Court Opinion

ID: 9682504
Source: CourtListenerOpinion
Date Created: 2023-08-24 08:12:17.547328+00
Date Added: 2024-06-11T18:17:39.720810
License: Public Domain

SPEARS, Justice,
concurring and dissenting.
Although I concur in the court’s judgment as to Cook Consultants, I respectfully dissent as to Stewart Title. I believe that Stewart Title is liable to Mrs. Larson under its policy of title insurance. Stewart Title stipulated that it was economically and physically impracticable to remove only a portion of the house. Stewart Title guaranteed Mrs. Larson “good and indefeasible title to the ... described land.” “Land” is defined in Larson’s policy of title insurance to include “improvements affixed there-to_” Mrs. Larson’s house was an affixed improvement. Moreover, the premium charged for the policy was based on the value of the entire house and lot. Each side thought that the insurance covered the title to the whole house. Title to part of the house failed because half of the house was not on the lot. Stewart Title guaranteed good title to that house. “Good title” is title which is free from litigation and palpable defect and which may be transferred to another. Black’s Law Dictionary, 1332 (Rev. 5th Ed.1979). Obviously, Mrs. Larson did not get “good title” to the house. Title problems with the house resulted in litigation, and since the house had to be destroyed it could not be conveyed.
The policy attempts to exclude from its coverage any “discrepancies, conflicts, or shortages in area or boundary lines, or any encroachments, or any overlapping of improvements.” (Emphasis added). The exclusion of encroachments and overlapping improvements conflicts with the intent and purpose to insure the house and lot. Exceptions in insurance policies are strictly construed against the insurer. Glover v. National Insurance Underwriters, 545 S.W.2d 755, 761 (Tex.1977). Furthermore, when the language of an insurance con*570tract is subject to two or more reasonable interpretations, that construction which affords coverage is to be the one adopted. Glover, 545 S.W.2d at 761. Applying these well-established rules of construction, I would hold as a matter of law that this title insurance policy covered Mrs. Larson’s loss. This construction effectuates the intention of the parties as reflected by the whole contract. See Republic National Life Insurance Company v. Spillars, 368 S.W.2d 92, 94 (Tex.1963); Dallas Title and Guaranty Company v. Valdes, 445 S.W.2d 26, 28-30 (Tex.Civ.App.—Austin 1969, writ ref’d n.r.e.); see also Thompson v. Waits, 159 S.W. 82, 84 (Tex.Civ.App.—Austin 1913, writ ref'd).
The parties thought that the house and lot were insured against title failures. The premium for the insurance was based on the value of the whole house and lot. Since title to half the house failed because it was not on the lot, Stewart Title should be liable for that failure. To allow Stewart Title to escape from any liability under this contract is unconscionable. In my opinion it is against public policy to allow title companies to blatantly attempt to renege on the public in such a manner. If title policies do not cover this type of loss, then the intended protection is illusory.
Under the contract, Stewart Title has limited its liability for partial failure to “the same ratio to the whole liability that the adverse interest claim or right established may bear to the whole land, such ratio to be based on respective values determinable as of the date of the policy.” I interpret this to mean that Stewart Title is liable for the proportionate reduction in value of the land and improvements caused by partial failure of title in the ratio of the respective values the date the policy was issued. Under the policy the whole house and lot were valued at $15,850.00. Title to half the house failed. The remaining half of the house was worth nothing because it had to be torn down, and Stewart Title so stipulated. Therefore, the value of the remaining property after partial title failure is only the value of the land. I would hold Stewart Title liable for the face amount of the policy less the value of the land at the time the policy was issued plus attorney’s fees. Stewart Title had a duty to defend Mrs. Larson, and stipulated that if liable under the policy it would owe $2,500.00 as reasonable attorney’s fees incurred in the suit against her neighbor. I believe that Stewart Title is additionally liable for the attorney’s fees incurred in prosecuting this suit.
KILGARLIN, J., joins in this concurring and dissenting opinion.