By: Charles A. Perkins, Jr.
The case entitled Richard G. MacDonald v. Old Republic National Title Insurance Company, et al, is an interesting Federal Court Decision that deals with what one would think is a clear breach of contract and tort which would render the Defendant, Old Republic National Title Insurance, liable for a title insurance issue.
In this case, an individual named MacDonald delivered $135,000 to a person for unit mortgage loans arranged for by said person. As security for the loan, MacDonald was granted a first mortgage affording to encumber three (3) condominium units. Further, to ensure validity, enforceability and priority of the purported mortgages, MacDonald purchased and received three (3) title insurance policies issued by Old Republic.
Old Republic moved to dismiss Count III of MacDonald’s Complaint which was brought against Old Republic for failing to conduct a competent search of title and creating liability under the New Hampshire Revised Statute Section, 416-A:6. He also brought a claim for liability for negligence.
The Court went through a lengthy analysis and indicated that a title insurer has a common law duty to the insured and MacDonald may bring his claim for negligence against Old Republic. The Court also found that MacDonald was allowed to bring the statutory standard of conduct for his actions of negligence and that the economic loss doctrine did not apply.
They reserved the right to certify this question to the New Hampshire Supreme Court in the event the resolution of Count III ultimately determines or affects MacDonald’s recovery in this matter.