Title Insurance Case

Grand Prairie and Fort Worth holders of a title insurance policy might find this recent case of interest.
The Court of Appeals, Tyler, issued an opinion recently in the case styled, Howard L Straily and Tommie J. Straily v. Lawyers Title Insurance Corporation. Here is some background information:
The Strailys own a home built on a pier and beam foundation. Upon noticing that water had pooled beneath their home and believing the source of the pooling to be a water leak, they hired a plumber to investigate the problem. The plumber pumped water from beneath the home and conducted a visual inspection of the area and discovered an uncapped sewer line that was depositing a large quantity of sewage and water onto the property.
Thereafter, the City of Van was contacted and the problem reported. The City sent workers to the home and determined the sewer line ran directly beneath the house. The City, thereafter, directed that contractors reroute the main sewer line around the home and cap it.
The City never removed the main sewer line from beneath the house. Nor did it claim that it was entitled to keep the line there. Moreover, the City disclaimed any easement or other interest in the Strailys property. A recorded easement was never found.
Because the City’s main sewer line was located under their home, the Strailys presented a claim to LTI under a title insurance policy covering the property. Unable to resolve their claim with LTI, this lawsuit was filed against LTI for breach of contract. LTI filed a no evidence motion for summary judgment it which it claimed that the Strailys have (1) no evidence that they had a covered loss under the title policy, (2) no evidence that LTI breached its duties under the title policy, and (3) no evidence that the alleged breach by LTI caused the Strailys damages. In response, the Strailys argued that they demonstrated that LTI failed to detect an easement existing on their property because the City’s main sewer line was located under their house. The Strailys further contended that LTI’s failure to detect the easement caused their damages. The trial court ruled in favor of LTI.
In upholding the trial court ruling, this appeals court applied the applicable law to the facts presented in the case and said that the Strailys title insurance policy with LTI protects the Strailys if someone else owns either an interest in their property or an easement on their property. Because the flooding on their property caused by the City’s main sewer line is a defect in the condition of the property and not necessarily a defect in the title, the Strailys cannot rely solely on the flooding as evidence that LTI breached the contract.
Even thought the City is not claiming any interest in the Strailys property, the Strailys argued that their title was encumbered. The Strailys had not argued that LTI failed to discover an express easement in favor of the City. And there was no evidence of any writing granting the City an easement to any portion of the property.
The Stailys argue that they presented evidence that the City had a prescriptive easement that encumbered their title to the property. The record reflects that the City laid the main sewer line in the 1950s. Accordingly, the main sewer line had been in place much longer that the necessary ten years to establish a prescriptive easement when the Strailys made their claim to LTI. However, the other elements of a prescriptive easement are not all demonstrated by the record, and the absence of any one element is fatal to the claim of a prescriptive easement. Here, by the Strailys own admission, the sewer line was a hidden easement. To be a prescriptive easement, the easement must have been open and notorious. Accordingly, the court concluded that the Strailys failed to present evidence that the City had a prescriptive easement encumbering the Strailys property.
Cases involving title insurance policies are different than other insurance types of cases. In addition to experienced Insurance Law Attorneys, most real estate attorneys can be helpful in resolving title insurance disputes.