INSURANCE-RELATED COURT CASES
Digested from case reports published online
COURT DECISIONS
Bad news for title appellants
On September 28, 2016, Sanford Sachtleben and Luciann Hruza purchased approximately 20 acres of land unimproved except for a barn in New Melle, St. Charles County, Missouri, from Perry and Joanie Sullivan.
On August 29, 2016, before the sellers sold the property to the buyers, New Melle alleged that the property was in an “R-1A Single Family Residential Zone District” and that the barn the sellers constructed on the property after they received an accessory building permit from New Melle in November 2015 violated city zoning ordinances—because in May 2016, the sellers had requested a refund of the fee for the single-family building permit issued to them in March 2016, which indicated, according to New Melle, that the sellers did not wish to build a single-family dwelling on the property.
New Melle asked the circuit court to enjoin the sellers from entering and using the barn except during the construction of a principal single-family dwelling with a proper permit or to order the barn demolished for violating city ordinances. In October 2016, New Melle added the buyers as defendants in its lawsuit based on the buyers’ new ownership of the property. New Melle alleged that the buyers had not applied for a permit for a principal building. The buyers demanded that Alliant National Title Insurance Company provide coverage under the policy, but Alliant refused.
Before closing, the buyers engaged Investors Title Company (ITC), an insurance broker, to buy the policy from Alliant. ITC prepared a title commitment for Alliant that identified the New Melle lawsuit as a potential “special exception” from coverage, stating: “We find of record a pending suit … by and between the City of New Melle and the sellers, the outcome of which may affect the subject.”
The buyers alleged that they were not provided a copy of the title commitment or otherwise informed by ITC, Alliant, or the sellers about the New Melle lawsuit. On September 30, 2016, Alliant issued the policy to the buyers with a September 30, 2016 “date of policy.” The policy was a standard form American Land Title Association policy. It did not mention, identify, or reference the New Melle lawsuit.
The parties did not dispute that, as of September 30, 2016, St. Charles County’s land records included no document that (1) described any portion of the property and (2) stated that either an ordinance violation existed at the property or that New Melle intended to enforce any ordinance violation against the property. The buyers alleged that they did not know about the New Melle lawsuit until October 19, 2016, when they were added as defendants.
On March 25, 2021, the circuit court entered judgment in the New Melle lawsuit. The court found in New Melle’s favor, enjoined the buyers from entering or using the barn except during construction of a principal single-family dwelling with a proper permit, and ordered the barn demolished within 180 days of the date of judgment unless the buyers had rezoned the property or started construction on the property with a proper permit.
On May 13, 2021, the buyers sued in St. Louis County circuit court, asserting that Alliant breached the policy by refusing to defend the New Melle lawsuit. The buyers sued Alliant, ITC, and a real estate agent individually and as a principal of a limited liability company. On the same date, the buyers sued the sellers, New Melle, and others in a separate case.
Alliant moved for summary judgment on the only claim against it, asserting that no provision of the policy provided coverage to the buyers. The circuit court granted Alliant’s motion, concluding that the unambiguous wording of the policy provided no coverage for the buyers. The buyers appealed. The court granted transfer after an opinion by the court of appeals.
On appeal, the supreme court held that the circuit court did not err in entering partial summary judgment for Alliant on Count VI of the buyers’ petition. The court affirmed the circuit court’s judgment.
Sanford Sachtleben and Luciann Hruza v. Alliant National Title Insurance Company—Supreme Court of Missouri—No. SC100238—April 30, 2024.
