The Florida Bar
The Florida Bar Journal
December, 2011 Volume 85, No. 10
Now or Then? The Time of Loss in Title Insurance

by Matthew C. Lucas

Page 10

Title insurance may be the least understood form of insurance in the public market. For most, it probably connotes little more than a vague recollection of a charge on a closing statement when buying or selling a home. Even for those who make it a habit of reviewing their insurance policies’ terms, a title policy will likely pose something of a comprehensive challenge. It would seem to function contrary to almost every other means of insuring against risk, and, in fact, that is precisely how it operates, because the risks title insurance covers are those accruing from the past, not in the future.1 This distinction colors a number of unique aspects of title insurance claims arising from a defect or cloud in title and the measure of benefits a policyholder is entitled to under a title policy. It also raises a particularly interesting question concerning valuation. What happens when an insured owner2 discovers after the purchase of a home that he or she does not own the front 30 feet of the property because it had been previously conveyed to neighbors? If the loss is covered and his or her title insurer elects to pay damages, what operative date should be used to measure the claim: When he or she purchased the property and the title policy was issued; when the title problem was created; or when he or she first became aware of the defect? Land valuation, as we have all seen in recent years, is subject to wild vacillations.3 Even a modest span in time could yield a markedly different measurement of benefits for the insured.

Of course, there are a host of variables that necessarily shape a title insurance claim: whether a loss has truly occurred; whether it is covered or excluded; what limits are imposed under the policy, for example, are all subjects of frequent dispute.4 Assuming, however, these issues are resolved so that the partial loss of title is both real and covered under the policy, there remains the problem of measuring the insured’s loss for purposes of a title claim. Pinpointing the extent of an owner’s actual loss can prove especially elusive when there are wide swings in property values over time. This article explores the law that exists on that issue and highlights some of the competing interests that may weigh in its consideration.5 Before proceeding further, it may be helpful to review how title insurance operates and how it came to be a staple component of the vast majority of land transactions in Florida and throughout the United States.

History and Overview of Title Insurance
The 19th century’s aggressive expansion of the American frontiers left a bevy of legal work in its wake. While the federal government had undertaken the laudable task of surveying and describing the physical description of our growing nation’s lands, legal title to all that property was, in many places, something of a morass.6 Mass commoditization of vacant land, wild speculation, squatters, forged deeds, varying and Byzantine distinctions between recognized ownership interests, and fraudulent conveyances on an “epidemic” scale left a mobile population to wonder who really owned the land they were settling7 — all of which spawned lawsuits, occasionally epic lawsuits, for the states’ nascent legal sysems.8 As one writer observed, “[s]ome of the greatest American trials, in terms of cost, time, and acrimony, have been trials over title to land.”9 Thus, the need for some means of protection and a way of mitigating the risk of becoming ensnared in litigation was readily apparent by the latter half of the 19th century.10 To that end, title insurance came into the industry of real estate transactions both to provide assurance to those acquiring or selling property and to foster greater stability in the field of property law in general.11

Today, title insurance generally indemnifies a policy holder of loss from unknown defects in title, as well as against undisclosed liens or claims appearing in the public record.12 Its purpose is, as one court colloquially put it, “to protect a purchaser of real estate against title surprises.”13 A prospective buyer obtains a title commitment that describes the results from a title search performed on the property, pays a one-time premium, and, as part of the closing, will be issued a title insurance policy, often one patterned after a form promulgated by the title insurance industry’s national trade organization, the American Land Title Association (ALTA), with standardized terms of coverage, exceptions, and exclusions.14 When a potential title issue arises — for instance, the lost 30-foot frontage scenario described previously — the landowner submits the claim of loss to his or her insurer, which then investigates the claim and issues a coverage decision.15

Assuming the defect or cloud is a covered loss that has resulted in damages to the claimant, under most ALTA owner’s policies, the title insurer is typically afforded the option of either: 1) tendering the policy’s limits to the insured; 2) curing the defect by negotiating with third parties to clear the cloud in title (i.e., buying the strip of land from the neighbor and conveying it back to the insured); 3) instituting litigation on the insured’s behalf to remove the defect (i.e., suing the neighbor in the insured’s name to recover the frontage); or 4) paying the insured the “actual loss” resulting from the defect (i.e., the loss in value attributable to the lost 30 feet).16 The standard verbiage of this final option typically runs along the following lines: “The liability of the [c]ompany under this policy shall not exceed…the difference between the value of the insured estate or interest as insured and the value of the insured estate or interest subject to the defect, lien or encumbrance insured against by this policy.” Measuring the extent of our hypothetical insured’s actual loss under this policy option would require some means of comparing what the property was worth with the 30 feet of frontage versus its value without it.

