Opinion ID: 1250066
Heading Depth: 4
Heading Rank: 1

Heading: Did Security Title's title commitment disclaim liability for negligence?

Text: The preliminary commitment for title insurance states: This report and commitment shall have no force or effect except as a basis for the coverage specified herein. We do not regard the quoted language as an effective disclaimer of liability for negligence. First, as a general rule, contractual limitations on liability for negligence must be clearly set forth. Dresser Indus. Inc. v. Foss Launch & Tug Co., 560 P.2d 393, 395 (Alaska 1977). `If the defendant seeks ... to escape responsibility for the consequences of his negligence, then [the disclaimer] must so provide, clearly and unequivocally, as by using the word `negligence' itself.' Kissick v. Schmierer, 816 P.2d 188, 191 (Alaska 1991) (quoting W. Keeton, D. Dobbs, R. Keeton & D. Owen, Prosser and Keeton on the Law of Torts § 68 at 483-84 (5th ed. 1984)). In our view the quoted language does not clearly disclaim tort liability nor does it clearly state that the title company will not be liable even if it is negligent. Further, we agree with the decision of the California Supreme Court in White v. Western Title Ins. Co., 221 Cal. Rptr. 509, 710 P.2d 309, 315-16 (1985), which held that a similar disclaimer in a preliminary title report was invalid: A title company is engaged in a business affected with the public interest and cannot, by an adhesory contract, exculpate itself from liability for negligence. See also Municipality of Anchorage v. Locker, 723 P.2d 1261, 1265-66 (Alaska 1986) (exculpatory clauses are unconscionable where circumstances indicate a vast disparity of bargaining power coupled with terms unreasonably favorable to the stronger party).