Barrington Reinsurance Ltd., LLC v. Fidelity National Title Insurance

2007 NMCA 147, 172 P.3d 168, 143 N.M. 31
CourtNew Mexico Court of Appeals
DecidedSeptember 18, 2007
DocketNo. 26,777
StatusPublished
Cited by6 cases

This text of 2007 NMCA 147 (Barrington Reinsurance Ltd., LLC v. Fidelity National Title Insurance) is published on Counsel Stack Legal Research, covering New Mexico Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Barrington Reinsurance Ltd., LLC v. Fidelity National Title Insurance, 2007 NMCA 147, 172 P.3d 168, 143 N.M. 31 (N.M. Ct. App. 2007).

Opinion

OPINION

CASTILLO, Judge.

{1} The sole question in this appeal relates to the interpretation of NMSA 1978, § 59A-30-ll(A) (1999), the amended statute dealing with the duty of a title insurer or its agent to conduct “a reasonable search and examination of the title” before issuing a title policy. The parties in this case question the application of the amended language to other duties arising under the common law or other statutes. We conclude that Section 59A-30-11(A) does not bar a claim against a title insurer or its agent that is based on a duty other than the duty specified in the statute, that of reasonable care in conducting a title search. Accordingly, we affirm the trial court’s order.

I. BACKGROUND

{2} The relevant facts are undisputed. The parties’ disagreement arises out of the following events. Nonparty Brent M. Freeze acquired two lots, Lot 8 and Lot 9, from nonparty Andrew L. Turner. When Freeze acquired the two lots, he obtained a title insurance policy from Defendanb-Appellant, Fidelity National Title Insurance Company (Fidelity). The title search performed prior to issuing the policy did not reveal any restrictive covenants on the two lots; consequently, the policy did not indicate the existence of any restrictions.

{3} Two months later, Freeze deeded Lots 8 and 9 to Plaintiff-Appellee, Barrington Reinsurance Limited (Barrington). Freeze and Barrington retained Fidelity to act as closing agent, to provide advice, and to prepare documents in regard to the transfer of Lots 8 and 9. Barrington told Fidelity that Barring-ton intended to sell Lot 8 and Lot 9 separately. Subsequently, during the course of the transfer, Fidelity made various affirmative representations to Barrington, including the following: (1) Fidelity had performed previous title searches on Lots 8 and 9, and the title “was good and clear”; and (2) Barring-ton did not need to obtain title insurance because the title to the property was “good” and because Barrington was protected by the policy issued to Freeze.

{4} A few months later, Barrington entered into a contract to sell Lot 8 for $480,000 and retained Fidelity to act as closing agent. At that time, Fidelity performed another title search on Lot 8 in order to issue a title policy to the prospective buyer. During this title search, Fidelity discovered a recorded agreement that had been overlooked in Fidelity’s previous title search. The agreement provided that Lot 8 and Lot 9 could not be sold separately and that only one house could be built on the two lots. One house already existed on Lot 9. As a result, Barrington could not sell Lot 8 to the prospective buyer.

{5} After discovering the agreement, Fidelity acknowledged that it had made a mistake and promised to fix the problem. When Fidelity failed to solve the problem, Barring-ton filed suit and asserted four claims: negligence; negligent misrepresentation; breach of implied or constructive contract; and unfair, deceptive, or unconscionable trade practice. In the complaint and on appeal, Barrington asserts that it relied on the oral representations made by Fidelity in regard to the transfer of Lots 8 and 9 from Freeze to Barrington and, in so doing, did not obtain title insurance.

{6} Fidelity, relying solely on the language of Section 59A-30-ll(A), moved for summary judgment on all four of Barrington’s claims and argued that the amended language of the statute barred recovery for any claim arising from an alleged defect in the title search. The trial court agreed that Section 59A-30-11(A) barred recovery on the negligence claim and therefore granted Fidelity’s motion for summary judgment as to Count I. Based on the conclusion that the amended statute did not apply to Barrington’s remaining claims, the court denied Fidelity’s motion as to Count II, negligent misrepresentation; Count III, breach of implied or constructive contract; and Count IV, unfair, deceptive, or unconscionable trade practice. See Unfair Practices Act (UPA), NMSA 1978, §§ 57-12-1 to -24 (1967, as amended through 2005). The trial court issued an order, which included the necessary language permitting application for interlocutory appeal. See NMSA 1978, § 39-3-4 (1999). Fidelity applied for interlocutory appeal, which we granted to consider the application of Section 59A-30-11(A) to Counts II-IV of Barrington’s complaint.

{7} Barrington does not cross-appeal the trial court’s grant of summary judgment on the claim for negligence, Count I. Because Fidelity’s motion for summary judgment was premised solely on the application of Section 59A-30-ll(A), our review on appeal is narrow. We consider only whether the trial court erred in concluding that Section 59A-30-ll(A) did not apply to Barrington’s remaining claims.

II. DISCUSSION

A. Standard of Review

{8} Summary judgment is appropriate when there is no genuine issue of material fact and when the movant is entitled to judgment as a matter of law. Rule 1-056(C) NMRA. We review de novo issues of statutory interpretation and decisions regarding motions for summary judgment. Maestas v. Zager, 2007-NMSC-003, ¶8, 141 N.M. 154, 152 P.3d 141. We view the facts in the light most favorable to the nonmoving party and make all reasonable inferences in support of a trial on the merits. Ocana v. Am. Furniture Co., 2004-NMSC-018, ¶12, 135 N.M. 539, 91 P.3d 58.

B. Section 59A-30-1KA)

{9} Fidelity argues that all of Barrington’s claims are based on an alleged defect in the title search conducted when Fidelity issued a policy to Freeze. Fidelity therefore contends that Section 59A-30-ll(A) bars each claim. We begin by discussing the language and history of Section 59A-30-ll(A), which reads as follows:

A. No title insurance policy may be written unless the title insurer or its title insurance agent has caused to be conducted a reasonable search and examination of the title using an abstract plant meeting the requirements of Section 59A-12-13 NMSA 1978 and has caused to be made a determination of insurability of title in accordance with sound underwriting practices. The duty to search and examine imposed by this section is solely for the purpose of enhancing the financial stability of title insurers for the benefit of insureds under title insurance policies. The New Mexico Title Insurance Law [this article] is not intended and should not be construed to create any duty to search and examine that runs to the benefit of, or to create any right or cause of action in favor of, any person other than a title insurer.

(Alteration in original.)

{10} Section 59A-30-ll(A) was enacted in 1985 and originally contained only the first sentence, which requires a title insurer or its agent to conduct “a reasonable search and examination” of a title before issuing a policy. See 1985 N.M. Laws, ch. 28, § 11. In 1993, our Supreme Court construed the language of NMSA 1978, § 59A-30-ll(A) (1985). In Ruiz v. Garcia, 115 N.M. 269, 270, 272, 850 P.2d 972, 973, 975 (1993), the Court held that the title insurance company owed the plaintiff, a seller of property, a statutory duty to exercise reasonable care in conducting a title search, based on Section 59A-30-ll(A) (1985).

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Bluebook (online)
2007 NMCA 147, 172 P.3d 168, 143 N.M. 31, Counsel Stack Legal Research, https://law.counselstack.com/opinion/barrington-reinsurance-ltd-llc-v-fidelity-national-title-insurance-nmctapp-2007.