This may seem relatively straight-forward, but it can become complicated in application. Ascribing monetary value to any real estate calls for some measure of prediction, one that requires an amalgam of statistics, economics, and a practiced evaluation of real estate data.17 Appraising land values is not ad hoc guesswork, nor is it an exact science, but something more akin to a developed art.18 Apart from this inherent indeterminacy, temporally speaking, an appraisal might determine a current value for a tract of land, or it may look to measure the property’s value on a particular date in the past. Which date should control when measuring a title claimant’s “actual loss” under a policy? Most title policies are silent on this issue.19 The standard ALTA policy calls for a comparison of land values, but does not state when those values should be made. General appraisal standards do not supply an answer to the question either.20 Nor, as it turns out, has the law reached a firm consensus as to which date ought to determine the extent of a covered title loss.

The Three Potential Dates of Measurement
Courts throughout the United States have generally identified three points in time to use to measure damages within a title policy’s limits in connection with an owner’s loss of title: the date of purchase of the property, the date the title defect was created, and the date the defect was first discovered. An overview of each of these approaches and their merits will be considered below.

Date of Purchase — A minority of courts have applied the date of purchase (or, as it is sometimes characterized, the date the policy was issued) to measure an owner’s loss under a title policy, although it is somewhat unclear what the underlying rationale for doing so has been.21

For example, in Beaullieu v. Atlanta Title & Trust Co., 4 S.E.2d 78 (Ga. Ct. App. 1939), a divided Georgia appellate court held that an insured property buyer whose land was encumbered by an undisclosed easement was entitled to recover from his insurer the diminution in the value of his land measured at the time he purchased the property.22 In resolving the issue of valuation, the majority in Beaullieu provided a fairly extensive review of Georgia law, case law from other jurisdictions, and various commentaries surveying the extent of damages available when a seller breaches its warranties to a buyer in the sale of land before equating that measure to the scope of title insurance coverage:

[T]he measure of damage for a breach by an insurer under a policy insuring the title against encumbrances or encroachments is the difference between the value of the property when purchased with the encumbrance or encroachment thereon, and the value of the property as it would have been if there had been no such encumbrance or encroachment.23

There is scarcely any Florida case authority on this subject, but one of our appellate courts may have applied the same measurement for much the same reason. In Hillsboro Cove, Inc. v. Archibald, 322 So. 2d 585 (Fla. 4th DCA 1975), a buyer of a tract of land sued his seller and his title insurer when he discovered, three years after the closing, that a 30-foot strip of the property had been previously conveyed to the purchaser of an adjacent tract. The trial court, rejecting the buyer’s cost to cure measure of damages, instead awarded a diminution measurement that represented the proportionate cost of the lost strip as of the date of the conveyance.24 Affirming the damages judgment, the court in Hillsboro Cove, like the court in Beaullieu, appears to have premised its analysis on a case interpreting the covenant of seisin (the common law warranty from a seller to a buyer that “the grantor has the very estate in quantity and quality which he purports to convey”).25 The court held:

We follow the rule in Burton v. Price, 105 Fla. 544, 141 So. 728 (1932): “The measure of damages is such fractional part of the whole consideration paid as the value at the time of the purchase of the part to which the title failed bears to the whole block purchased, with interest thereon during the time the (appellant) has been deprived of the use of that part to which he could not acquire possession.”26

It is unclear, however, whether Hillsboro Cove provided a definitive ruling on the date of measuring loss for title claims in Florida. Much of the court’s ruling focused on the plaintiff’s breach of seisin award against the seller as opposed to the title claim against his insurer. One could also argue that the ruling ought to be confined to the valuation dispute that was squarely addressed between curative and diminution measurements, not competing dates of measurement. To add to the uncertainty, no other reported title insurance decision in Florida has cited the Hillsboro Cove opinion, favorably or otherwise.

