COA affirms for title company in land purchase dispute

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A complaint against a title company and its underwriter that was dismissed without an opportunity to amend was properly thrown out despite an error, the Court of Appeals of Indiana has affirmed.

The dismissal involves Springbrook Village Batesville LLC, which entered into a contract with members of the Nobbe family for the purchase of 60 acres of land located in Franklin County. The contract was scheduled to commence in March 2018 and close in August 2020.

With the permission of the family, in December 2018, Springbrook assigned the contract to Eunoia Development Group LLC.

Meanwhile in November 2018, Springbrook and Margaret Mary Community Hospital had entered a contract whereby the hospital would purchase 14½ acres of the 60-acre parcel. However, the purchase agreement did not close and expired by its terms.

Then on April 1, 2019, after the purchase agreement’s expiration, the hospital filed a memorandum of purchase agreement with the recorder’s office in Franklin County. Subsequently, the hospital and the Nobbes entered into a purchase agreement for the entire 60-acre parcel.

Southeast Indiana Title Inc. was hired to conduct the title search and handle the closing. Chicago Title Company Inc. underwrites the title policies for S.E. Title.

On June 4, 2019, S.E Title issued a preliminary title commitment to the hospital that did not include the April 1 memorandum of purchase agreement. The commitment stated that it “excludes coverage for any loss resulting from a contractual relationship and or litigation between Springbrook Village [] and/or [Eunoia] against [the Hospital] and the sellers.” The hospital then filed a termination and release of memorandum of purchase agreement.

Later that month, Springbrook sent the hospital a letter informing it that Springbrook had an existing purchase agreement with the Nobbe family for the 60-acre parcel of land. The next day, the hospital sent the letter to S.E. Title.

The purchase agreement between the hospital and the Nobbes closed the same day, and the family conveyed the 60-acre parcel to the hospital via warranty deed, which was recorded.

Chicago Title then issued the hospital its final policy of title insurance, and the hospital filed a complaint to quiet title against Springbrook in the Franklin Circuit Court. Eunoia filed a counterclaim against the hospital.

Then in June 2021, Springbrook filed a complaint for damages in Marion Superior Court against both S.E. Title and Chicago Title, alleging three counts of negligent representation. Both S.E. Title and Chicago Title subsequently filed motions to dismiss Springbrook’s complaint under Trial Rule 12(b)(6).

After a hearing, the trial court dismissed the complaint with prejudice.

Finding no reversible error, the Court of Appeals affirmed for the appellees-defendants on Thursday, although it did determine the trial court erred by dismissing with prejudice without an opportunity to amend.

But according to the COA, Springbrook did not show on appeal how it would amend its complaint to avoid a 12(B)(6) dismissal. Thus, Springbrook failed to demonstrate prejudice, and the error was harmless.

The COA then found there was no error in dismissing the negligence claim against S.E.

“We conclude that after balancing the relationship between the parties, the foreseeability of harm; and public policy concerns, S.E. Title did not owe Springbrook a duty of care,” Judge Margret Robb wrote. “Therefore, Springbrook’s negligence claim against S.E. Title must fail.”

Also, the COA found the trial court didn’t err in dismissing the complaint’s negligent misrepresentation counts, finding S.E. Title and Chicago Title did not owe Springbrook a public duty.

Finally, the appellate court concluded the trial court didn’t err in dismissing Springbrook’s in concert liability claims.

“Here we have already determined that neither S.E. Title nor Chicago Title owed Springbrook a duty of care and therefore were not negligent,” Robb wrote. “Therefore, following the rule for Section 876(b) as outlined in (Hellums v. Raber, 853 N.E.2d 143 (Ind. Ct. App. 2006)), neither appellee is liable under a theory of in concert liability.”

The case is Springbrook Village Batesville LLC, and Eunoia Development Group LLC v. Southeast Indiana Title Inc., Douglas C. Amberger and Chicago Title Company Inc., 21A-CT-2603.

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