Title dispute leads to appellate reversal

The Indiana Court of Appeals has reversed a decision in favor of a title company, finding that the trial court must re-examine the case to decide if the two property owners have an action for negligent contract misrepresentation relating to a land easement dispute.

In Ronald E. Izynski and Linda Izynski v. Chicago Title Insurance Co., No. 45A04-1006-PL-277, the appellate court analyzed a contract dispute arising from a land ownership deal in 2003.
 
Ronald and Linda Izynski bought real estate in Porter County from Charles Ashton, and that property had a 50-foot easement that was publicly recorded but wasn’t reflected in multiple versions of a title commitment issued by Chicago Title Insurance Co. After the Izynskis learned about the easement and bought the property at a reduced price, they sued Chicago Title for breach of contract and negligence. But after a bench trial, the judge found in the title company’s favor.

The appellate panel found the trial court erred by finding the Izynskis were in contractual privity with Chicago Title because of the preliminary title and final policy issued. The trial court found that because Chicago Title and the Izynskis had a contract, no tort claim of negligent misrepresentation was available and they’re left with only contractual remedies. That was an error, the appellate panel determined, because Chicago Title had issued the title documentation to the owner the Izynskis bought the property from and the company didn’t actually have a contract with the Izynskis.

Chicago Title aruged the Izynskis had no breach of contract action because when they agreed to purchase the property, all versions of the title commitment had been issued to prospective buyer McLane and not to the Izynskis. It also argued the Izynskis have no tort remedy because they were in contractual privity with Chicago Title.

“Chicago Title cannot have it both ways,” wrote Judge Melissa May. “As we find there was no privity when the Izynskis agreed to buy the property, we remand for a determination whether the Izynskis have an action for negligent misrepresentation.”

The appellate panel also found the trial court erred in finding that mention of a previous easement from 1972 serves as notice for the 1979 easement at issue.