Assuming a Florida court chooses to apply the date of purchase in valuing an owner’s title insurance loss, some further observations would be warranted, beginning with the use of seisin law as a basis for precedent. The covenant of seisin bears a superficial resemblance to the protection title insurance affords its insured customers. In that respect, the projection of a grantor’s common law warranties onto title insurance is perhaps understandable and not without a measure of logic. But their distinguishing features in form and in substance — markedly different bargains, relations, privities, and duties between the parties — would deserve some explication, however minimal, before importing a damage measure from the one vein of law into the other. Absent which, the comparison of a seisin warranty to a title insurance claim remains, as one court summarized, an “oblique analogy.”27

It is still, nonetheless, possible to conceive of justifications for the date of purchase approach. Using the purchase date of valuation imbues a degree of certainty toward resolving what can be, at times, the somewhat ethereal issue of property valuation. It is easily understood and just as easily applied. Moreover, both insured and insurer stand on more or less equal footing with respect to a risk of market fluctuation under this approach. But correspondingly, unless real estate values remain static, one side or the other will also gain or lose something beyond the allocation of costs and risks that title insurance, properly understood, is supposed to cover for an insured’s actual loss. This reallocation of risks carries some consequences, as pointed out by one commentator:

The problem with using the policy date or date of acquisition to measure the value of the land is that the risk of a decline in the land’s market value because of market conditions rightfully belongs to the investor in real estate. A title insurer accepts only the risk of the land’s market value being impacted by a title matter. In a case where the value of the land decreased due to market conditions unrelated to the title defect, requiring the title insurer to pay loss based on the value of the land on the policy date would assign to the title insurer the risk the real estate investor assumed. Conversely, utilizing the policy date could unduly benefit the title insurer when the land increased in value either due to a rising real estate market or to the insured’s development efforts. In those situations, if the title insurer pays only the value of the land on the policy date, then the title defect essentially deprived the insured of the gain the insured otherwise would have earned.28

This may overstate the matter to some extent, since the “risk” of appreciation, such as it is, ordinarily has a very clear and prominent contractual boundary within an owner’s title policy. Like other forms of insurance, most owner title policies contain express limits commensurate with the purchase price of the property, capping the extent of the insured’s recovery under a covered title claim to what he or she paid for the property. But in circumstances where there is only a partial title failure (such as the lost 30-foot frontage), or where a covered loss falls somewhere below the policy limit, deciding when that loss should be valued is still vitally important in terms of defining an insured’s recovery. Given the prevalent silence on this point under most title policies, applying a policy date of valuation could still effectively impose an unbargained cost on either one of the parties to the policy.

Date of Defect Creation — A second approach to measuring actual loss for a title claim has been to utilize the time when the insured defect, cloud, or encumbrance was created as the point of valuation. Because defects in title may come about through a variety of means, however, “date of creation” is a term of measurement with potentially multiple meanings. In some instances, the underlying acquisition of property burdened by an insured encumbrance has been treated as the functional equivalent of the act creating the defect, so that the date the insured purchased the property becomes the effective point of measurement.29 When applied in this manner, the date of creation reaches the same destination — with the same attendant considerations — as the date of purchase approach, just by a slightly more circuitous route.

More frequently under this approach, the date a title defect is deemed created is the date that a tribunal declares its existence or extent.30 One such example is the case of Fohn v. Title Insurance Corp. of St. Louis, 529 S.W.2d 1 (Mo. 1975), in which out-of-town developers found themselves embroiled in a lawsuit over a vacant parcel of land they had purchased.31 The developers were in the process of removing commercial signage from the property only to discover that two sign owners held a deed to half an acre of the tract’s valuable frontage, a claim the owners were prepared to enforce by suing and then successfully enjoining the developers.32 After the sign owners prevailed at trial, the developers sued their title insurer, at which point the issue of valuation for the lost frontage came to the forefront. Through investment in the property, or a fortuitous market, or some combination of variables, by the time the disputed title to the frontage had been adjudicated against the developers, the overall tract had appreciated nearly tenfold from the original purchase price, a market increase which presumably increased the value of the insured frontage as well.33 Faced with this choice of valuation dates — the date of the original purchase or the date of the adjudication — the Fohn court affirmed the latter, substantially higher valuation of when the final judgment had been entered against the developers.

