Bulletin: IN2010006

Date:
July 22, 2010
To:
All Indiana Issuing Offices
RE:
U.S. Bank, N.A., v. Integrity Land Title Corp. and Commitment Disclosure

Dear Associates:

On June 29, 2010, the Indiana Supreme Court in US Bank, N.A. v. Integrity Land Title Corp ., No. 17S03-1002-CV-120, held for the first time that a title company issuing an incorrect title commitment may be sued in tort for negligent misrepresentation. In this case, the title company missed a prior foreclosure judgment and the title insurer/underwriter had gone out of business. In recognizing an action for negligence against the title company, the court found that the title company had a duty to communicate the state of title accurately when issuing its preliminary commitment and that the insured bank relied on the commitment in order to approve its loan to borrower.

As previously stated in Stewart Bulletin MU000034, it is recommended that you add the following disclaimer to your commitment (or preliminary report or binder). Some courts may enforce a disclaimer for negligence.

THIS COMMITMENT (substitute preliminary report or binder where appropriate) IS NOT AN ABSTRACT, EXAMINATION, REPORT, OR REPRESENTATION OF FACT OR TITLE AND DOES NOT CREATE AND SHALL NOT BE THE BASIS OF ANY CLAIM FOR NEGLIGENCE, NEGLIGENT MISREPRESENTATION OR OTHER TORT CLAIM OR ACTION. THE SOLE LIABILITY OF COMPANY AND ITS TITLE INSURANCE AGENT SHALL ARISE UNDER AND BE GOVERNED BY THE CONDITIONS OF THE COMMITMENT.

A copy of the above-referenced Supreme Court case may be found at the following link: http://www.in.gov/judiciary/opinions/pdf/06291003fsj.pdf.

If you have questions relating to this or other bulletins, please contact your local underwriting personnel or Stewart Legal Services.

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.

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.

References

Bulletins Replaced:
None
Related Bulletins:
MU000034 Commitment Disclosure
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None