Court: Policy required notice to title insurance company

A Greensburg couple who received two legal notices that their home was going into a tax sale never notified their title insurance company about the issue, which doomed their lawsuit. The Indiana Court of Appeals upheld summary judgment in favor of the title insurer.

Michael and Chassidy Pike sued Conestoga Title Insurance Co. and their mortgage holders after learning in 2006 that it was a May 23, 2003, special assessment that remained unpaid and led to the sale of their home for a tax delinquency. The Pikes purchased their home at the end of 2003 and Conestoga issued the title insurance policy in January 2004. Their lawsuit alleged that the title search failed to turn up this special assessment.

The couple received two notices about the unpaid taxes but never contacted Conestoga as required in their policy. Their mortgage holder told the couple to ignore the notices as all taxes due on the home were paid.

The Pikes hired Richard Wayne Greeson to represent them. Greeson also owned the company that sought a tax deed on the property. A footnote in the opinion says the Pikes signed an informed consent for attorney representation in which they noted they were aware of this relationship.

Conestoga moved for summary judgment after arguing that the Pikes voided their title insurance policy when they did not notify Conestoga about the tax sale and that the company did not act in bad faith. The trial court agreed with the title insurer and granted its motion.

“To the extent the Pikes argue that they did not have actual knowledge of their claim until they hired Greeson in April 2007 and discovered that the tax deficiency resulted from the failure to pay a 2003 special assessment, we note that the contract requires no such specificity. Rather, the contract requires only notice of an adverse claim that might cause the insurance company to be liable. The Pikes had such knowledge as early as June 2006 and then again in November 2006. Under the terms of the policy, the Pikes were required to notify Conestoga at those times,” Judge Elaine Brown wrote in Michael R. Pike, and Chassidy L. Pike v. Conestoga Title Insurance Co.,  16A05-1501-CT-27.

“We further note that to the extent the Pikes argue that they did not have knowledge of their claim because they are unsophisticated, we note that insureds have a duty to read and to know the contents of their insurance policies.”