Penn Title Insurance v. Intercounty Abstract, Ltd.

31 Pa. D. & C.3d 635, 1984 Pa. Dist. & Cnty. Dec. LEXIS 384
CourtPennsylvania Court of Common Pleas, Montgomery County
DecidedFebruary 7, 1984
Docketno. 82-4125
StatusPublished
Cited by2 cases

This text of 31 Pa. D. & C.3d 635 (Penn Title Insurance v. Intercounty Abstract, Ltd.) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Montgomery County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Penn Title Insurance v. Intercounty Abstract, Ltd., 31 Pa. D. & C.3d 635, 1984 Pa. Dist. & Cnty. Dec. LEXIS 384 (Pa. Super. Ct. 1984).

Opinion

YOHN, J.,

This is an action for declaratory relief filed by Penn Title Insurance Company (hereinafter Penn Title) against its former agent, Intercounty Abstract Ltd. (hereinafter Intercounty). Pursuant to an agency agreement entered into on March 15, 1979, plaintiff appointed defendant to solicit, accept and process applications for title insurance on behalf of plaintiff. Intercounty agreed to indemnify Penn Title for all losses sustained by plaintiff on account of errors and omissions in the examination of title by defendant or any abstractor whose work was not acceptable to plaintiff.

[637]*637On April 1, 1981, plaintiff issued a title insurance policy to James and Therese Clark covering property located at 3221 Kennedy Road, East Norriton Township, Montgomery County, Pa. The Clarks had purchased the property from the prior owners, Howard and Marie Sherry and settlement was held on March 27, 1981. The title report and the resultant title insurance policy prepared by defendant failed to reveal that a judgment in the amount of $65,702.29 had been filed against Howard and Marie Sherry. The undisclosed judgment was a confession of judgment filed by Alexander McKenzie on March 25, 1981, at 3:50 p.m. in the Montgomery County Prothonotary’s Office..1

Penn Title, pursuant to its contractual obligations to the Clarks, filed an action to quiet title against McKenzie2. The parties to that action entered into a stipulation on March 26, 1982, whereby Penn Title agreed to pay McKenzie $58,000 plus accrued interest. The present action, which by agreement of the parties incorporates the terms of the March 26, 1982 stipulation, is to determine Intercounty’s liability to Penn Title under the agency agreement entered into by plaintiff and defendant. Essentially, the issue is whether the judgment filed by McKenzie on March 25, 1981, ripened into a lien prior to the conveyance of title at the March 27, 1981 settlement and whether, under the agency agreement, defendant is responsible to plaintiff for the loss to plaintiff resulting therefrom. It is the court’s opinion that the answer to both of these [638]*638questions is in the affirmative and, therefore, defendant is obligated to indemnify plaintiff.

FINDINGS OF FACT

1. Plaintiff, Penn Title Insurance Co., is a title insurance company located at 22 North Sixth Street, Reading, Pa.

2. Defendant is a Pennsylvania Corporation engaged as a title insurance agent and abstractor with its principal place of business at 618 Germantown Pike, Suite 144, Lafayette Hill, Pa.

3. Defendant, Intercounty Abstract Ltd., trading as International Abstract, was a title insurance agent for plaintiff at all times relevant hereto.

4. On March 15, 1979, plaintiff and defendant entered into a contract whereby plaintiff appointed defendant to, inter alia, solicit, accept and process applications for title insurance on behalf of plaintiff.

5. The contract between plaintiff and defendant provides in relevant part as follows:

2. AGENT SHALL:

“. . . (c). Base the insurability of every title upon an examination of an abstract of title prepared by AGENT or for AGENT either by an abstracter whose work is acceptable to PENN or by any abstracter for whose errors and omissions AGENT will indemnify PENN.”

6. The contract also provides:

6. “AGENT shall indemnify PENN for all loss, cost or damage which PENN may sustain or become liable for on account of: . . .

b. Errors or omissions in AGENT’S abstracting or examination of title.

c. Errors or omissions by any abstracter whose work is not acceptable to PENN.

7. The agreement provided in substance that if defendant referred abstracting work to an abstractor [639]*639“whose work is acceptable to Penn,” plaintiff would bear the risk of loss, and, if it was referred to any other abstractor, defendant would bear the risk of loss.

8. Intercounty engaged the services of Robert Chalphin Associates to perform the title abstracting services that were a necessary requisite to the transfer of title in the instant matter and to the issuance of a title insurance policy at settlement.

9. Chalphin Associates is a reputable and experienced abstractor which has been engaged in various facets of the title insurance business in Norris-town, Pa. for many years.

10. Defendant, however, never advised plaintiff of the decision to engage the services of Chalphin Associates and plaintiff, therefore, never approved or accepted Chalphin’s work.

11. On April 1, 1981, plaintiff issued a title insurance policy to James A. and Therese M. Clark for a property located at 3221 Kennedy Road, East Norriton Township, Montgomery County, Pa.

12. Settlement had been held on the property on March 27, 1981, at 9:00 a.m. at the offices of Red Hill Savings and Loan Association, Telford, Pa. The settlement was conducted by Robert Bischoff, President of defendant. As agent for plaintiff, defendant issued a “marked up” title report on the above-described property at the settlement and on which the title insurance policy was based which failed to reveal that a judgment in the amount of $65,702.29 had been filed against Howard W. and Marie D. Sherry, former owners of the property, under the caption Alexander McKenzie v Howard W. and Marie D. Sherry, Civil Action No. 81-5230, in Montgomery County, Pa.

13. The McKenzie judgment had been filed in the Office of the Prothonotary of Montgomery [640]*640County, Pa., at 3:50 p.m. on Wednesday, March 25, 1981.

14. The prothonotary’s office generally observes the following sequence in the processing of newly filed judgments:

a. The judgment is handed to a clerk by the judgment creditor or his representative, whereupon the clerk reviews it to determine whether it is in proper form for filing and he or she immediately time stamps it with the time and date of filing.

b. The clerk who accepts the judgment for filing promptly places the judgment in a “scratcher box” along with other recently filed judgments to await further processing.

c. Thereafter, another clerk arranges the loose judgments in the “scratcher box” in the sequence in which they were filed, and he or she notes on what is commonly known as the “scratcher” or the “scratch sheet” the name of defendant, the name of plaintiff, the volume, and, if available, the page number of the general docket book in which the judgment will appear, the civil action number assigned to the matter by the prothonotary, the nature of the instrument in which the judgment appears, and the amount of the judgment.

d. After information concerning the judgment is noted on the “scratcher,” another clerk takes the “scratcher” and makes the appropriate entries in the general docket book.

e. After the information is entered in the general docket book, yet another clerk takes the “scratcher” and makes the appropriate entries in the judgment index book.

f. After entry in the judgment index book, the information recorded therein is verified by still another clerk.

[641]*64115.

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Bluebook (online)
31 Pa. D. & C.3d 635, 1984 Pa. Dist. & Cnty. Dec. LEXIS 384, Counsel Stack Legal Research, https://law.counselstack.com/opinion/penn-title-insurance-v-intercounty-abstract-ltd-pactcomplmontgo-1984.