X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Reconveyance Services, Inc., sued the Texas Department of Insurance for a declaration that charging additional fees for the services Reconveyance wished to provide in Texas is not prohibited by the Texas Insurance Code. Because we conclude that Reconveyance has pleaded an ultra vires action, in light of our decision in City of El Paso v. Heinrich, 284 S.W.3d 366 (Tex. 2009), we reverse the court of appeals’ judgment and render judgment dismissing Reconveyance’s suit for lack of subject-matter jurisdiction.

According to its pleadings before the courts below,*fn1 Reconveyance is a Washington state corporation that provides what it describes as “post-closing mortgage release services” in several states other than Texas. When a buyer purchases a residential property, the lender’s lien on the property often is not released by the seller’s lender until some time after closing, securing the lender in the event the transaction does not close. Sometimes lenders neglect to file a release of the original seller’s mortgage, and that pre-existing lien could interfere with the buyer’s later attempts to sell the home or refinance. For a fee, Reconveyance would undertake to obtain a release of that prior existing mortgage at the time the buyer initially purchases the home to ensure subsequent marketability of the buyer’s title. To market its services to the widest number of Texas consumers, Reconveyance desired to have its services listed by Texas title agents as an optional, paid service available to buyers. Prior to doing so, however, a Reconveyance employee initiated communications with Department employees to determine how the Department would classify Reconveyance’s proposed business model.

By way of the Texas Title Insurance Act, the Texas title insurance industry is to be “completely regulate[d]” by the Department. TEX. INS. CODE § 2501.002. By law, the Texas Commissioner of Insurance caps the premiums charged by title agents for three categories of services: title insurance, title examinations, and “ closing the transaction.” See id. § 2501.003(8) (defining premium); id. § 2501.006 (defining “closing the transaction”); id. § 2703.151 (directing the commissioner to fix and promulgate premium rates). A Department employee’s response to Reconveyance’s inquiry noted that he understood prior lien release services such as those proposed by Reconveyance to be among the costs to be borne by title agents.*fn2 The Department employee’s response noted that the Department had initiated disciplinary action against at least one title agent for charging a fee for services similar to Reconveyance’s. Title agents refused to list Reconveyance’s service as an optional service to home buyers without Department approval, limiting Reconveyance’s potential customer base.

 
Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.

More From ALM

Premium Subscription

With this subscription you will receive unlimited access to high quality, online, on-demand premium content from well-respected faculty in the legal industry. This is perfect for attorneys licensed in multiple jurisdictions or for attorneys that have fulfilled their CLE requirement but need to access resourceful information for their practice areas.
View Now

Team Accounts

Our Team Account subscription service is for legal teams of four or more attorneys. Each attorney is granted unlimited access to high quality, on-demand premium content from well-respected faculty in the legal industry along with administrative access to easily manage CLE for the entire team.
View Now

Bundle Subscriptions

Gain access to some of the most knowledgeable and experienced attorneys with our 2 bundle options! Our Compliance bundles are curated by CLE Counselors and include current legal topics and challenges within the industry. Our second option allows you to build your bundle and strategically select the content that pertains to your needs. Both options are priced the same.
View Now

Elite Trial Lawyers 2021

July 29, 2021
Virtual

The National Law Journal Elite Trial Lawyers recognizes U.S.-based law firms performing exemplary work on behalf of plaintiffs.


Register

BenefitsPRO Broker Expo 2021

May 18, 2021 - August 18, 2021
Virtual / San Diego, CA

The premier educational and networking event for employee benefits brokers and agents.


Register

African Legal Awards 2021

September 03, 2021
TBD

The African Legal Awards are set out to recognise exceptional achievement from Africa s legal elite.


Register

JUNIOR CIVIL LITIGATION ASSOCIATE (ATLANTA, GA)

Atlanta, Georgia, United States

Our client, the senior Litigation Partner at a well-regarded, mid-sized Atlanta business boutique, has asked for our assistance in identifyi...


Apply Now ›

Attorney- Simsbury, Connecticut

Simsbury, Connecticut, United States

Farber, Brocks & Zane, LLP is seeking an attorney for our Simsbury, CT office to join our growing and active insurance coverage practice gro...


Apply Now ›

Insurance Coverage Attorney- Long Island

Garden City, New York, United States

Farber, Brocks & Zane, LLP is seeking to add legal talent to its active and growing insurance coverage practice group. For our Garden City, ...


Apply Now ›

VAN DER VEEN, O NEILL, HARTSHORN, AND LEVIN

07/27/2021
TLI Web

VAN DER VEEN, O NEILL, HARTSHORN, AND LEVIN is pleased to welcome Frank Breitman, Esq. a talented and respected litigator to our ranks of trial lawyers.


View Announcement ›

HARWOOD LLOYD, LLC

07/26/2021
NJLJ Web

HARWOOD LLOYD, LLC Welcomes Beth L. Barnhard, Esq. Beth has joined the firm as Counsel in the Wills, Trusts and Estates Department. She is Certified to be an Elder Law Attorney (CELA) by the ABAaccredited National Elder Law Foundation.


View Announcement ›

SNYDER SARNO D'ANIELLO MACERI & DACOSTA

07/26/2021
NJLJ Web

SNYDER SARNO D'ANIELLO MACERI & DACOSTA is Proud to Announce the opening of New Morristown Office!


View Announcement ›