Source: http://kirschenbaumesq.com/article/grimsey-v-lawyers-title-ins-corp-38-ad2d-572-328-nys2d-474-nyad-2-dept-dec-13-1971
Timestamp: 2019-04-18 21:07:43+00:00

Document:
Property Actions and Proceedings Law § 1501 et seq.
Actions and Proceedings Law § 1501 et seq.
Proceedings Law § 1501 et seq.; CPLR 8302(a), par. 3.
and Proceedings Law § 1501 et seq.
Winoker, New York City, of counsel.
Before HOPKINS, Acting P.J., and MUNDER, SHAPIRO, BRENNAN and BENJAMIN, JJ.
costs and disbursements as taxed and (2) as dismissed the third-party complaint.
of the fee (15 Couch on Insurance 2d, s 57:179; see Empire Development Co. v.
Title Guar. & Trust Co., 225 N.Y. 53, 61, 121 N.E. 468, 470).
action commenced by plaintiffs under article 15 of the Real Property Law.
for breach of a contract of title insurance.
have not allowed them costs on this appeal.
Action for breach of a contract of title insurance. From so much of a judgment of the Supreme Court, Rockland County, as was in favor of plaintiff and as dismissed third-party complaint, defendant appealed. The Supreme Court, Appellate Division, held that plaintiffs, who contracted to buy an unimproved parcel of land, undertaking to make a down payment and to give a purchase money mortgage for remainder, and who received a deed to parcel, fee title to which was insured by defendant, were not entitled to recover value of fee ($65,000) on defendant's breach of title contract, nature of which was indemnity, and were only entitled to recover their actual loss (down payment of $25,000 and interest on mortgage of $7,800). It was further held that appeal from dismissal of third-party complaint for indemnity against person who acted as defendant's agent in procuring contract would be severed from main appeal and would be remanded for further findings of fact and conclusions of law, where finding of trial court that third-party defendant should have discovered county's title could not be reconciled with its finding that defendant (third- party plaintiff) had not proven third-party defendant's liability by a fair preponderance of credible evidence.
Plaintiffs, who contracted to buy an unimproved parcel of land, undertaking to make a down payment and to give a purchase money mortgage for remainder, and who received a deed to parcel, fee title to which was insured by defendant, were not entitled to recover value of fee ($65,000) on defendant's breach of title contract, nature of which was indemnity, and were only entitled to recover their actual loss (down payment of $25,000 and interest on mortgage of $7,800). Real Property Actions and Proceedings Law § 1501 et seq.
Where defendant, in breaching contract of title insurance he had obtained for plaintiffs, refused in substance to defend against county's counterclaim of title in action commenced by plaintiffs under Real Property Law, allowing plaintiffs to recover their legal expenses was not improper. Real Property Actions and Proceedings Law § 1501 et seq.
An allowance for costs may not be made in an action solely to recover damages for breach of a contract of title insurance. Real Property Actions and Proceedings Law § 1501 et seq.; CPLR 8302(a), par. 3.
Appeal from portion of judgment, which dismissed third-party complaint for indemnity against person who had acted as defendant's agent in procuring contract of title insurance which was allegedly breached would be severed from main appeal, and case would be remanded for further findings of facts and conclusions of law, where trial court's finding that third-party defendant should have discovered county's title could not be reconciled with its finding that defendant (third-party plaintiff) had not proven third-party defendant's liability by a fair preponderance of credible evidence. Real Property Actions and Proceedings Law § 1501 et seq. **475 Thomas J. Leyden, Spring Valley, for respondents; Thomas J. Leyden, Spring Valley, of counsel.
Dreyer & Traub, New York City, for appellant; Samuel Kirschenbaum and Arthur Winoker, New York City, of counsel.
In consolidated matters, in which plaintiffs Grimsey and Ruback sought to recover damages from appellant for breach of a contract of title insurance, and in which the latter as third-party plaintiff sought indemnity from the third- party defendant, the appeal, as limited by appellant's brief, is from so much of a judgment of the Supreme Court, Rockland County, entered August 13, 1970 *573 and made after a nonjury trial, (1) as is in favor of said plaintiffs against appellant in the amounts of $70,000 ($65,000 damages plus $5,000 legal fees) and **476 $7,800 (for moneys paid by plaintiffs as interest on a mortgage), plus costs and disbursements as taxed and (2) as dismissed the third-party complaint.
The portion of the judgment which is in favor of plaintiffs is modified, on the law, by reducing the recovery of $70,000 to $30,000, reducing the award of costs from $1,320 to $150, and accordingly reducing plaintiffs' total recovery to $38,898.75. As so modified, said portion of the judgment is affirmed, without costs.
The appeal from the portion of the judgment which dismissed the third-party action is severed and held in abeyance pending the making of further findings of fact and conclusions of law by the Trial Term, in accordance with the views hereinbelow set forth, and the case is remanded to the Trial Term for that purpose.
 In January, 1967, plaintiffs contracted to buy an unimproved parcel of land in Rockland County for $65,000, undertaking to pay $25,000 in cash and to give a purchase money mortgage for the remainder. In March, 1967, they received a deed to the parcel, the fee title to which was insured by appellant, an insurance we find by estoppel because of the third-party defendant's apparent agency to act on behalf of appellant. In February, 1968, the County of Rockland claimed that it held the fee and, insofar as the judgment declares the fee to be in the County, appellant does not appeal. The Trial Term, however, awarded plaintiffs $65,000 for their loss of the fee, though they had paid only $25,000 as a down payment and, subsequently, $7,800 in diminution of the mortgage debt. Because indemnity is the nature of the title insurance contract at bar, plaintiffs are entitled only to the recovery of their actual loss and may not recover the value of the fee (15 Couch on Insurance 2d, s 57:179; see Empire Development Co. v. Title Guar. & Trust Co., 225 N.Y. 53, 61, 121 N.E. 468, 470).
 With respect to plaintiffs' recovery of their legal expenses, that aspect of the judgment is sustainable because appellant, in breach of the policy, in substance refused to defend against the County's counterclaim of title in the action commenced by plaintiffs under article 15 of the Real Property Law.
 With respect to the costs taxed, however, an allowance pursuant to CPLR 8302 (subd. (a), par. 3) may not be made in an action solely to recover damages for breach of a contract of title insurance.
 Last, we sever the appeal and remand the third-party action for further findings of fact and conclusions of law, because we are unable to reconcile the Trial Term's finding that the third-party defendant should have discovered the County's title with its finding **477 that the third-party plaintiff had not proved the third-party defendant's liability by a fair preponderance of the credible evidence. Because of the inadequacy of plaintiffs' appellate brief, we have not allowed them costs on this appeal.

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