Update (December 17, 2012): In Mattson Ridge v. Clear Rock Title, the Minnesota Supreme Court declined to hold a title insurer liable for damages in excess of policy limits when it wrongfully denied coverage. The Court did, however, stick the title insurer with a whopping bill: One over 100 times greater than it would have been if the title insurer had simply honored its policy.
I usually focus my posts on Minnesota real estate disputes, but I’ll make an exception if I sense a budding national trend. The trend in this case is that, more and more, title insurers are denying lender’s claims on the basis of the lender’s unwillingness to provide underwriting information to the insurer. In a case of first impression, the Sixth Circuit recently rejected this trend.
Update (November 27, 2012): The Minnesota Supreme Court has accepted Big Lake for review.
Original Post (September 8, 2012): In Big Lake Lumber v. Security Property Investments, Inc. et. al, the Minnesota Court of Appeals ruled that a contractor’s mechanics lien can take priority over a previously-recorded mortgage only if the contractor’s work related back to “one continuous project of improvement” that started before the mortgage was recorded. Logic would have it that the construction of a house, starting with excavation and continuing through completion, would constitute one continuous project. Not so, says the Minnesota Court of Appeals.
In a case of first impression in Minnesota, District Court Judge Ann Montgomery ruled on an important question in title insurance circles: When is a lender’s loss under a title insurance policy measured? This decision, in Associated Bank v. Stewart Title, is important (and worth watching for appeals) not only because it is the first Minnesota case to address the question, but also because other jurisdictions have answered the same question differently.
Update (August 2, 2012): The Minnesota Supreme Court knocked a blow to mom and pop organic farmers yesterday in its ruling in Johnson v. Paynesville Farmers Union Coop. The Court disagreed with the Minnesota Court of Appeals, and affirmed the trial court’s ruling that pesticide overspray does not constitute trespass in Minnesota.