Mattson Ridge, LLC v. Clear Rock Title, LLP
2012 Minn. LEXIS 680
| Minn. | 2012Background
- Mattson Ridge purchased 64 acres and obtained Ticor title insurance; policy covered unmarketability of title with face value $1,286,000.
- Ambiguity in the property’s legal description (Charles Magnuson’s place) rendered title unmarketable, hindering Thompson’s ability to close and causing loss of sale.
- Mattson Ridge sought TICOR’s defense/indemnity; TICOR refused to cure the defect or cover damages.
- District court found TICOR liable and awarded $1,297,169 plus $11,169 in costs, but capped damages at the policy face value.
- Court of Appeals affirmed liability but awarded damages in excess of the policy limit; Supreme Court granted review to determine liability scope and damages measure.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Ticor breached by failing to defend/indemnify | Mattson Ridge argues TICOR must defend and indemnify due to unmarketable title | Ticor contends no breach if cure/coverage limits apply | Yes, TICOR breached by failing to defend/indemnify for unmarketable title |
| Proper measure of damages and policy cap | Consequence damages may exceed policy limit under Olson if delays/undisputed benefits, or lost profits | Damages capped at policy limit; lost profits require certain proof | Damages capped at policy limit ($1,286,000) plus $11,169; lost profits recoverable if proven with reasonable certainty and within cap |
| Whether lost profits are recoverable beyond policy limit | Lost profits flow from breach and can exceed policy limit under Olson | Only actual monetary loss within policy cap is recoverable; Olson not controlling here | Lost profits limited by policy cap; recovery affirmed only up to $1,286,000 plus expenses |
Key Cases Cited
- City of North Mankato v. Carlstrom, 212 Minn. 82, 2 N.W.2d 130 (Minn. 1942) (marketable title standard and reasonable doubt framework)
- Howe v. Coates, 97 Minn. 385, 107 N.W. 397 (Minn. 1906) (marketable title and reliance on experts; reasonable doubt)
- Target Stores, Inc. v. Twin Plaza Co., 277 Minn. 481, 153 N.W.2d 832 (Minn. 1967) (serious doubt about unrecorded interests affecting marketability)
- Olson v. Rugloski, 277 N.W.2d 385 (Minn. 1979) (lost profits when insurer delays/denies undisputed benefits; approach to consequential damages)
- Falmouth National Bank v. Ticor Title Ins. Co., 920 F.2d 1058 (1st Cir. 1990) (insurer’s duty to indemnify and limits of liability under title policy)