First American Title Insurance Company, a California Corporation, Plaintiff/appellee v. Johnson Bank, a Wisconsin…

Summary

The court held that, when an undisclosed title defect prevents the property's known intended use and causes the borrower to default, loss under a lender's title insurance policy generally is measured as of the policy-issuance date rather than the foreclosure date. Because the record did not establish that the title defect caused the borrowers' default and foreclosure, the court vacated the court of appeals' decision, reversed the superior court's judgment, and remanded for further proceedings. Chief Justice Bales, dissenting, would have used the foreclosure date because title insurance does not impose a duty to discover or disclose defects.