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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. A traditional parade of attorneys? Really Evansville? Y'all need to get out more. When is the traditional parade of notaries? Nurses? Sanitation workers? Pole dancers? I gotta wonder, do throngs of admiring citizens gather to laud these marching servants of the constitution? "Show us your billing records!!!" Hoping some video gets posted. Ours is not a narcissistic profession by any chance, is it? Nah .....

  2. My previous comment not an aside at court. I agree with smith. Good call. Just thought posting here a bit on the if it bleeds it leads side. Most attorneys need to think of last lines of story above.

  3. Hello everyone I'm Gina and I'm here for the exact same thing you are. I have the wonderful joy of waking up every morning to my heart being pulled out and sheer terror of what DCS is going to Throw at me and my family today.Let me start from the !bebeginning.My daughter lost all rights to her 3beautiful children due to Severe mental issues she no longer lives in our state and has cut all ties.DCS led her to belive that once she done signed over her right the babies would be with their family. We have faught screamed begged and anything else we could possibly due I hired a lawyer five grand down the drain.You know all I want is my babies home.I've done everything they have even asked me to do.Now their saying I can't see my grandchildren cause I'M on a prescription for paipain.I have a very rare blood disease it causes cellulitis a form of blood poisoning to stay dormant in my tissues and nervous system it also causes a ,blood clotting disorder.even with the two blood thinners I'm on I still Continue to develop them them also.DCS knows about my illness and still they refuse to let me see my grandchildren. I Love and miss them so much Please can anyone help Us my grandchildren and I they should be worrying about what toy there going to play with but instead there worrying about if there ever coming home again.THANK YOU DCS FOR ALL YOU'VE DONE. ( And if anyone at all has any ideals or knows who can help. Please contact (765)960~5096.only serious callers

  4. He must be a Rethuglican, for if from the other side of the aisle such acts would be merely personal and thus not something that attaches to his professional life. AND ... gotta love this ... oh, and on top of talking dirty on the phone, he also, as an aside, guess we should mention, might be important, not sure, but .... "In addition to these allegations, Keaton was accused of failing to file an appeal after he collected advance payment from a client seeking to challenge a ruling that the client repay benefits because of unreported income." rimshot

  5. I am not a fan of some of the 8.4 discipline we have seen for private conduct-- but this was so egregious and abusive and had so many points of bad conduct relates to the law and the lawyer's status as a lawyer that it is clearly a proper and just disbarment. A truly despicable account of bad acts showing unfit character to practice law. I applaud the outcome.

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