Opinion ID: 2204896
Heading Depth: 1
Heading Rank: 5

Heading: lawyers title

Text: In this Court Davis takes the position that Lawyers Title is liable on the basis of fraud or negligence. Davis sets forth as the basis of his fraud claim the fact that reference to Lots 7, 8, and 10 was omitted from the title insurance policy as finally issued, contending that between the time of the issuance of the binder and the issuance of the final policy Lawyers Title became aware of the Canatella's lack of title to any portions of Lots 7, 8 and 10 and purposely omitted said coverage from their policy for that reason. We do not interpret this omission as evidence of fraud because as the policy was actually written we interpret the original reference to Lots 7, 8, and 10 as having in effect been included by the terminology in the policy that the land referred to is the same land described in the deed from Canatella to Davis. There can be no liability on the part of Lawyers Title to Davis under the policy itself because the effect of the description used is to insure the title to the 1.6 acres of land actually conveyed. No problem has arisen relative to that. On the issue of negligence, Davis says that if the omission to cover portions of Lots 7, 8 and 10 was a result of negligence or lack of care in the preparation of the policy, [Lawyers Title] would not be excused by such negligence, but [Davis] would be entitled to have the policy reformed to read in accordance with the understanding of the parties, citing Moyer v. Title Guarantee Company, 227 Md. 499, 177 A.2d 714 (1962). Moyer was, indeed, an action by a title insurance company to have a policy of insurance reformed. In this case Davis did not see fit to go into equity for the purpose of reformation of the policy as was done in Ben Franklin Ins. Co. v. Gillett, 54 Md. 212 (1880); Dela. F. & M. Ins. Co. v. Gillett, 54 Md. 219 (1880); and Automobile Ins. Co. v. Shapiro, 151 Md. 383, 135 A. 163 (1926). An insurance agent or broker may be liable to an insured for the broker's or agent's failure to exercise reasonable diligence and due care by procuring a void or defective policy, as this Court held in Lowitt v. Pearsall Chemical, 242 Md. 245, 219 A.2d 67 (1966), but Davis has cited no authority for holding an insurance company liable to an insured on an unreformed policy on the basis of such negligence. Accordingly, we conclude that the trial judge erred in finding liability against Lawyers Title. Judgment affirmed as to Real Estate Title Company, Incorporated; judgment reversed as to Lawyers Title Insurance Corporation and Joseph Canatella, Jr., et al.; costs to be paid by Real Estate Title Company, Incorporated.