Lance R. Pomerantz
Attorney at Law

Land     Title     Law

“Constructive Notice”  The  Newsletter

Excerpted from the June 25, 2014 mailing of "Constructive Notice":

No Good Deed Goes Unpunished

Multiple boundary disputes erupted concerning the Insureds land. The title insurer accepted the claims and tendered defenses. It attempted to resolve the disputes among the neighbors without litigation. When that approach failed, the insurer instituted a quiet title proceeding and resolved all disputes in the insureds favor. Another satisfied customer, right? Wrong!

The insured then commenced an action against the insurer in Federal Court seeking damages. They claimed breach of contract, breach of the duty of good faith and fair dealing, detrimental reliance, and violation of the New Jersey Consumer Fraud Act. Following summary judgment for the insurer on all counts, the Third Circuit revived one of the breach of contract claims. The Court saw a question of fact concerning the reasonableness of [the insurers] efforts to cure the title defects and whether it had done so in a reasonably diligent manner. Granelli v. Chicago Title Insurance Company, et al., No. 13-1024 (Third Cir., June 17, 2014)(Not Precedential).


The evidence showed a 20-month delay between the notice of claim and the filing of suit. In this Courts view, this delay alone creates a strong inference that [the insurer] failed to act with reasonable diligence in curing the Granellis' title defects. Coupled with the fact that the insurer had undergone an extensive administrative reorganization while the claim was pending, this was enough to warrant a fact-finders determination of reasonableness, even though other dispute-resolution methods were being pursued. Most disturbing is that the Court seems to be creeping toward a bright-line rule of what constitutes unreasonable delay. An earlier (unrelated) case had found that a 16-month delay was unreasonable, and the Granelli Court went out of its way to point out that the delay was four months longer than the delay in [the earlier case].

Full Disclosure: one or more individuals named in the opinion are personal acquaintances of Lance R. Pomerantz and/or subscribers to The Constructive Notice Newsletter. Mr. Pomerantz has no connection with the Granelli case itself.