Fidelity National v. Osborn III Partners LLC

Summary

The court held that Exclusion 3(a) in the title insurance policy applies only when the insured's conduct actually caused the defect, lien, encumbrance, or adverse claim. It rejected rules that make contractual authority to withhold construction funding dispositive or that automatically infer causation from a funding cutoff followed by mechanics' liens. Because unresolved factual questions prevented application of the causation framework, the court reversed and remanded for further factfinding and application of the governing standard.