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Marcantel v. Stewart Title Guaranty Co.

United States District Court, D. Utah

March 30, 2018

CURT A. MARCANTEL, an individual, Plaintiff,
v.
STEWART TITLE GUARANTY COMPANY, a Texas corporation, COALITION TITLE AGENCY, INC., a Utah corporation, MICHAEL AND SONJA SALTMAN FAMILY TRUST, an entity MICHAEL A. SALTMAN, an individual, and SONJA SALTMAN, an individual, Defendants.

          MEMORANDUM DECISION GRANTING COALITION TITLE COMPANY'S MOTION FOR SUMMARY JUDGMENT

          Dustin B. Pead, Magistrate Judge

         INTRODUCTION

         The parties consented to this court's jurisdiction under 28 U.S.C. § 636(c). (ECF No. 20). The case is before the court on Defendant Coalition Title Company's (“Coalition”) Motion for Summary Judgment. (ECF No. 66). The Motion is fully briefed, including Plaintiff Curt A. Marcantel's (“Marcantel”) response to Coalition's evidentiary objection, and Coalition's response to Marcantel's evidentiary objection. See (ECF Nos. 67-70, 72). The court did not hear oral argument.

         STANDARD OF REVIEW

         A “court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “A party asserting that a fact . . . is genuinely disputed must support the assertion by . . .

         citing to particular parts of materials in the record.” Id. 56(c)(1)(A). “A dispute is genuine when a reasonable jury could find in favor of the nonmoving party on the issue.” Macon v. United Parcel Serv., Inc., 743 F.3d 708, 712 (10th Cir. 2014). In conducting its review, the court must view the evidence and draw reasonable inferences from that evidence in the light most favorable to the non-moving party. Id.

         FACTS

         In February 2015 Coalition assisted Defendant Stewart Title Guaranty Company (“Stewart Title”) to issue a commitment for title insurance related to a parcel of real property Marcantel purchased. (ECF No. 67 at 2, 4-5). Coalition acted in two roles during the transaction: first, as an escrow agent for the real estate purchase and second, as an agent of Stewart Title who issued the title-insurance commitment, updated commitment, and policy. (Id. at 7). The title-insurance commitment and updated commitment contain disclaimers indicating those documents are not abstracts of title. (Id. at 9, 10). Marcantel did not ask Coalition to prepare an abstract of title. (Id. at 8). Coalition did not prepare, or agree to prepare, an abstract of title. (Id. at 8, 11).

         The escrow-closing instructions contain the only evidence of a written agreement between Marcantel and Coalition. (Id. at 8). Coalition did not assume the role of title abstractor under the terms these instructions. (Id.) Marctantel does not suggest Coalition failed to comply with any escrow instruction.

         Marcantel contends he and Coalition had conversations that gave rise to additional duties beyond escrow agent and agent of Stewart Title.[1] The parties agree that Coalition initially identified an encumbrance resulting from a sanitary sewer easement recorded in January 2001. Coalition excluded that encumbrance from coverage in the initial title-insurance commitment. (ECF No. 67 at 5; ECF No. 35 at 10). Marcantel called Coalition to discuss the exclusion from the title policy related to the January 2001 sewer easement. (ECF No. 67 at 5; ECF No. 35 at 10). He also claims he told Coalition he did not want to purchase the property if it was burdened by a sewer easement.[2] Subsequently, Coalition and Stewart Title discovered the January 2001 sewer easement did not burden the property Marcantel purchased, but instead burdened a different property. (ECF No. 67 at 5-6; ECF No. 35 at 10). Accordingly, the exclusion for the 2001 sewer easement was removed and an updated commitment for title insurance issued. (ECF No. 67 at 9- 10); (ECF No. 35 at 10). Marcantel asserts that while he was discussing the sewer easement issue with Coalition, an agent of Coalition told Marcantel “there were no sewer easements burdening the Property.” (ECF No. 68, Ex. 1). Coalition disputes this statement (ECF No. 69, Ex. 2), but the court will treat accept it as true for purposes of this motion. While the 2001 sewer easement apparently did not encumber the property Marcantel purchased, another rogue sewer easement did burden the property; but that second easement was not discovered until after Marcantel purchased the property. See (ECF No. 69 at 5); (ECF No. 35 at 10-13).

         ANALYSIS

         Coalition contends it is entitled to summary judgment because it acted only as a title insurer and Utah law excuses title insurers from tort liability even if their title research contains errors. (ECF No. 66 at 11-14). Coalition contends it cannot be held liable for errors stemming from its title research because its research was undertaken in the course of assisting Stewart Title to issue title insurance and Utah law precludes tort claims against title insurers for their title research and statements made regarding title. (Id. at 11). Coalition further argues that it did not agree to accept the role of title abstractor while preparing and issuing the commitment for title insurance. (Id. at 12-13). This distinction is material because title abstractors may be held liable for errors related to defective title research, but title insurers may not be held liable for such errors. (Id.)

         Marcantel contends the court cannot answer the fact-intensive question of whether Coalition owed a duty at the summary-judgment stage. (ECF No. 67 at 16-22). Next, Marcantel concedes Utah tort law does not impose tort liability on a title insurer for omitting an encumbrance from a title insurance commitment or policy. Nonetheless, he contends Coalition undertook additional duties when it discussed the 2001 sewer easement with Marcantel and told him “there were no sewer easements burdening the Property.” (ECF No. 68, Ex. 1); see (ECF No. 67 at 23).

         I. Coalition is entitled to summary judgment because title insurers may not beh ...


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