Court Opinion

ID: 8294803
Source: CourtListenerOpinion
Date Created: 2022-10-17 11:00:55.830032+00
Date Added: 2024-06-11T16:43:59.702848
License: Public Domain

Justice PLEICONES.
I respectfully dissent and would adopt the majority rule which values actual loss under an owner’s title insurance policy as of the date of discovery of the title defect. I find *617persuasive the rationale for this choice as explained by the California Supreme Court:
It seems quite apparent to us that liability should be measured by diminution in the value of the property caused by the defect in title as of the date of the discovery of the defect, measured by the use to which the property is then being devoted. When a purchaser buys property and buys title insurance, he is buying protection against defects in title to the property. He is trying to protect himself then and for the future against loss if the title is defective. The policy necessarily looks to the future. It speaks of the future. The present policy is against loss the insured “shall sustain” by reason of a defect in title. The insured, when he purchases the policy, does not then know that the title is defective. But later, after he has improved the property, he discovers the defect. Obviously, up to the face amount of the policy, he should be reimbursed for the loss he suffered in reliance on the policy, and that includes the diminution in value of the property as it then exists, in this case with improvements. Any other rule would not give the insured the protection for which he bargained and for which he paid. There may be some conflict in the authorities on this subject but the weight of authority and the better reasoned cases support the views above expressed.
Overholtzer v. Northern Counties Title Ins. Co., 116 Cal.App.2d 113, 253 P.2d 116, 125 (1953).
Further, I do not agree with the majority that the contract’s failure to specify when the actual loss occurs renders it ambiguous. In making this finding, the majority relies upon the Stanley opinion’s statement that “the terms of individual [title] insurance agreements can control the method of valuation.” Stanley v. Atl. Title Ins. Co., 377 S.C. 405, 411, 661 S.E.2d 62, 65 (2008). Stanley is concerned with the methodology for measuring the damages caused by a title defect which affects only part of the property, not with the timing of that valuation. Moreover, if we were to read Stanley as deciding the issue of timing asked in this case, then we should hold that the date of purchase is the only proper date for valuing the insured’s loss.3
*618In my opinion, an insured suffers no actual loss until the defect is discovered: Until that juncture, the insured’s loss is unrealized. Since only a loss that is actualized is insured, I would find that the date of discovery of the title defect is the proper date upon which to measure the diminution in the property’s value. Overholtzer, supra; see also Hartman v. Shambaugh, 96 N.M. 859, 630 P.2d 758 (1981); Swanson v. Safeco Title Ins. Co., 186 Ariz. 637, 925 P.2d 1354 (Ariz.Ct.App.1995); Sullivan v. Transamerica Title Ins. Co., 35 Colo.App. 312, 532 P.2d 356 (Colo.App.1975).

. E.g. "The Master’s order clearly ties the valuation of Stanley’s land to Stanley’s testimony at trial that his land was worth $100,000 at the time *618of purchase ... because the Master did not base his "time of purchase” valuation of Stanley’s land on the amount of the prior condemnation settlement ... we hold that the Master's conclusion that Stanley's land was worth $100,000 at the time of purchase is reasonably supported by the evidence in the record.” Stanley, 377 S.C. at 410, 411, 661 S.E.2d at 65.