A private trust was granted a mortgage on real estate in Essex County.
To protect its legal interest in the property, the trust purchased a mortgagee title insurance policy with Connecticut Attorney Title Insurance Company (CATIC).
The policy covered
against loss or damage, not exceeding the Amount of Insurance, sustained or incurred by the insured by reason of…[a]ny defect in or lien or encumbrance on the Title [and] [t]he lack of priority of the lien of the Insured Mortgage upon the Title over any other lien or encumbrance.
Moreover, the policy removed CATIC’s monetary liability where the insurer
establishes the Title, or removes the alleged defect, lien, or encumbrance, . . . or establishes the lien of the Insured Mortgage, all as insured, in a reasonably diligent manner by any method.
After the policy issued, the trust discovered that there was a preexisting attachment on the real estate.
The attachment was for a whopping $1,559,000.
The trust notified CATIC and the insurer successfully litigated the matter, obtaining an order from superior court removing the encumbrance.
Nevertheless, the trust filed suit against CATIC seeking additional damages.
A superior court judge dismissed the case and the trust appealed.
Today the Appeals Court upheld the dismissal.
According to the Appeals Court’s slip opinion,
There is no genuine issue of material fact concerning whether CATIC acted with reasonable diligence as contemplated by the policy. CATIC responded to the trust’s claim immediately and, within a month of receiving the information it had requested from the trust, assigned counsel to litigate the validity of the Essex attachment. Within five days of assignment, counsel began the steps necessary to remove the attachment. Then, all within one year of formal notice, CATIC successfully removed the attachment…There is no genuine issue of material fact regarding whether CATIC “fully performed its obligations” under Ā§ 9(a) of the policy, and thus CATIC was entitled to judgment as a matter of law.
The full text of the slip opinion is attached below.