Title Nerds

Title Nerds co-hosts Michael O’Donnell and Bethany Abele talked with special guest Jeffrey Greif, a seasoned real estate title sales professional with 37 years’ experience, most of which has been with First American Title Insurance Company, with which he is a four-time Circle of Excellence award winner.  Jeffrey explained why title insurance is necessary, to confirm that “the property you think you are buying is actually the property you are buying,” giving examples of the various title defects that can be uncovered when conducting title searches, including neighbor disputes, inheritance issues, fraud, and more.  Jeffrey discussed how title insurance has evolved over the years and how technology has fueled new enhancements, along with cautions against relying on attorney opinion letters in lieu of title insurance.  Also, since Bethany described Jeffrey as a “fantastic networker,” he provided valuable and practical networking tips for professionals.

He closed with a fascinating war story from his career, where his team had to research documents from 100 years ago in order to confirm property ownership.

Next, Riker Danzig associate Matthews Florez provided an overview of a recent case decided in the Court of Appeals in Washington State, finding that a title insurance company could deny coverage to a policyholder based on an exception for loss by reason of “matters disclosed by a record of survey” when the recordation information for a boundary line adjustment was disclosed only on the survey.  Matthews and Mike discussed the details of the case, High Definition Homes, LLC v. Stewart Title Guar. Co., No. 58677-1-II, 2024 Wash. App. LEXIS 1601 (Ct. App. Aug. 6, 2024), which makes clear the importance of understanding and exploring what is disclosed in a property survey prior to purchase.

Co-hosts Michael O’Donnell and Bethany Abele welcomed special guest Scott Sumner, Vice President and Underwriting Counsel of Fidelity National Financial, who has played various roles in his 21-year career, including serving as NJ State Counsel and NJ State Manager for the business operations.

Scott provided insights as to what title agents can do to get their deals closed efficiently, including urging agents to raise potential issues as early as possible and to provide all known facts to the underwriting counsel.  Some of the more challenging situations that  Scott addressed were tidelands searches, bankruptcies and mortgage foreclosures, and application of the new Community Wealth Preservation Act. He also discussed the ramifications of two new State statutes on tax sale foreclosures. In addition, Scott shared details of one complex project, an energy generation facility on the Raritan River with a cable extending to the NY state line, presenting myriad title issues.  Finally, Scott also had recommendations for affinity groups that young professionals in the industry should seek out, including the NJ Land Title Association, American Land Title Association, state and county bar associations, and others.

Then three of Riker Danzig’s Summer Associates provided summaries of some recent decisions affecting the title insurance industry that are posted on the firm’s blog on banking, real estate and title insurance.

Brandon Li, a rising third-year law student at Seton Hall University School of Law, discussed NorthMarq Financial, Ltd. v. Fidelity National Title Insurance Company decided in federal court in Colorado.  In the case, the Court rejected the insured’s claim for defense and indemnity for mechanic’s liens on a construction project for a senior living center. Brandon said the case highlights the need for parties to include specific endorsements if they want coverage for post-policy liens.

Georgia Macedo Cardoso is also a rising third-year law student at Seton Hall University School of Law.  Georgia discussed 771 Allison Court LLC v. Sirianni, in which the New Jersey Appellate Division decided that the failure to disclose a right of first refusal clause in a prior deed prevented good, marketable, and insurable title from being delivered at closing. Georgia said the case confirms the obvious:  any seller of real estate should be forthcoming and disclose a right of first refusal before entering into any real estate contract and should not take shortcuts.

Keshav Agiwal, a rising third-year law student at the University of Richmond School of Law, discussed Nationstar Mortgage, L.L.C. v. Scarville, decided in the Court of Appeals in Ohio.  The case involved the doctrine of lis pendens and the timeliness of a third party’s motion to intervene in a foreclosure litigation. Keshav suggested two major takeaways from this case: one is the importance for parties to know the intricacies of various state law doctrines, such as lis pendens and how it is used in one state versus another. The other big takeaway is that a buyer of property needs to know that property’s history of litigation and what litigation the property may still be involved in or could be in the future.

Riker Danzig partners Jim Lott and Diane Hickey were our special guests for the second episode of Season 3, moderated by our co-hosts Mike O’Donnell and Bethany Abele.  Jim and Diane practice in Riker’s Governmental Affairs practice with extensive experience in Land Use law, regularly dealing with disputes over title, and continually interacting with planning boards and the Department of Transportation at the intersection of title law and real estate development.

They explained to Bethany and Mike that most of their title examination for commercial development comes during thorough due diligence, whether for developers, lenders or investors, which serves to help avoid most title disputes. They advise as to the best courses of action to address a potential title issue in appearances before planning boards, from controversial warehouse projects, and commercial shopping centers to lighting applications for drive-up ATMs. Diane also addressed specific issues faced by cannabis licensees with applications before the local planning and zoning boards, when title insurance companies are not issuing policies because of federal law hurdles for real property transactions with cannabis uses.  Jim also provided insight on being attentive to DOT access rights for properties located along state highways when considering subdividing or changing lot lines, and dealing with easements in the planning board context.

Next, Mike interviewed then-associate Thomas Persico, who is now serving as Assistant General Counsel with JPMorgan Chase.  Tom explained the Community Wealth Preservation Program established by Governor Murphy early this year, which aims to intercept foreclosed-upon residential properties before public auction by giving first and second rights of refusal to purchase after foreclosure.  The goal of the program is to keep generational wealth within families.  Tom addressed how the Act works and the various restrictions, as well as how sales under the Program differ from other foreclosure sales.  Mike and Tom discussed the process of exercising the rights of refusal, exploring how sheriff’s offices are enforcing deed restrictions and addressing complaints.  They also identified areas of the Program that will likely be clarified in the future.

Co-hosts Mike O’Donnell and Bethany Abele kicked off the third season of Title Nerds by welcoming special guest Bushnell Nielsen, author of the well-regarded treatise Title and Escrow Claims Guide, which Mike and Bethany noted they and every title insurance attorney in the country regularly refer to. Bush provided tips on finding and working with expert consultants for title insurance cases, from hiring to trial.

He gives his insight on when you should find the expert, asking specific questions to discern if the expert knows what you need the expert to know, how to work with an expert on his report and testimony and addressing the other side’s expert, and other procedural tips.

Mike then interviewed Kevin Hakansson, an associate in our Title Insurance practice, about Pillai v. Scalia, 103 Mass. App. Ct. 1122 (2024), a case at the intersection of family law, real estate and joint tenancy. Title to the property at the center of the case originated in joint tenancy between three parties, but questions arose after a divorce, a death, a resale and a refinancing, at which point a possible title defect was uncovered. Kevin explains the facts of the case that resulted in the Appeals Court determining that the surrounding circumstances demonstrated that joint tenancy was what parties’ intent dictated.

Special guest Anton Tonev, co-founder of Inspect HOA, joined us for our final episode of Season 2 of Title Nerds. Drawing from his own experience as a member of an HOA, he built this business for real estate professionals and buyers who need to deal with homeowners associations. With 400,000 HOAs in the U.S. and no central database of HOAs, his business has established a niche service, including hoa.com, to assist buyers, attorneys, lenders and escrow officers. He and his team work with clients on several thousand closings a month.

Anton shared examples of scenarios in which Inspect HOA has been able to assist buyers and others in avoiding problems with the rules and regulations that HOAs try to enforce, particularly with regard to leasing out properties.  Mike explored ways that Inspect HOA assists escrow officers and attorneys with avoiding issues during closing transactions when there may be violations or special assessments.  Anton suggested that by automating work, such as how his company has been able to do, it allows clients to be more efficient and productive and minimize errors and mistakes, thereby speeding up the closing process for all parties.

Mike then interviewed Thomas Persico, our newest associate in our Title Insurance practice, about WW3 Ventures v. Bank of N.Y. Mellon, Nos. A23A0719, A23A0720, 2023 Ga. App. LEXIS 536 (Ct. App. Nov. 3, 2023), wherein the Georgia Court of Appeals addresses how constructive and inquiry notice related to a recorded security deed not properly witnessed.

Forensic title expert Joe Grabas was our special guest for Episode 5 of our second season of Title Nerds, joining co-hosts Mike O’Donnell and Bethany Abele.  Joe is a certified title professional, and the Director and Chief Instructor of the Grabas Institute for Continuing Education.  He is also the author of “Owning New Jersey: Historic Tales of War, Property Disputes & the Pursuit of Happiness.”

Mike asked Joe to talk about tidelands issues, a particular concern in New Jersey since the State of New Jersey has rights to the land not only currently flowed by the tide, but formerly flowed by the tide, creating unique challenges for homeowners who may not see any apparent water anywhere near the site; the State of New Jersey may still claim ownership of a large share of that property.  Joe emphasized the importance of always ordering a wetlands survey and a land survey upfront when contemplating the purchase of any property, as both a title issue and a regulatory issue.  Joe also discussed how the NJDEP handles bulkhead bumpouts for waterfront development, another thorny issue, as well as how hearings before the Tidelands Bureau, which considers applications for tidelands grants, are conducted.

Bethany then interviewed Jim Mazewski, an associate in our Title Insurance practice, about Hillary Developer, LLC v Security Title Guarantee Corporation of Baltimore in the New York Appellate Division, 2nd Department, a published decision at 219 A.D. 3d 815 (2023).  Jim explains the complicated details of the case, wherein a Defendant sold property to Hillary Developer under an alternate name, which property had already been sold to a different buyer at a sheriff’s sale to satisfy a judgment.  Hillary Developer later filed suit against three parties including Security Title, which had issued Hillary a title insurance policy, alleging that it had not been informed of the judgment’s existence.  Security Title then brought claims against its issuing agent, SSS Settlement, for fraudulent concealment and prima facie tort, alleging intentional harm and malice.  SSS Settlement moved for dismissal of the claims, which was denied by the trial court but reversed and dismissed on appeal.

Jim said the important takeaway from this case is that, when pleading a fraudulent concealment claim based on a failure to disclose information, it is necessary to identify the specific duty imposing the obligation to make that disclosure.

Our special guest for Episode 4 of our second season of Title Nerds was land title attorney Lance Pomerantz of Land Title Law.  An attorney who provides expert consultant services to the title insurance and real estate industry, Lance shared some very interesting war stories from his “accidental career.”  He has researched land grants back to the Royal Charter, as well as underwater land grants and title disputes involving numerous New York beachfront properties.

Co-host Michael O’Donnell asked Lance about some of the thorniest chains of title Lance has been involved in, some of which had him sounding more like a gritty Harrison Ford character than a land title attorney!

Co-host Bethany Abele then interviewed Kevin Hakansson, an associate in our Title Insurance practice, about Davis v. Reverse Mortgage Solutions, (No. 2:20-cv-632-CWB, 2023 U.S. Dist. LEXIS 42496 (M.D. Ala. Mar. 14, 2023)).  In Davis, two parcels of land, one with a house and the other with the surrounding yard and pool, were merged into a single tax parcel, which passed to the Plaintiff upon her father’s death.  The father had applied for a reverse mortgage three years before his death, and it was not discovered until later that the metes and bounds description for the reverse mortgage only contained the description of the second parcel of property, and not the parcel with the house.

Consistent with the metes and bounds description, the Foreclosure Deed encompassed only the non-residence portion of the property.  The Plaintiff subsequently asserted ownership to the first parcel with the house and filed suit seeking a declaration of ownership.

Ultimately, the federal court granted summary judgment to the Plaintiff, who asserted claims for reformation of both the mortgage and a subsequent foreclosure deed on the grounds of a mutual mistake.  The Court noted that it was “authorized to reform real estate documents in circumstances where—due to a mutual mistake—the executed documents fail to reflect the true intentions of the parties.” It relied upon precedent issued in Federal Land Bank of New Orleans v. Williams, a case in which the Alabama Supreme Court granted reformation of a mortgage when a survey discovered that the mortgage did not properly describe the parcel on which the borrower resided.

Bethany and Kevin agreed that the Court got this right, taking a common-sense approach to determining whether the reverse mortgage should be reformed.  The Court looked to the circumstances and documentation to find that the parties were all aware that the parcel of property with the house was intended to be encumbered.

Surveyor Keith Ludwig, PLS was the special guest for this episode of Title Nerds, in which he discussed with co-hosts Mike O’Donnell and Bethany Abele his experience of over 42 years in the industry.  With a specialty in researching ancient deeds and surveys, Keith shared some of the more fascinating matters he has encountered while conducting land surveys, including serving as a surveyor for a defendant in Atlantic County where title had gone back and forth between the same two families numerous times over 200 years.  He noted that a major misconception about surveyors is that it is their responsibility to determine if a particular easement or covenant affects the property in question.  That is not true.  The surveyor can only state where the easement/covenant lies physically, but cannot advise whether it affects the property; that is the responsibility of the attorney to determine.

Keith noted the importance of looking back at mother deeds when preparing boundary surveys, no matter how much time had gone by, and also discussed the interesting issue of streams and tidelands as boundary lines, when the water flow may have shifted.

Mike and Bethany were interested to hear how surveying has changed during the course of Keith’s career, with GPS revolutionizing modern surveying procedures.

Mike then interviewed Riker Danzig’s newest associate on our Title Insurance team, Kori Pruett, who provided an overview of a New York case involving AirBNBs.  In West Mountain Assets LLC v. Dobkowski, the New York Supreme Court held that the plaintiffs, who were using their home as an AirBNB, were violating a deed restriction limiting use to “single family residential purposes” only.  The plaintiff had brought a suit for alleged interference with its tenants’ (various AirBNB clients) free use of the property, claiming that the defendant neighbors were interfering with use of the road servicing both properties.

Defendants counterclaimed for a declaration that the plaintiff’s use of the property for short-term rentals violated the deed restrictions, which stipulated the property could only be used for single family residential purposes, could not be used for commercial activity, and could not be used for “noxious, dangerous, offensive or unduly noisy activity of any nature.”  Defendants also counterclaimed for adverse possession of a portion of the road parcel.

Kori explained that the defendants were granted summary judgment on the first counterclaim, with the Court holding that the “transient living” nature of AirBNB tenants fell outside the scope of a single-family residential use.  The adverse possession claim was dismissed.

Kori cautioned that this case demonstrates that property owners need to pay attention to any deed restrictions before renting out their home as an AirBNB or VRBO type of rental.

For our second episode of the new season, Title Nerds co-hosts Mike O’Donnell and Bethany Abele interviewed Steve Gottheim, General Counsel of the American Land Title Association (“ALTA”).  Steve discussed some of the primary issues of concern to ALTA and its members, including housing recession possibilities, public policy issues around increased access to affordable housing and, generating the most conversation, real estate and wire fraud.  Steve noted that ALTA is deeply involved in providing education and assistance to title insurance and real estate professionals to help avoid scams and to identify money laundering scenarios.  In addition, ALTA provides a host of educational materials about avoiding wire fraud for consumers and real estate agents.  Steve also touched on the proliferation of title monitoring services, and the need for home buyers to consider enhanced homeowners policies with title insurance fraud protection.

Bethany then interviewed Riker Danzig associate Jim Mazewski about the complex title insurance coverage matter Findlay v Chicago Title Ins. Co., 2022 IL App (1st) 210889 (2022).  Therein, the Illinois Appellate Court, First Division, adopted the reasoning of other outside jurisdictions and held that title insurance claims were exempt from Illinois’ “complete defense rule,” which requires that an insurer provide a defense on all claims raised against an insured even if only one of the claims is covered.

In this matter, landlocked homeowners were able for years to easily access the Lake Michigan beach via  a beach easement across a portion of a neighboring lot, Lot 5.  However, when Lot 5 was purchased by a new owner, the new owner objected to neighbors cutting across his property and filed a lawsuit to prevent them from doing so.  The landlocked homeowners sought a declaratory judgment, implying that an ingress-egress easement existed on Lot 5.  The new owner of Lot 5 won that suit, and then sued Chicago Title, which had received claims from both parties to the first lawsuit as they were both insured by Chicago Title.  The plaintiff’s suit against Chicago Title alleged conflict of interest, failing to provide coverage for all counts of the earlier litigation, and failing to approve of the plaintiff’s retention of a new attorney. Failing at trial on all claims, the plaintiff appealed.

In a decision in line with a growing body of caselaw, the appellate court found title insurance companies are not subject to the “complete defense rule.”  The Court also found that Chicago Title had the right to select counsel of its choosing, not the insured’s.   Tune in to the podcast for an in-depth discussion of the Appellate Court’s consideration of the plaintiff’s claims leading to the decision.

Title Nerds is excited to begin its second season of exploring title insurance and real estate litigation issues that Riker Danzig attorneys see in our practice.  In this first episode of the new season, co-hosts Mike O’Donnell and Bethany Abele enjoyed drawing on insights from one of our esteemed Of Counsel, New Jersey title insurance guru Vince Sharkey.  Vince provided entertaining conversation about his journey into and through the title insurance world, and some of the significant cases and challenges in his practice, including recommendations for lawyers who represent title insurance companies as to how to effectively approach cases and work well with clients.

Next, Bethany interviewed associate Kevin Hakansson about a case decided on June 9, 2022 by the NJ Supreme Court, Sullivan v. Max Spann Real Estate & Auction Co., 2022 N.J. LEXIS 512.  In the case, the Supreme Court decided that the mandatory three-day attorney review clause that must be included in contracts for sale of residential real estate is not required in absolute auction sales.  The case arose from the auction of property in Bernardsville, NJ, after which the successful bidder was not able to satisfy her obligations under the contract and did not purchase the property, spurring a suit by the seller against the bidder and the realtor who conducted the auction.  At trial and on appeal, the court found for the plaintiff, holding that “a private real estate auction sale is not the consumer type contract contemplated in [State Bar Ass’n], and therefore, the three-day attorney review period is not required in such a sale.”  With the Supreme Court’s affirmation, this is a case that attorneys and real estate professionals need to note before their clients participate in an absolute auction sale.  Listen in for more details and analysis.