Interestingly, the Fohn court seemed persuaded not so much from any normative legal justification as it was by the absence of a compelling argument not to use the greater value.34 As the court observed: “The extent of plaintiffs’ bargain becomes obvious but there is no issue in this case which compels us to reject their right to the benefit thereof.”35 And since “the insurance policy [did] not relate any amount recoverable for loss . . . to the purchase price of the property,” the court in Fohn saw no reason to apply a lower measurement to the detriment of an insured that had been “totally abandoned by his insurer.”36 Perhaps the court’s justification leaves something to be desired analytically, but the prior judgment date of measurement used in Fohn at least gives a replicable application for measuring title claims when the claim is dependent on first resolving an underlying title dispute (which can be a complicated and time-consuming legal proceeding). Such a measure offers advantages, but also raises some concerns.

Here as well, this date of measurement, like the date of purchase, provides a clear reference for valuation that is readily determinable. Utilizing the findings from prior proceedings, such as the trial court did in Fohn, likely promotes judicial and litigation economies as well. The court hearing the title claim and deciding whether or to what extent an insured encumbrance exists will have the benefit of a “concrete demonstration” of the extent of the insured’s loss.37 However, when the dates of purchase and creation are both identical and identically ascertained, the latter measure shares the shortcomings of the former. Market risks that have little to do with the actual contract of insurance could indirectly find their way into the policy’s measurement of benefits and become imposed on an unwilling party.

Date of Discovery — The final temporal measurement considered is the one that has come to be the most widely accepted. Frequently, when faced with the question of when to value an owner’s covered title insurance loss, courts have adopted the date the insured owner first discovered or became aware of the title defect as the operative time period to measure damages.38 In most cases, such a discovery will occur when an owner attempts to resell his or her property or obtain some kind of financing; thus, this date often corresponds to the time when a title defect actually impacts an owner’s plans to use or dispose of the insured property.39

By far, the most comprehensive overview of this approach is found in Hartman v. Shambaugh, 630 P.2d 758 (N.M. 1981). In that case, the New Mexico Supreme Court was confronted with an issue of first impression as to when to measure an owner’s claim of loss of an acre of insured property.40 The court began its analysis by first explaining why a comparison in values of the entire property — as opposed to simply determining the proportionate value of the lost acre — was the proper formula for determining loss under a title insurance claim where the property is developed or if the loss would, in any way, disproportionately affect the remaining tract.41 Turning then to the question of timing, it went on to canvass the case law applying various approaches, beginning with the date of purchase valuation. Here the court was clearly unimpressed. Of the reported decisions using a date of purchase to measure title loss, Hartman noted, not one offered any reasoning or persuasive authority for doing so.42

On the other hand, the court found that using the date the defect was discovered as a baseline for valuation provided a proper balance between the terms of the owner’s policy and the relative expectations of the insurer and insured. Quoting from a California appellate decision, the Hartman court held:

When a purchaser buys property and buys title insurance, he is buying protection against defects in title to the property. He is trying to protect himself then and for the future against loss if the title is defective. The policy necessarily looks to the future. It speaks of the future.… The insured, when he purchases the policy, does not then know that the title is defective. But later, after he has improved the property, he discovers the defect. Obviously, up to the face amount of the policy, he should be reimbursed for the loss he suffered in reliance on the policy, and that includes the diminution in value of the property as it then exists, in this case with improvements. Any other rule would not give the insured the protection for which he bargained and for which he paid.43

Hartman also applied an important caveat to this measurement: An insured who sits idly by after discovering a title defect cannot recover any appreciation in the property’s value from his insurer after making the discovery.44 In those instances in which the insured does nothing to resolve the title problem after its discovery and the property value continues to rise, “he should not be allowed to reap any benefit by his inactivity.”45

Beyond fulfilling the parties’ reasonable expectations, commentators have identified other advantages to the date of discovery approach. For example, when applied to property appreciating in value, this measure provides the insured with a full recovery for a loss (subject, of course, to the policy’s limits) that include both economic and consequential damages.46 During periods of depreciation, it encourages vigilance, since an insured owner risks diminishing his or her recovery from a covered loss by not promptly identifying it to the insurer. For the majority of title claims, the span in time between the issuance of the policy and the discovery of an insured loss will be relatively brief, perhaps at most a few years, since “as time passes, there is the increasing likelihood of defects being cured by statutes of limitations, adverse possession and prescription,”47 meaning that any variation in values between the date of purchase and the date of discovery will likely be modest in most cases. And perhaps most notably, a predominant number of jurisdictions are adopting the date of discovery as the operative measurement of loss for owners’ title claims.48

