Court Opinion

ID: 8908090
Source: CourtListenerOpinion
Date Created: 2022-11-27 02:11:07.366441+00
Date Added: 2024-06-11T17:08:20.972799
License: Public Domain

WEBB, Judge.
We hold it was proper to dismiss the claims against the defendants Beemer and Epting. If both the attorneys were negligent in not seeing that Roger Baker, Inc. had title to the property before the deed of trust was recorded and the money disbursed, the plaintiffs still have to show that this negligence was a proximate cause of their injury. Rorrer v. Cooke, 313 N.C. 338, 329 S.E. 2d 355 (1985). If Beemer and Epting had not been negligent but had performed as plaintiffs intended them to do, the plaintiffs’ deed of trust would have been subordinate to the deed of trust of The Northwestern Bank. The negligence did not make the plaintiffs’ position any worse than it would have been if there had been no negligence. It is not a proximate cause of their injury. We do not pass on the question of whether Epting was under a duty to the plaintiffs.
We hold it was not error to dismiss the claim against Investors Title Insurance Company. The evidence showed that Investors issued a title insurance policy to plaintiffs which insured that the plaintiffs’ deed of trust constituted a first lien on the property. There was an agreement between the parties that the lien created by the plaintiffs’ deed of trust would be subordinate to a lien in favor of The Northwestern Bank. The policy excluded *786from coverage “liens, encumbrances, adverse claims, or other matters . . . created, suffered, assumed or agreed to by the insured claimant.” Since all the evidence showed that the policy excluded coverage for liens agreed to by the plaintiffs and the plaintiffs agreed to the lien in favor of Northwestern, the loss suffered by the plaintiffs on account of Northwestern’s lien is excluded from coverage.
The plaintiffs argue that a title insurance policy insures against defects in title existing at the time the policy is written. They contend that the failure to record a deed to Roger Baker, Inc. at the time of the closing with the consequent failure of their deed of trust to secure the indebtedness to them was what caused the loss. They argue that this failure of the record title was insured by their policy and the agreement by which they consented that their lien would be subordinated to the lien of The Northwestern Bank was not the cause of the loss. For this reason they contend they should recover from Investors. We believe the answer to this argument is that if the record title had been as it was insured to be the plaintiffs would be in the same position in which they are. They were not damaged because the record title was not as it was insured to be.
The plaintiffs also argue that if they had gotten a first lien on the property at the time of the closing they could have challenged the subordination agreement on the ground of fraud by Roger Baker. They do not contend there was fraud on the part of The Northwestern Bank. If Roger Baker procured the subordination agreement through fraud to which The Northwestern Bank was not a party, it would not have affected Northwestern’s lien. See 37 C.J.S. Fraud § 61 (1943). We do not believe the appellants were prejudiced by not being allowed to attack the subordination agreement.
Affirmed.
Judges Becton and Cozort concur.