Bulletin: SLS2013003

Dear Associates:

Your Title Insurance Underwriting Agreement (Issuing Agency Agreement) with Stewart appoints you as an issuing agent SOLELY for issuance of Stewart’s Title Policies or STGC approved Guarantee forms. You must not use Stewart’s name on any other product including any product of search service. Do not provide a search product on a Stewart Commitment and do not reference Stewart on a search product in any manner, such as by adding “Issuing Agent for Stewart.”

In Abengoa Bioenergy U.S. Holding, Inc. v. Chicago Title Insurance Company, a jury of the Circuit Court of St. Louis County (MO) returned a verdict in excess of $48,000,000.00 in favor of Abengoa against Chicago Title. Judgment on the verdict was upheld on appeal.

Chicago Title performed a radius search which failed to include seven property owners in a certified list of property owners who were legally entitled to notice of Abengoa’s proposal to rezone property to build an ethanol plant. The court refused to “enforce a limitation of liability clause set forth by Chicago Title limiting its liability to the $500 that Abengoa paid for the certificate.” The court found that the limitation clause was not a part of the contract formed when the parties entered into it during a telephone call placing the order; Chicago Title could not subsequently unilaterally amend the contract to add a limitation of liability.

You must recognize your enormous potential liability for an erroneous search. Should you choose to provide search products to customers, do not reference Stewart in any fashion on the product. Particularly, do not use Commitment pages for the documentation for a pure search product not intended to conclude in a title insurance product. 

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

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