Title insurance is a complicated area of Texas law. One example is the distinction between escrow cases and cases against the title insurance company arising out of issuance of the title insurance policy and conduct of the title insurance claim. Two recent cases prove instructive; they address the duties owed by a title insurance agent when acting as an escrow agent. After reviewing the courts’ holdings, I’ll highlight areas where the analysis fell short.
The first case is James v. Shavon Ltd., decided by San Antonio’s 4th Court of Appeals on Dec. 5, 2012. According to the opinion, the seller and the buyer entered into a contract to sell real property. The title insurance agent was named as the escrow agent. The transaction fell apart once, and the parties entered into a mediated settlement agreement, which was incorporated into the second contract to sell real property. The second transaction fell apart when the buyer insisted on a price reduction due to the property condition.