That is not to say there are no drawbacks with this approach, one of which is its indeterminacy. Unlike with the dates of purchase or creation, the actual date a defect was discovered may be far from clear. Fixing the point in time when an owner first discovered a cloud in title brings the same dimension of disputed facts frequently seen in statute of limitations challenges.49 Valuation of the claim could hinge on such relatively vague reflections as a particular owner’s awareness or diligence about his or her insured property. As with the date of purchase and date of creation measurements, then, computing the value of an actual loss under this method poses some challenges.

Title insurance policies have come a long way since the industry’s beginnings toward defining and clarifying the title risks inherent in real estate transactions. Yet, market changes in land value, particularly over time, can still play a pivotal role in determining the extent of a title claim for a covered loss. Using one point in time over another when measuring an insured’s actual loss raises several issues that remain unresolved today. Each of the approaches reviewed — the dates of purchase, creation, and discovery — account for those issues in different ways. Meanwhile, it will fall to the courts to reach their own conclusions as to when an owner’s claim ought to be measured.

1 See Livingston v. American Title & Ins. Co., 133 So. 2d 483, 486 (Fla. 1st D.C.A. 1961) (“While most insurance is protection against future occurrences such as fire, storm or accident, title insurance as customarily written is protection against future loss because of past events unknown to or misjudged by the insurer and the insured but which may come to light and deprive the insured of the enjoyment of property.”).

2 Title insurance is not limited to protecting property owners (mortgagees, for example, typically procure title insurance in connection with giving a secured loan), however, this article will concentrate on owner policies, recognizing the “significant difference” in what constitutes loss or damage from a title defect under a mortgagee policy versus an owner’s policy. See CMEI, Inc. v. American Title Ins. Co., 447 So. 2d 427, 427-28 (Fla. 5th D.C.A. 1984).

3 Reviewing the S&P/Case-Shiller U.S. National Home Price Index, home prices increased more or less exponentially nationwide from 1996 until 2006 only to fall precipitously for the next two years, briefly regain some ground in 2009, and then resume falling again from 2010 onward. Indeed, in the first quarter of 2011 alone, home values nationwide declined nearly five percent. See S&P Indices Press Release, May 31, 2011, available at

4 See generally Jerel J. Hill & Thomas R. McGrath, Recent Developments in Title Insurance Law, 40 Tort Trial & Ins. Prac. L. J. 795 (2005) (collecting reported case decisions of various title insurance disputes).

5 The focus here, confined as it is to a discrete issue of measuring an insured loss, necessarily assumes that a cloud in title is, in fact, covered and insured and results in actual damages to an insured owner.

6 Lawrence H. Friedman, A History of American Law 167-77 (3d ed. 2001).

7 Id. at 176.

8 In Florida alone, just on the discrete issue of resolving land grants of the state’s former sovereigns, the U.S. Supreme Court issued no less than 50 opinions between 1832 and 1926. See Glenn Boggs, Florida Land Titles and British, not Just Spanish, Origins, 81 Fla. B. J. 23, Addendum (July 2007).

9 Friedman, A History of American Law at 177.

10 See Quintin Johnson, Title Insurance, 66 Yale L. J. 492 (1957).

11 Indeed, one writer posited that a Pennsylvania Supreme Court decision, Watson v. Muirhead, 57 Pa. 161 (Pa. 1868) (holding that a non-negligent error in title based on an attorney’s opinion precluded award of compensation for the purchaser), was the impetus behind the creation of the title insurance industry in the United States. See Barlow Burke, Law of Title Insurance §1.01, at 1-3 (3d ed. supp. 2003). See also Abraham Bell & Gideon Parchomovsky, A Theory of Property, 90 Cornell L. Rev. 531, 552 (2005) (arguing that a property system that promotes stable rights “increases the value of assets to users (now owners) and decreases the costs of obtaining and defending those assets”).

