ILNews

Title insurer had duty to defend

Back to TopCommentsE-mailPrintBookmark and Share

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.

 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Thanks for this article. We live in Evansville, IN and are aware of how bad the child abuse is here. Can you please send us the statistics for here in Vanderburgh, County. Our web site is: www.ritualabusefree.org Thanks again

  2. This ruling has no application to Indiana. The tail end of the article is misleading where it states criminal penalties await those who refuse a test. This is false. An administrative license suspension is what awaits you. No more, no less.

  3. Yellow journalism much??? "The outcome underscores that the direction of U.S. immigration policy will be determined in large part by this fall's presidential election, a campaign in which immigration already has played an outsized role." OUTSIZED? by whose standards? Also this: "In either case, legal challenges to executive action under her administration would come to a court that would have a majority of Democratic-appointed justices and, in all likelihood, give efforts to help immigrants a friendlier reception." Ah, also, did you forget an adjective at the *** marks ahead by any chance? Thinking of one that rhymes with bald eagle? " In either case, legal challenges to executive action under her administration would come to a court that would have a majority of Democratic-appointed justices and, in all likelihood, give efforts to help *** immigrants a friendlier reception."

  4. Definition of furnish. : to provide (a room or building) with furniture. : to supply or give (something) to someone or something. : to supply or give to (someone) something that is needed or wanted. Judge Kincaid: if furnish means provide, and the constitution says the provider in a uni is the township, how on earth are they seperated??

  5. I never filed a law suite. I had no money for a lawyer. In 2010 I presented for MRI/with contrast. The technician stuck my left arm three times with needle to inject dye. I was w/out O2 for two minutes, not breathing, no ambulance was called. I suffered an Embolism ,Myocardia infarction. Permanent memory loss, heart damage. After the event, I could not remember what I did five seconds earlier. I had no-one to help me. I lost my dental hygiene career, been homeless, etc.

ADVERTISEMENT