a judgment against the property previously filed against Grady Merritt, the husband of Patrice Merritt. Grady Merritt appears in the chain of title as T. Grady Merritt and was the record owner at the time the judgment lien was filed. One day after the Judgment is recorded, T. Grady Merritt quitclaims his interest in the property to his wife for nominal consideration. The Bowlings sought to enjoin the execution of the property on the grounds that the liens were filed against Grady Merritt, not T. Grady Merritt.
The Court held that the Bowlings, through their "agent title insurer" had constructive notice of the lien because when an individual uses a first initial and a full middle name, there is a presumption that he may transact business under his middle name rather than under his full first name. Accordingly, the title examiner, as the "purchaser's agent", is on constructive notice of the judgment lien filed against Grady Merritt, even though the examiner was searching for recordings against T. Grady Merritt.
Where an individual in the chain of title uses a first initial and a full middle name, a title examiner should assume that the person is transacting business under his middle name. In such cases, the examiner should check for judgments, liens and encumbrances under the grantor's middle name as well as the grantor's first initial and full middle name.
THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.
- Bulletins Replaced:
- Related Bulletins:
- Underwriting Manual:
- 13.00 Names
- Exceptions Manual: