Construction Law

Proper Measure of Damages For a Claim Against Title Insurance for Newly Discovered Encumbrance is the Difference Between the Value of the Entire Tract While Encumbered and the Value of the Entire Tract Without Encumbrances.

By Ryan McCabe

    In a recent case before the S.C. Supreme Court, Stanley v. Atlantic Title Ins. Co., 377 S.C. 405, 661 S.E.2d 62 (2008) a landowner purchased lakefront property, a portion of which, unbeknownst to the purchaser and title insurance company, served as a drain field for a neighboring tract of land. The purchaser sued the title insurance company and the case came before the South Carolina Supreme Court on the issue of measure of damages. The landowner valued the damages as the per-acre value multiplied by the number of acres affected. In contrast, the insurance company offered an appraiser?s analysis. The appraiser valued the damage by the difference between the value of a portion of the property without the drain field and the value of the same portion with the drain field. Because the purpose of title insurance is to place the insured in the position that he thought he occupied when the policy was issued, the measure of damages is the difference between the encumbered tract and the same tract without encumbrances. 

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Full post as published by The South Carolina Construction Law Blog on July 01, 2008 (boomark / email).