Important Policy Provision Negated by Vagueness
In a decision with far-reaching implications, the Georgia Court of Appeals has concluded that an important limitation on liability in Section 7 (a) (ii) of the 1992 ALTA lender’s policy is “too vague and uncertain to be enforced.” Doss & Associates v. First American Title Insurance Company, Inc., No. A13A0989 (Ga. Ct. of Appeals, Dec. 13, 2013). “Simply put, the phrase at issue is incomprehensible and cannot support any clear meaning, much less two alternate meanings, for the policy language employed by First American when drafting Section 7 (a) (ii) of the policy.” Ouch!
This issue splintered the Court, generating a panoply of full and partial concurrences and dissents. A three-judge panel had previously reached a similar result, and the decision following an en banc rehearing just amplified the differences. (Please note: This opinion concerns three consolidated appeals, of which we have only focused upon one.) A petition for certiorari has been filed with the Georgia Supreme Court. Under Supreme Court rules, “a petition for the writ will be granted only in cases of great concern, gravity, or importance to the public.” Given the importance of this issue to title insurers and lenders, we hope that the Court grants the petition.
Comment:
This is the latest, and clearly the most important, of a spate of recent appellate cases that have construed this provision. Despite the adoption of the 2006 policy forms, there are many 1992 policies still in force. Hence, the ultimate resolution of this case can have nationwide repercussions.