Branch Banking & Trust Co. v. Chicago Title Insurance
214 N.C. App. 459
N.C. Ct. App.2011Background
- Chicago Title issued a 2003 title policy to BB&T insuring the 2003 deed of trust encumbering a 5.678-acre tract in Warren County; the Centura deed of trust (1998) was not listed as an exception in the policy.
- A 2005 BB&T deed of trust on the same property was not insured by Chicago Title, though Chicago Title deposited the premium for title insurance.
- BB&T later discovered in 2005–2006 that the Centura deed of trust encumbered land not described in the 2003 policy; Centura foreclosures ensued, and BB&T filed a claim with Chicago Title in 2007 seeking coverage for losses related to Centura.
- BB&T foreclosed on the 2003 deed of trust in 2007 and the property, including the contested tract, was sold; Chicago Title denied BB&T’s claim in 2008.
- BB&T sued Chicago Title in 2008 for breach of contract and negligence; Chicago Title counterclaimed for reformation or declaratory relief asserting no loss or damage.
- The trial court granted BB&T summary judgment on several defenses but allowed trial on prejudice under the policy; the court ultimately awarded BB&T $404,000 plus prejudgment interest and costs, which Chicago Title appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 2003 policy should be reformed for mutual mistake | BB&T contends there was no mutual mistake; Chicago Title argues there was mutual mistake. | Chicago Title argues a mutual mistake existed as to the land covered. | Reformation denied; no admissible mutual-mistake evidence. |
| Whether the No-Loss/Damage exclusion bars BB&T recovery for Centura loss | BB&T argues exclusion does not bar recovery for the Centura loss. | Chicago Title argues the Centura loss is excluded because debt was extinguished. | Exclusion did not bar recovery; 2005 deed extended the debt. |
| What statute of limitations governs claims against the Banzet Firm | Chicago Title argued §1-52(9) applies; BB&T argues timely action under its theory. | Banzet Firm argued appropriate limits and prejudice standards. | Not time-barred; §1-52(9) applicable but not prejudicially barred. |
| Whether Chicago Title was prejudiced by BB&T’s late notice under the policy | BB&T asserts no prejudice to Chicago Title under §3. | Chicago Title argues prejudice from late notice barred relief. | No prejudice shown; §3 does not apply. |
Key Cases Cited
- Hice v. Hi-Mil, Inc., 301 N.C.647 (N.C. 1981) (mutual-mistake and contract reform standards; strong presumption in favor of instrument as written)
- Matthews v. Van Lines, 264 N.C.722 (N.C. 1965) (mutual mistake requires a prior oral agreement and its omission from the writing)
- Carter v. Am. Ins. Co., 190 N.C.App.532 (N.C. App. 2008) (pleading to reform by analogy to mistaken but adopted writings)
- Woods v. Insurance Co., 295 N.C.500 (N.C. 1978) (contract interpretation: give effect to all terms; enforce contract as written)
- Sessler v. Marsh, 144 N.C.App.623 (N.C. App. 2001) (standard for competent evidence in non-jury trials; binding findings if supported)