First American Title Insurance Co v. Johnson Bank

Summary

The court held that an ambiguous lender's title insurance policy permits measuring diminution-in-value damages as of the policy-issuance date when an undisclosed title defect prevents the property's intended use and causes the borrower's default and foreclosure. Because the record did not establish that the title defect caused the default and foreclosure, the court reversed the superior court's judgment for the insurer and remanded for that determination. The court also vacated the court of appeals' opinion because that court had improperly directed entry of judgment for the bank without evidentiary support for causation.