In these cross-appeals, we explore, inter alia, the parameters of a title insurance company’s duty to disclose title defects to its insured, a lender-mortgagee. The district court, finding that no such duty existed, granted a post-judgment motion for judgment as a matter of law in favor of defendant American Title Insurance Co. (“American”), thus nullifying a jury verdict awarding $286,-000 in negligence damages to plaintiff Focus Investment Associates, Inc. (“Focus”). 1 Focus appeals that ruling, as well as others related to it. American, meanwhile, argues that the jury’s $49,000 damage award on Focus’s contract claim may have resulted from erroneous instructions and should therefore be vacated. For the reasons that follow, we affirm the judgments against Focus and vacate the judgment against Ameri-can. 2
*1233 I
Background Facts
Unless otherwise indicated, the following facts are undisputed. Focus, a family-owned and operated Ohio corporation, invests money from a family trust and makes loans secured by interests in real estate. On December 6, 1988, Laurence J. Shapiro, a now-deceased Boston-based real estate developer and mortgage broker, contacted Focus President Edward Sarbey 3 to solicit placement of a $250,000 short-term loan to George Marde-rosian, a Rhode Island attorney. Shapiro explained that Marderosian was lead attorney in a real estate enterprise, which urgently needed to fund operational cash shortfalls. Shapiro indicated to Focus that Guardian Mortgage Corp., a loan company Shapiro operated, would make and close the loan, and then assign all loan documents to Focus, in return for Focus’s funding and purchase of the loan.
Shapiro represented to Focus that the loan would be fully secured by second mortgages on twelve condominium units valued at $1.14 million, subject only to Attleboro Pawtucket Savings Bank’s (“Attleboro”) first mortgage with an approximate balance of $720,000. As additional security, Focus was to be given a second mortgage on Marderosian’s home, which, according to Shapiro, had an equity value of $100,000 to $150,000 over and above The Boston Five Corp.’s first mortgage. Finally, Shapiro and Marderosian agreed to personally guarantee the loan, and to assign to Focus the proceeds of a consulting agreement between Shapiro and Dean Street Development, a Marderosian client. Based on these representations, Focus agreed to purchase and fund the loan.
Shapiro hired defendant James Tobak, an associate of defendant law firm Abrams and Verri, to represent the lender’s interests 4 and close the loan deal. On December 6, 1988, Tobak transmitted to Sarbey facsimiles of the promissory notes, mortgages, and guarantees executed in connection with the loan. The following day, Tobak informed Sarbey that Focus’s mortgages had been recorded and that title insurance had been obtained. He then requested Sarbey to wire the loan proceeds to Abrams and Verri’s escrow account, which Sarbey did the same day. The loan closing took place December 8, 1988. The terms of the loan called for an annual interest rate of 20 percent, with monthly interest payments of $4,166.67 to begin on January 6, 1989. Final repayment was due on April 6, 1989.
Among the loan documents, Focus received two title insurance policies issued by American’s policy-issuing attorney, defendant Owen Landman. The first policy insured Focus’s second mortgage on 12 condominium units. The policy showed title to the units to be vested in the name of George A. Mardero-sian, Trustee of the River’s Edge Realty Trust. Excepted from coverage under the first policy was a first mortgage with a principal balance of $720,000. The second policy insured Focus’s second mortgage on Marde-rosian’s home, excepting a first mortgage in the principal amount of $150,000.
Near the end of December 1988, Shapiro died. In January, February and March 1989, Marderosian made payments to Focus totalling $23,200. However, as of the April 6, 1988, due date, the balance of the principal and the interest due under the terms of the promissory note remained unpaid. In the course of considering its response to Marde-rosian’s non-payment, Focus discovered that *1234 its mortgages did not occupy a second position on either of the collateral properties. With respect to the condominium units, Focus’s mortgage was in fifth position. Focus’s mortgage on Marderosian’s home was in fourth position, behind mortgages held by C & K Investments ($100,000) and Bank of New England-Old Colony ($50,000), as well as the first mortgage held by Boston Five Corp. In addition, at the time Focus’s mortgage was recorded, title to the condominium units was vested in Capital Center Development, not Marderosian. Neither of the title insurance policies reflected the existence of the senior mortgages nor did the condominium policy reflect the actual ownership.
