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Title Insurance Company Fails to Pay

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  • 01-13-2010, 08:27 PM
    rowguy123
    Title Insurance Company Fails to Pay
    The Title Insurance Company agreed that there was a defect in title, assigned lawyers to defend the case, and ordered an appraisal for damages. The Appraisal was ordered by the Title Company (and they paid for it and instructued the appraiser how the appraisal was to be done). We reached settlement terms w/ the neighbor that was causing the defect in title to avoid further litigation. Now the Title Insurance Company refuses to pay the settlement amount per the appraisal & is forcing us to go to court against the neighbor. Is this fraud / bad faith / breach of contract by the Title Company?
  • 01-14-2010, 06:23 AM
    mudpie
    Re: Title Insurance Company Fails to Pay
    On the surface it suggest bad faith. Did you sign any title changes to clear the defect? If not, don't until you have a check in hand. IMO, I would call the state insurance commission and file a complaint against the title company and seek an attorney.

    If you win you may end up with more that negotiated because of the alleged bad faith.

    You should also have gotten your own independent appraisal to verify.

    You should at least speak to an experienced real estate attorney.
  • 01-14-2010, 06:46 AM
    Mr. Knowitall
    Re: Title Insurance Company Fails to Pay
    I'm not sure exactly what is happening. Are you stating that you tried to bypass your lawyer and the title insurance company and settle the case yourself, and that they're not willing to accept the terms of the settlement you unilaterally attempted to negotiate?
  • 01-14-2010, 07:19 AM
    rowguy123
    Re: Title Insurance Company Fails to Pay
    The lawyer that the Title Company appointed to represent me negotiated the settlement, drafted documents, and advised the Title Company of our strategy. All this was done to avoid going to litigation. We even had a court conference and the judge "seemed pleased" that we were able to come to terms. The only thing holding us up is the TC paying us for damages that they themselves determined.

    I have contacted the fraud division of the state insurance department and await their response - I understand it takes some time. I also contacted the BBB. Pretty soon I'm considering going to the press to expose them. Other than that, I haven't signed anything as I don't want to do that until I get a reasonable offer from them in writing. We are not disputing the amount that they came up for the damages that they assessed although we believe that only covers part of the damages.
  • 01-14-2010, 08:16 AM
    Mr. Knowitall
    Re: Title Insurance Company Fails to Pay
    We still lack the information to know what is going on. For example, the insurance company may be defending under a reservation of rights. Without knowing the relevant facts, our guessing won't help you. Talk to your lawyer.
  • 01-14-2010, 09:45 AM
    rowguy123
    Re: Title Insurance Company Fails to Pay
    Thanks for your feedback. I'll definitely talk w/ my lawyer but it doesn't sound as if they are denying coverage, they just don't want to pay the amount & don't give a reason.
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