Amzak Capital Management v. Stewart Title of Louisiana, 744 F.3d 352

WFA purchased a Louisiana paper mill for $16 million in 2009; Amzak funded a loan workout and sought to record a mortgage secured by the mill.
STG/STL issued a title policy for Amzak’s loan, but the mortgage was recorded without a property description.
CAoba’s planned capital infusion was aborted due to title deficiencies; Amzak’s loan and security were affected.
WFA filed for Chapter 11 bankruptcy; the mill operated briefly, then shut down; Amzak sought to recover losses under the policy.
Bankruptcy proceedings and an adversary proceeding led to cross-motions for summary judgment on Amzak’s loan-loss claim and related fees; the district court granted summary judgment for STL/STG/Admiral, which Amzak appealed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the title policy indemnifies actual loss from a title defect.	Amzak: policy covers loss caused by title defect; loss accrued at loan origination.	STL/STG: policy covers actual loss from title defect, not mere defect; no loss shown.	No breach; no actual loss from title defect shown.
Whether Amzak’s loss is measured at loan closing or at later time.	Amzak: breach at loan time; loss measured then.	Loss must be actual; later events not insured loss.	Loss not established at any time; no coverage.
Whether Citicorp’s warranty rationale should govern this case.	Citicorp supports breach at loan if mortgage unenforceable.	Citicorp not controlling; First State Bank controls; indemnity requires actual loss.	Citicorp rejected; follow First State Bank/indemnity for actual loss.
Whether Amzak can prove causation for negligence.	Amzak: title defect plus expected capital infusion caused loss.	No substantial causation; multiple variables and lack of proof of infusion impact.	No genuine issue of material fact on causation; negligence not shown.
Whether legal causation supports liability given policy terms.	Policy covers loss by reason of title defect; legal causation would align.	Policy does not guarantee mortgage validity or market value; waiver in bankruptcy.	Legal causation not satisfied under policy terms.

First State Bank v. American Title Ins. Co., 91 F.3d 141 (5th Cir.1996) (indemnity for actual loss; title did not fail here)
Citicorp Savings of Illinois v. Stewart Title Guaranty Co., 840 F.2d 526 (7th Cir.1988) (breach at loan time; tender not automatic cure for damages)
First Midwest Bank v. Stewart Title Guar. Co., 218 Ill.2d 326 (Ill. 2006) (Illinois Supreme Court; title insurer not in the information-supply business; liability defined by contract)
Focus Inv. Assocs. v. Am. Title Ins. Co., 992 F.2d 1231 (1st Cir.1993) (indemnity limited to actual loss; not guaranteed value)
Gibraltar Sav. v. Commonwealth Land Title Ins. Co., 905 F.2d 1203 (8th Cir.1990) (indemnity for actual loss; defense of title defects limited to loss)
JP Morgan Chase Bank, N.A v. First Am. Title Ins. Co., 725 F.Supp.2d 619 (E.D.Mich.2010) (courts require actual loss causation under title policy)
Lustig v. Lustig, 961 F.2d 1162 (5th Cir.1992) (uses causation principles for determining coverage by policy)