Court Opinion

ID: 4739847
Source: CourtListenerOpinion
Date Created: 2021-08-12 17:34:15.147956+00
Date Added: 2024-06-11T08:08:23.243133
License: Public Domain

Armstrong, C.J.
(dissenting) — I respectfully dissent from the majority’s decision that Transnation Title Insurance Company had a duty to inform Patricia Michak, before closing, of changes to the legal description of land she bought. Nothing in Transnation’s preliminary commitment bound Transnation to notify Michak of newly discovered defects. Even if such a duty existed, I would hold that Michak acknowledged the correct legal description in the closing documents she signed. The majority concludes that signing the closing documents had no effect because the preliminary commitment required that Michak have actual notice of a defect before Transnation could amend the commitment. But the commitment does not contain such a requirement.
A person is bound by the contents of a contract that he signs voluntarily and knowingly. Nat’l Bank of Wash. v. Equity Investors, 81 Wn.2d 886, 912-13, 506 P.2d 20 (1973). Thus, a person who has had an opportunity to read a plain and unambiguous instrument “ ‘cannot claim to have been misled concerning its contents or to be ignorant of what is provided therein.’ ” Equity Investors, 81 Wn.2d at 913 (quoting Johnston v. Spokane & Inland Empire R.R., 104 *428Wash. 562, 569, 177 P. 810 (1919)). Michak initialed the correct legal description without reading it and then claimed that Transnation breached a duty to notify her that the description had changed. But, under Equity Investors, Michak cannot claim she did not know that the legal description included only a 30-foot easement.
The majority concludes that Michak can claim she did not know the true width of the easement despite the accurate description in the closing documents she signed. According to the majority, the only reasonable interpretation of the preliminary commitment requires that, before Transnation could amend the commitment to add defect, the insured had to have actual knowledge of the defect. But this interpretation is unsupported by the language of the preliminary commitment.
The commitment first relieves Transnation of liability for loss incurred because of a defect of which the insured has actual knowledge but fails to disclose to Transnation:
If the proposed insured has or acquires actual knowledge of any defect... or other matter affecting the estate or interes . . . covered by this Commitment other than those shown in Schedule B hereof, and shall fail to disclose such knowledge to the Company in writing, the Company shall be relieved from liability!.]
Clerk’s Papers (CP) at 7. This language binds the insured to notify Transnation; the duty is not reciprocal. The commitment goes on to allow Transnation to amend Schedule B of the commitment to add defects as it discovers them:
If the proposed insured shall disclose such knowledge to the Company, or if the Company otherwise acquires actual knowledge of any such defect. . . the Company at its option may amend Schedule B of this Commitment [.]
CP at 7. Thus, Transnation could choose to amend the commitment if (1) the insured had actual knowledge of a defect and disclosed the defect to Transnation or (2) Transnation learned of a defect from any other source. Stated simply, Transnation could amend Schedule B re*429gardless of how it learned of a defect and regardless of whether the insured already knew of the defect.
Despite the majority’s meticulous analysis, nothing in the language or structure of these two sentences indicates that amending the commitment to add a defect required the insured’s actual knowledge of the defect. The majority reasons that the phrase “[i]f the proposed insured has or acquires actual knowledge of any defect” applies to both sentences. But this reading mischaracterizes the text.
The majority concludes that its reading of the contract is reasonable because public policy reasons support the result. But the majority modifies the contract language to reach its result. And a court “may not modify clear and unambiguous language in an insurance contract.” Tucker v. Bankers Life & Cas. Co., 67 Wn.2d 60, 66, 406 P.2d 628 (1965). Further, under the majoritys interpretation, Transnation could not even have met the actual knowledge requirement by sending Michak a copy of the supplemental commitment, which contained the revised legal description. Transnation would have had to tell Michak about the defect before making the revision and sending the supplement.
I would uphold the summary judgment in favor of Transnation. Thus, I dissent.
Review granted at 145 Wn.2d 1033 (2002).