COA affirms judgment for insurer in property title dispute

Howard County landowners who were not informed of the existence of an easement when they purchased their property are entitled to $3,000 in compensation for the difference in the value of the property, but not the $61,000 a court ordered them to pay the easement holders in a related lawsuit.

That ruling Thursday by the Indiana Court of Appeals affirmed summary judgment for the title company in Anthony Hughes, et al. v. First American Title Insurance Co., 20A-PL-01850.

First American Title provided Anthony and Jennifer Hughes title insurance when they purchased real estate in Russiaville. “Unbeknownst to [the Harrises], however, the prior owners of the parcel had granted an easement across the entire south side of the parcel, the existence of which was not revealed in the title examination,” Senior Judge Ezra Friedlander wrote.

After becoming aware of the easement, the Harrises submitted a claim in 2016 under their title policy, and First American responded that it was assessing options for resolution. Separately, the Harrises sued the easement holders seeking an injunction, but they were ultimately found to have used “tire poppers” in an effort to thwart the use of the easement and were ordered to pay $61,000 in attorney fees and costs.

The instant case arose in 2018 when the Harrises sued First American, seeking damages resulting from the easement and the judgment against them in the injunction suit. Meantime, First American determined the diminution in value of the Harrises’ property was $3,000, which was tendered to the Harrises’ counsel but never negotiated.

The next month, First American moved for summary judgment, which the trial court granted and the Court of Appeals upheld, citing Linder v. Ticor Title Ins. Co. of Cal., Inc., 647 N.E.2d 37, 40 (Ind. Ct. App. 1995). There, in a similar dispute, the COA held the “actual loss is the diminution in value of the property caused by the easement.”

“… Moreover, title insurance does not insure against the conduct of the insured and does not cover matters involving personal dealings between individuals. … Only title to the parcel was insured under Appellants’ policy with First American — not any actions Appellants took to keep the easement holder from using the easement,” Friedlander wrote.

“… (W)e conclude Appellants should be reimbursed for the actual loss they suffered in reliance on their policy of title insurance, and such loss is the diminution in value of the property caused by the existence of the easement,” the panel concluded.