12 See Fla. Stat. §627.784 (“A title insurance policy or guarantee of title may not be issued without regard to the possible existence of adverse matters or defects of title.”); Morton v. Attorneys’ Title Ins. Fund, Inc., 32 So. 3d 68, 71 (Fla. 2d D.C.A. 2009); Lawyers Title Ins. Co. v. Synergism One Corp., 572 So. 2d 517, 518 (Fla. 4th D.C.A. 1990). For a succinct overview of how a typical title policy is created and issued, see Amy W. Beatie & Arthur R. Kleven, The Devil in the Details: Water Rights and Title Insurance, 7 U. Denv. Water L. Rev. 381, 395-400 (2004).

13 Nourachi v. First American Title Ins. Co., 44 So. 3d 602, 606 (Fla. 5th D.C.A. 2010) (citing Commonwealth Land Title Ins. Co. v. Ozark Global, L.C., 956 F. Supp. 989 (S.D. Ala. 1997)).

14 Beatie & Kleven, note 12; Johnson, note 10, at 497.

15 Real Estate Inv. Group, LLC v. Attorneys’ Title Ins. Fund, Inc., 47 So. 3d 868, 871 (Fla. 3d D.C.A. 2010) (Cope, J., concurring).

16 See Joyce Palomar, 1 Title Insurance Law §§10:2, 10:2.1-2.3, and 10:8 (2008). Often, the policy is worded so that the actual delineation of “options” is between payment of “the amount of insurance” (which is then defined separately to be the lesser of the policy limits or the difference in value) or payment or settlement with third parties or the insured.

17 A cottage industry of professional real estate appraisal has flourished in Florida with over 7,500 certified appraisers licensed through the Department of Business and Professional Regulation evaluating and assessing land values for a variety of real estate transactions. See Florida Department of Business & Professional Regulation, Licensee Numbers, (reporting from Florida Real Estate Appraisal Board on 5,514 certified residential appraisers and 2,344 certified general appraisers as of September 10, 2010).

18 See, e.g., National Environmental Policy Act (NEPA) Implementation Procedures, 74 Fed. Reg. 63407, 63408 (Dep’t of Interior 2009) (noting that land valuations “can be highly subjective and land appraisals are understood to represent an art, not a science”); Andrew W. Schwartz, Reciprocity of Advantage: The Antidote to the Antidemocratic Trend in Regulatory Takings, 22 UCLA J. Envtl. L. & Pol’y 1, 68 (2004) (“An appraisal is an opinion of value, rather than a scientific measuring process.”). That said, real estate appraisals are certainly not standardless either; under Fla. Stat. §475.628 and Administrative Code §61J1-9.001, licensed appraisers must comply with a published set of guidelines, the Uniform Standards of Professional Appraisal Practice (USPAP), when rendering an appraisal of property value.

19 With the exception of situations in which a title insurer chooses to pursue litigation to defend or clear its insured’s title, ALTA’s promulgated form policies do not fix a date of valuation. Palomar, 1 Title Insurance Law at §10:13.

20 See USPAP Statement on Appraisal Standards No. 3 (2010-11) (“Three categories of effective dates — retrospective, current, or prospective — may be used, according to the intended use of the appraisal assignment.”).

21 See Citicorp. Sav. of Illinois v. Stewart Title Guar. Co., 840 F.2d 526 (7th Cir. 1988); Security Union Title Ins. Co. v. RC Acres, Inc., 604 S.E.2d 547, 551 (Ga. Ct. App. 2004); Securities Service, Inc. v. Transamerica Title Ins. Co., 583 P.2d 1217 (Wash. Ct. App. 1978); Southern Title Guaranty Co. v. Prendergast, 478 S.W.2d 806 (Tex. App. 1972); Glyn v. Title Guarantee & Trust Co., 132 A.D. 859 (N.Y. App. Div. 1909).

22 Beaullieau, 4 S.E.2d at 81. Interestingly, the dispute between the formulas proffered by the parties in Beaullieu appeared to have had less to do with timing, and more to do with the computation of the value itself: The insured argued for the fair market value ($15,000) of his property at the time of purchase; the insurer contended the appropriate starting measure was the contract sale price ($8,000). Id. at 80.

23 Id. at 81. The Beaullieu court then reiterated the rule by quoting from the Glyn opinion, which had relied on an earlier breach of warranty decision.

