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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. From his recent appearance on WRTV to this story here, Frank is everywhere. Couldn't happen to a nicer guy, although he should stop using Eric Schnauffer for his 7th Circuit briefs. They're not THAT hard.

  2. They learn our language prior to coming here. My grandparents who came over on the boat, had to learn English and become familiarize with Americas customs and culture. They are in our land now, speak ENGLISH!!

  3. @ Rebecca D Fell, I am very sorry for your loss. I think it gives the family solace and a bit of closure to go to a road side memorial. Those that oppose them probably did not experience the loss of a child or a loved one.

  4. If it were your child that died maybe you'd be more understanding. Most of us don't have graves to visit. My son was killed on a state road and I will be putting up a memorial where he died. It gives us a sense of peace to be at the location he took his last breath. Some people should be more understanding of that.

  5. Can we please take notice of the connection between the declining state of families across the United States and the RISE OF CPS INVOLVEMENT??? They call themselves "advocates" for "children's rights", however, statistics show those children whom are taken from, even NEGLIGENT homes are LESS likely to become successful, independent adults!!! Not to mention the undeniable lack of respect and lack of responsibility of the children being raised today vs the way we were raised 20 years ago, when families still existed. I was born in 1981 and I didn't even ever hear the term "CPS", in fact, I didn't even know they existed until about ten years ago... Now our children have disagreements between friends and they actually THREATEN EACH OTHER WITH, "I'll call CPS" or "I'll have [my parent] (usually singular) call CPS"!!!! And the truth is, no parent is perfect and we all have flaws and make mistakes, but it is RIGHTFULLY OURS - BY THE CONSTITUTION OF THIS GREAT NATION - to be imperfect. Let's take a good look at what kind of parenting those that are stealing our children are doing, what kind of adults are they producing? WHAT ACTUALLY HAPPENS TO THE CHILDREN THAT HAVE BEEN RIPPED FROM THEIR FAMILY AND THAT CHILD'S SUCCESS - or otherwise - AS AN ADULT.....

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