Izynski v. Chicago Title Insurance Co.
963 N.E.2d 592
Ind. Ct. App.2012Background
- Izynskis purchased Ashton property burdened by a publicly recorded 50-foot easement not disclosed in title commitments Chicago Title issued.
- Commitments issued before Izynskis’ purchase were for a different prospective buyer, McLane; later commitments were revised to show Izynskis as buyers.
- 1972 'Agreement for Exchange of Land and for Granting Flowage Easement' between Ashton and Shorewood appeared in commitments; it contemplated future access for a dam but did not establish an easement.
- Closing was delayed; easement location was later adjusted to accommodate existing buildings, reducing Izynskis’ lot value and prompting a price concession.
- Trial court found breach of contract; Izynskis sought damages for tort liability (negligent misrepresentation) but court held potential privity issues, prompting remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was there contractual privity for breach of contract? | Izynskis in privity via title commitments issued for their purchase. | No privity because commitments were issued to McLane and not Izynskis at contract formation. | No contractual privity; breach claim rejected. |
| Can Izynskis pursue negligent misrepresentation without privity? | Tort liability exists for preliminary commitments regardless of privity. | If privity exists, only contract remedies apply; otherwise unclear. | Remanded to determine negligent misrepresentation viability. |
| Did the 1972 agreement give notice of the 1979 easement? | The commitment’s 1972 inclusion put buyers on notice of the easement. | 1972 agreement merely contemplated future access; did not create or notice the easement. | No actual or constructive notice from the 1972 agreement. |
| Did the trial court properly handle damages on remand for tort theories? | Damages proven by property value impact should be recoverable. | Damages hinge on tort theory; need proper assessment. | Remanded to determine tort damages if negligent misrepresentation exists. |
Key Cases Cited
- Integrity Land Title Corp. v. U.S. Bank, 929 N.E.2d 742 (Ind. 2010) (tort liability for negligent misrepresentation in preliminary title commitments where no privity)
- Wolvos v. Meyer, 668 N.E.2d 671 (Ind. 1996) (contract to make a contract requires essential terms)
- State v. Hamer, 199 N.E.2d 589 (Ind. 1936) (landowner may testify to value of land in certain proceedings)
- Bank of California, N.A. v. First American Title Ins. Co., 826 P.2d 1126 (Alaska 1992) (preliminary commitments can create reliance and potential tort liability)