24 Hillsboro Cove, 322 So. 2d at 586.

25 Allard v. Al-Nayem International, Inc., 59 So. 3d 198, 199-200 (Fla. 2d D.C.A. 2011), quoting Burton v. Price, 141 So. 728 (Fla. 1932); Harris v. Sklarew, 166 So. 2d 164, 165 n.2 (Fla. 3d D.C.A. 1964).

26 Id. See also Burton v. Price, 141 So. 728 (Fla. 1932) (providing measure of damages in breach of covenant of seisin). The Hillsboro Cove court also found specific language within the policy — to the effect that the damages could not exceed the lost strip’s proportionate value to the value of the entire property — further supported the limited award against the title insurer.

27 See Hartman v. Shambaugh, 630 P.2d 758, 762 (N.M. 1981).

28 Palomar, 1 Title Insurance Law §10:13 (2008).

29 Id. at §10:13 (citing In re Gordon, 176 A. 494 (Pa. 1935)).

30 Beaullieu v. Atlanta Title & Trust Co., 4 S.E.2d 78 (Ga. Ct. App. 1939); Fidelity Union Cas. Co. v. Wilkinson, 94 S.W.2d 763 (Tex. Civ. App. 1936).

31 Fohn, 529 S.W.2d at 2-3.

32 Id. at 2. The developers’ title insurer refused to defend them in the original lawsuit with the sign owners, a point the Missouri Supreme Court would later mark with the strongest disapproval. Id. at 6 (“[I]t would be difficult to conceive of an insured being more totally abandoned by his insurer than occurred in this case.”).

33 Id. at 5.

34 Id.

35 Id.

36 Id. at 5-6.

37 In re Gordon, 176 A. at 497.

38 See Allison v. Ticor Title Ins. Co., 907 F.2d 645 (7th Cir. 1990); Hartman v. Shambaugh, 630 P.2d 758 (N.M. 1981); Kentucky Title Co. v. Hail, 292 S.W. 817 (Ky. 1927); Swanson v. Safeco Title Ins. Co., 925 P.2d 1354 (Ari. Ct. App. 1995); Miller v. Title, U.S.A., Inc. Ins. Corp. of N.Y., 1991 WL 24537 (Tenn. Ct. App. 1991) (unpublished); Jalowitz v. Ticor Title Ins. Co., 478 N.W. 2d 67 (Wis. Ct. App. 1991) (Table); Miebach v. Safeco Title Ins. Co., 743 P.2d 845 (Wash. Ct. App. 1987); Happy Canyon Inv. Co. v. Title Ins. Co. of Minnesota, 560 P.2d 839 (Colo. Ct. App. 1976); Overholtzer v. Northern Counties Title Ins. Co., 253 P.2d 116 (Cal. Ct. App. 1953); Narberth Bldg. & Loan Ass’n v. Bryn Mawr Trust Co., 190 A. 149 (Pa. Super. Ct. 1937).

39 See Barlow Burke, Law of Title Insurance §7.04 (2010).

40 Hartman, 630 P.2d at 762.

41 Id.

42 Id. at 762-63.

43 Id. at 763 (quoting Overholtzer, 253 P.2d at 125).

44 Id. Standard ALTA policies also include an express provision requiring insureds to provide prompt notice of any title defects or risk losing coverage for those claims.

45 Id.

46 Burke, Law of Title Insurance §7.04 (2010).

47 Johnson, Title Insurance, 66 Yale L. J. at 501.

48 Burke, Law of Title Insurance §7.04 (2010).

49 See, e.g., Thomas v. Lopez, 982 So. 2d 64, 67 (Fla. 5th D.C.A. 2008) (describing “discovery rule” and actual and constructive means of knowledge that could constitute discovery); Haskins v. City of Ft. Lauderdale, 898 So. 2d 1120 (Fla. 4th D.C.A. 2005) (finding that civil claim for invasion of privacy commenced when police officers searched plaintiff’s handbag, not when criminal court subsequently ruled the search was illegal); Snyder v. Wernecke, 813 So. 2d 213, 217 (Fla. 4th D.C.A. 2002) (collecting cases regarding when statute of limitations for construction claims commences, upon discovery of a physical defect or when the source of the defect could be determined).

Matthew C. Lucas is a county court judge in Tampa assigned to the civil division. He is board certified in business litigation law and received his J.D., with honors, from the University of Florida, Levin College of Law.

[Revised: 02-10-2012]