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COA reverses judgment in title insurance issue

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The Indiana Court of Appeals has declined to extend to an insurance agent the duty of an insurer as declared by the state’s highest court. In doing so, the judges reversed the denial of a title insurance company’s motion for summary judgment.

In Meridian Title Corporation v. Gainer Group, LLC, No. 46A03-1006-PL-312, Gainer Group LLC sued Meridian Title Corporation, alleging Meridian failed to properly handle Gainer Group’s claim in a lawsuit involving a piece of property. The Ruth N. Cathey Trust sold some property to the Gainer Group and the trust engaged Meridian to procure title insurance for the property. After the sale, the trust claimed it mistakenly sold more land to Gainer Group than it had intended.

Meridian tried to facilitate a resolution, but the trust ended up suing Gainer Group to recover the piece of property it didn’t want to sell. That’s when Gainer Group filed its lawsuit against Meridian, seeking to recover litigation expenses and attorney fees it incurred prior to its insurer accepting the claim.

There’s no evidence of an intimate, long-term relationship between Meridian and Gainer Group that would require Meridian to perform a duty that extends beyond its general duty to exercise reasonable care, skill, and good-faith diligence in obtaining the insurance policy, wrote Senior Judge John Sharpnack. But the facts of the case do constitute a special circumstance that triggers an extended duty to advise on the part of Meridian.

Meridian tried to facilitate a settlement between the trust and Gainer Group at its offices. At this meeting, Meridian’s president and CEO pointed to a provision in the title policy and said that Gainer Group didn’t have a claim because it had closed without a survey. Meridian also had a financial interest in no claim being made under Gainer Group’s policy of title insurance, the judge continued.

Meridian had this extended duty to advise Gainer Group regarding coverage, and it fulfilled that duty, the Court of Appeals concluded.

Gainer Group cited Erie Ins. Co. v. Hickman by Smith, 622 N.E.2d 515 (Ind. 1993), to support its argument that Meridian owed it a duty of good faith and fair dealing beyond its general duty of reasonable care, skill, and good-faith diligence. But that case dealt with the duty of an insurer to an insured. In the instant case, Meridian is an agent.

“Our Supreme Court has yet to extend this duty to an agent; rather, an insurance agent’s duty does not extend beyond the general duty to exercise reasonable care, skill and good faith diligence in obtaining a policy of insurance unless the evidence, through certain factors as set forth above, establishes a special relationship,” wrote Senior Judge Sharpnack. “Therefore, we decline Gainer Group’s invitation to extend the application of the duty of an insurer as set out by the Supreme Court in Erie.”

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  1. Why in the world would someone need a person to correct a transcript when a realtime court reporter could provide them with a transcript (rough draft) immediately?

  2. If the end result is to simply record the spoke word, then perhaps some day digital recording may eventually be the status quo. However, it is a shallow view to believe the professional court reporter's function is to simply report the spoken word and nothing else. There are many aspects to being a professional court reporter, and many aspects involved in producing a professional and accurate transcript. A properly trained professional steno court reporter has achieved a skill set in a field where the average dropout rate in court reporting schools across the nation is 80% due to the difficulty of mastering the necessary skills. To name just a few "extras" that a court reporter with proper training brings into a courtroom or a deposition suite; an understanding of legal procedure, technology specific to the legal profession, and an understanding of what is being said by the attorneys and litigants (which makes a huge difference in the quality of the transcript). As to contracting, or anti-contracting the argument is simple. The court reporter as governed by our ethical standards is to be the independent, unbiased individual in a deposition or courtroom setting. When one has entered into a contract with any party, insurance carrier, etc., then that reporter is no longer unbiased. I have been a court reporter for over 30 years and I echo Mr. Richardson's remarks that I too am here to serve.

  3. A competitive bid process is ethical and appropriate especially when dealing with government agencies and large corporations, but an ethical line is crossed when court reporters in Pittsburgh start charging exorbitant fees on opposing counsel. This fee shifting isn't just financially biased, it undermines the entire justice system, giving advantages to those that can afford litigation the most. It makes no sense.

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