Lance R. Pomerantz
Attorney at Law

Land     Title     Law

“Constructive Notice”  The  Newsletter

Excerpted from the January 13, 2014 mailing of "Constructive Notice":

Title Insurance Underwriting

"Fraudulent Joinder"

In an action to quiet title, Plaintiff asserted “no title company … will issue a policy of title insurance based upon a foreclosure deed arising from a foreclosure [of] a homeowners association lien, without a court order of quiet title against the former owner” and joined the former owner as a defendant. Including the former owner destroyed diversity, seeming to preclude removal to Federal District Court. The Court disagreed.

In Daisy Trust v. JPMorgan Chase Bank, NA, et al., (Civ. No. 2:13-cv-00966, U.S.D.C., D. Nevada, Dec. 11, 2013), the Court held that the earlier foreclosure of the HOA lien extinguished all of the former owner’s rights or interests in the Property. That “private companies may choose, as a business decision, not to issue title insurance under such circumstances is irrelevant. The critical question is whether [Plaintiff] has a quiet title claim against [Former Owner]. .… It does not. A quiet title claim is not forced into existence merely because a private enterprise refuses to issue title insurance in the absence of a court order on a hypothetical claim.”


The plaintiff has filed a Notice of Appeal. The Constructive Notice Newsletter will continue to monitor and report any substantive developments.