Marketable Title case in MN - food for thought
Posted: Sat Feb 29, 2020 9:11 pm
For your leisure reading.
A Supreme Court case in Minnesota, wherein a title was found unmarketable due to a legal description being found ambiguous, based upon the word of attorneys and title officers alone. Neither in the trial, nor appellate, nor supreme courts was one single Surveyor called to testify as to whether or not the legal was susceptible of location, which apparently up until then had been the test of whether a legal description was sufficient or not, and therefore marketable. Is this case good law? Not in the attached opinion of a Surveyor and Attorney.
I don't have extensive knowledge of the state of the law on marketable title in CA, but as far as I know the test of a legal description is "can it be located on the ground by a surveyor". If it can, it is acceptable, and I would presume therefore marketable. In reading this case a few questions and observations come to mind relating to the functions of the Title Company and Surveyor involved in a sale and development project.
1. Who has the right to decide if the legal description is acceptable, Surveyor or Title Co? What if they disagree?
2. The surveyors and title co's collectively must be on the same page on this issue. In this case, the first Title Co. signed off, only to be caught out by the second Title Co. who wouldn't issue coverage. Bingo - litigation! This leads to Title Companies refusing to issue insurance based not on actual well-founded concerns, but out of fear of other future Title Co.'s refusing to issue insurance. In effect, they are insuring against themselves - this is not good for the public. Likewise, Surveyors must be able to uniformly provide good opinions regarding difficult boundaries to Title Co.'s, or Title Co.'s will be at risk of taking the word of one surveyor that a legal was good, only to have another later surveyor find the legal "ambiguous" or just as bad locate it differently. This leads to Title Co's refusing to issue insurance based on the fear of future Surveyors providing them different opinions than their present Surveyor.
3. If extrinsic evidence is used by the Surveyor to control a boundary on for example an ALTA survey, but the Title Company feels that they are only insuring the record legal description, and would therefore like the map drafted to reflect only the "deed lines", doesn't this amount to the Title Co. overstepping their mark, and playing the role of the Surveyor?
4. In the end, whose job is it to opine on where the line is? The Title Co. or the Surveyor? I always thought it was the Surveyor's.
This case seems like a good example of what we don't want to happen in California: A case where neither the Title Companies, nor the attorneys, thought to consult a surveyor before litigating their way to Supreme Court over a boundary they themselves alone determined was ambiguous. This points up the lack of awareness of many of the professionals in the development process as to the role of the surveyor and the value of it. It also reveals the need for Surveyors who are knowledgeable in such areas to speak up when in such situations. Frequently the surveyor is the one in the room with the most knowledge of the intersection of title, boundary and law, since that is where we spend all of our time. We need to do a better job of educating our partners in the development process on this.
Could you see this situation happening in California, or do we not need to worry about this? What say you?
A Supreme Court case in Minnesota, wherein a title was found unmarketable due to a legal description being found ambiguous, based upon the word of attorneys and title officers alone. Neither in the trial, nor appellate, nor supreme courts was one single Surveyor called to testify as to whether or not the legal was susceptible of location, which apparently up until then had been the test of whether a legal description was sufficient or not, and therefore marketable. Is this case good law? Not in the attached opinion of a Surveyor and Attorney.
I don't have extensive knowledge of the state of the law on marketable title in CA, but as far as I know the test of a legal description is "can it be located on the ground by a surveyor". If it can, it is acceptable, and I would presume therefore marketable. In reading this case a few questions and observations come to mind relating to the functions of the Title Company and Surveyor involved in a sale and development project.
1. Who has the right to decide if the legal description is acceptable, Surveyor or Title Co? What if they disagree?
2. The surveyors and title co's collectively must be on the same page on this issue. In this case, the first Title Co. signed off, only to be caught out by the second Title Co. who wouldn't issue coverage. Bingo - litigation! This leads to Title Companies refusing to issue insurance based not on actual well-founded concerns, but out of fear of other future Title Co.'s refusing to issue insurance. In effect, they are insuring against themselves - this is not good for the public. Likewise, Surveyors must be able to uniformly provide good opinions regarding difficult boundaries to Title Co.'s, or Title Co.'s will be at risk of taking the word of one surveyor that a legal was good, only to have another later surveyor find the legal "ambiguous" or just as bad locate it differently. This leads to Title Co's refusing to issue insurance based on the fear of future Surveyors providing them different opinions than their present Surveyor.
3. If extrinsic evidence is used by the Surveyor to control a boundary on for example an ALTA survey, but the Title Company feels that they are only insuring the record legal description, and would therefore like the map drafted to reflect only the "deed lines", doesn't this amount to the Title Co. overstepping their mark, and playing the role of the Surveyor?
4. In the end, whose job is it to opine on where the line is? The Title Co. or the Surveyor? I always thought it was the Surveyor's.
This case seems like a good example of what we don't want to happen in California: A case where neither the Title Companies, nor the attorneys, thought to consult a surveyor before litigating their way to Supreme Court over a boundary they themselves alone determined was ambiguous. This points up the lack of awareness of many of the professionals in the development process as to the role of the surveyor and the value of it. It also reveals the need for Surveyors who are knowledgeable in such areas to speak up when in such situations. Frequently the surveyor is the one in the room with the most knowledge of the intersection of title, boundary and law, since that is where we spend all of our time. We need to do a better job of educating our partners in the development process on this.
Could you see this situation happening in California, or do we not need to worry about this? What say you?