MILTON RUDOLPH, ET AL., APPELLANTS,
v.
TITLE & TRUST COMPANY OF FLORIDA, AND DADE COMMONWEALTH TITLE & ABSTRACT COMPANY, APPELLEES
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Purchasers of leasehold condominium units sued their title insurers for breach of policy, claiming the insurers had insured fee simple interests when only leaseholds were obtained. The court affirmed a directed verdict for the insurers, holding that title insurance indemnifies against defects in the actual title obtained, not against failure to obtain a different type of interest, and that the insurers had no obligation to insure fee simple title they never agreed to provide.
Title insurance indemnifies against defects in the title to property actually purchased, not against failure to obtain a different type of interest. The insurers had no obligation to produce or indemnify fee simple title and were therefore entitled to a directed verdict, as the insurers' only obligation was regarding the leasehold interests actually conveyed.
[1] Title insurance policies only indemnify against defects in the title to the property actually purchased by the insured.
[2] A title insurance policy does not obligate the insurer to produce or indemnify fee simple title when the insured purchased a leasehold estate.
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Join FLexlaw to unlock all legal intelligence“The purpose of the insurance is to indemnify an insured against loss through defects of title to purchased property.”
Establishes the fundamental scope and purpose of title insurance coverage.
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Join FLexlaw to unlock all legal intelligenceAppellants purchased leasehold estates in condominium units at Eastern Shores White House, with their interests evidenced by documents acknowledging t…
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BASKIN, Judge.
We affirm the Final Judgment entered by the trial court subsequent to the direction of a verdict in favor of appellees. Appellants purchased leasehold estates in condominium units at the Eastern Shores White House. Their purchases and the nature of their interests were evidenced by documents they signed including “Formal Purchase Agreement and Receipt”, condominium deed, and “Acknowledgment and Acceptance by Grantee.” In each of these documents, appellants acknowledged by their signatures that they accepted leasehold titles to condominium units upon land which was the subject of a ninety-nine year lease to the developer. The Declaration of Condominium also reflected the ninety-nine year lease.
In a class action, appellants sought to collect damages for breach of title insurance policies which insured fee simple interests in the condominium units.1
Appellants, having purchased leaseholds, were insured only against defects in their title to the leaseholds. The title insurance company that issued the insurance upon purchase should have been aware from public records that leaseholds and not fee simple interests were obtained by the purchasers, but through inadvertent error, the title insurance company misstated the interests it insured. Furthermore, the policy excluded loss or damage by reason of the original ninety-nine year lease from Gladys Goldman as trustee-lessor to Milton F. Stein-hardt as lessee.
Appellants were not induced to purchase their properties by the title insurance they later obtained. The purpose of the insurance is to indemnify an insured against loss through defects of title to purchased property. See 9 Appleman, Insurance Law and Practice, § 5201 at 1 (1981); 18 Fla.Jur., Insurance § 13 (1971). Appellants’ claims were not predicated upon defects in title but upon the failure of the title insurance company to produce fee simple title. The title insurance company had no obligation to produce or indemnify fee simple title and was therefore entitled to directed verdict.
Upon consideration of the appeal and cross-appeal, we affirm the trial court’s decision.
. During the jury trial, appellees sought a directed verdict. At the close of the evidence, the trial judge indicated that he had decided to grant the directed verdict but would permit the jury to decide the case so that in the event of reversal he would not be forced to retry the matter. The jurors returned a verdict for appellants in the sum of $2,380,000.