07.01.07
ALTA Suggests Tort Claims fall on Abstractors
I was VERY disappointed to see that the American Land Title Association (ALTA) gave an Amicus Brief that states that abstractors (not title companies) are liable in tort for negligent searches (I understand that to mean searches with errors).
My (agreed, rather limited) understanding of the ramifications of a tort liability, is that an Abstractor could reasonably be sued not just for the cost of a search when an error is made, or even for the cost of a missed mortgage for example, but rather they could also be sued for such things as “pain and suffering,” or “damages” for errors. In my opinion, this is well above what an abstractor gets paid for, and, if tort liability truly is the case, I would suggest that all Abstractors take a good look at their E&O insurance.
The brief suggests that a search of title is done for the benefit of the insurer who bears the risk of liability in the event of a faulty search. “An abstracter of title, by contrast, is in the business of supplying information for the guidance of others and has long been held liable in tort for negligent searches.”
While Amicus Brief means “Friend Brief,” certainly ALTA is no friend of Abstractors in this response. And I thought abstractors worked hand-in-hand with the title insurance industry… how sad.