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Title insurer had duty to defend

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The 7th Circuit Court of Appeals found that Ticor Title Insurance Co. breached its duty to defend Home Federal Savings Bank on a counterclaim brought by a general contractor on the failed ethanol plant in Cloverdale.

Altra Indiana LLC got a $95.5 million loan from Home Federal Savings Bank to construct the ethanol plant. Home Federal obtained a mortgage on the property and purchased title insurance from Ticor. The policy included a mechanic’s lien endorsement, which obligated Ticor to defend Home Federal in litigation in which a third party asserts a claim …alleging a ... lien …”

In September 2008, F.A. Wilhelm Construct Co. filed a mechanic’s lien on the property after Altra fired the contractor. Wilhelm claimed it was owed $6 million for work on the project. An October 2008 title search by Ticor revealed the lien. Ticor declined to defend Home Federal on its claim that its attempt to foreclose on the plant property took priority over the lien.

Home Federal and Wilhelm eventually settled for $1.8 million, with no contribution from Ticor. Home Federal then sued Ticor alleging the company acted in bad faith and breached its duties to defend against Wilhelm’s counterclaim that its mechanic’s lien had priority or was equal to the mortgage, and failed in not indemnifying the bank for the settlement and attorney fees.

U.S. Judge Jane Magnus-Stinson ruled in favor of Ticor, relying on the policy exclusion for any “Defects, liens, encumbrances, adverse claims or other matters … created, suffered, assumed or agreed to or by the Insured claimant.”

Ticor did have a duty to defend under the policy, Judge John Tinder wrote in Home Federal Savings Bank v. Ticor Title Insurance Co., 11-3446. The exclusion relied on the by the District Court to grant summary judgment for Ticor does not apply, the judges ruled, rejecting Ticor’s numerous claims. Ticor argued that Home Federal “created, suffered assumed or agreed to the Wilhelm Lien” because the bank “made the conscious decision not to distribute the remaining loan funds and chose not to pay Wilhelm. It also argued the bank breached a duty to Ticor to distribute the entirety of the loan proceedings and that the “created or suffered” exclusion applies because the bank sought to obtain an inequitable windfall.

The judges ordered summary judgment be entered for Home Federal and for further proceedings on the issue of damages to be awarded to the bank.

 

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  1. First comment on this thread is a fitting final comment on this thread, as that the MCBA never answered Duncan's fine question, and now even Eric Holder agrees that the MCBA was in material error as to the facts: "I don't get it" from Duncan December 1, 2014 5:10 PM "The Grand Jury met for 25 days and heard 70 hours of testimony according to this article and they made a decision that no crime occurred. On what basis does the MCBA conclude that their decision was "unjust"? What special knowledge or evidence does the MCBA have that the Grand Jury hearing this matter was unaware of? The system that we as lawyers are sworn to uphold made a decision that there was insufficient proof that officer committed a crime. How can any of us say we know better what was right than the jury that actually heard all of the the evidence in this case."

  2. wow is this a bunch of bs! i know the facts!

  3. MCBA .... time for a new release about your entire membership (or is it just the alter ego) being "saddened and disappointed" in the failure to lynch a police officer protecting himself in the line of duty. But this time against Eric Holder and the Federal Bureau of Investigation: "WASHINGTON — Justice Department lawyers will recommend that no civil rights charges be brought against the police officer who fatally shot an unarmed teenager in Ferguson, Mo., after an F.B.I. investigation found no evidence to support charges, law enforcement officials said Wednesday." http://www.nytimes.com/2015/01/22/us/justice-department-ferguson-civil-rights-darren-wilson.html?ref=us&_r=0

  4. Dr wail asfour lives 3 hours from the hospital,where if he gets an emergency at least he needs three hours,while even if he is on call he should be in a location where it gives him max 10 minutes to be beside the patient,they get paid double on their on call days ,where look how they handle it,so if the death of the patient occurs on weekend and these doctors still repeat same pattern such issue should be raised,they should be closer to the patient.on other hand if all the death occured on the absence of the Dr and the nurses handle it,the nurses should get trained how to function appearntly they not that good,if the Dr lives 3 hours far from the hospital on his call days he should sleep in the hospital

  5. It's a capital offense...one for you Latin scholars..

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