The title insurance policies in question were issued by defendant Landman, whom American had appointed as a policy-issuing attorney in April 1980. Landman, who shared office space with Marderosian, was listed as “Of Counsel” on the Marderosian law firm letterhead. Landman testified that he issued the title policies at Marderosian’s request. He conducted no independent title search, but instead relied on Marderosian’s representations as to the ownership and mortgage status of the collateral properties.
In July 1989, Attleboro foreclosed its mortgage on the condominium units. The foreclosure sale price was $220,000 less than the balance of Attleboro’s mortgage, leaving nothing for a second mortgagee. Shortly thereafter, Marderosian’s home was bid in at foreclosure by second mortgagee C & K Investments, which assumed liability for the principal balance of $150,000 remaining on Boston Five Corp.’s first mortgage and paid an additional $49,000, for a total purchase price of $199,000. Thus, $49,000 in proceeds remained after satisfaction of the Boston Five Corp. mortgage.
On November 11,1989, Focus filed a diversity action against American, Landman, To-bak, Abrams & Verri, Shapiro’s estate, and Marderosian. The nine-count complaint sought damages from American for breach of the title insurance contract, negligence in searching title, negligent hiring, retention and supervision of Landman, negligent misrepresentation of Focus’s mortgage position, and bad faith refusal to settle. Focus accused Landman of negligence in searching title and negligent misrepresentation. Tobak and Abrams & Verri were charged with negligent misrepresentation, legal malpractice, breach of contract and breach of fiduciary duty. Finally, Focus sought to enforce the personal guaranties tendered by Shapiro and Marderosian. Prior to trial, Marderosian filed a motion to dismiss, to which Focus did not object, apparently because it thought Marderosian to be judgment-free. The district court granted the motion, with prejudice.
At trial, Focus argued that the terms of the title insurance contract obligated Ameri-can to pay Focus the $49,000 that would have been available to Focus had it actually been the second mortgage holder on Mardero-sian’s home. In addition, Focus sought to recover the loan proceeds, plus costs and interest from defendants American, Land-man, Tobak, et al, theorizing that but for their tortious conduct, Focus never would have made the loan to Marderosian.
At the close of Focus’s case-in-chief, Amer-ican, Landman, Tobak, and Abrams & Verri moved for judgment as a matter of law. The court reserved decision on the motions. The defendants renewed their motions at the close of all the evidence. Focus also moved for judgment as a matter of law on Ameri-can’s affirmative defense of usury. The court denied Focus’s motion and reserved decision on the motions of American and Landman. The court granted the motions of Tobak and Abrams & Verri, ruling that Focus’s failure to present expert testimony with respect to an attorney’s standard of care under the relevant circumstances was fatal to the claim of legal malpractice.
The jury found American liable on both contract and negligence grounds, awarding damages of $49,000 and $286,000, respectively. The jury also found Landman negligent, but awarded no damages. Following trial, American moved for judgment as a matter of law on both the contract and negligence counts. The district court, ruling that Amer-ican owed Focus no duty with respect to the title search, granted the motion on the negligence count, while denying the motion on the contract claim. On June 18, 1992, judgment was entered in accordance with these rulings.
*1235 Both Focus and American appealed. Focus claims that judgment as a matter of law was improper because American was under a duty to Focus to perform a reasonable title search. Focus also argues that the district court incorrectly ruled that expert testimony was necessary on an attorney’s standard of care, and that even if such testimony was required, it was supplied via the testimony of attorneys Tobak and Marderosian. Ameri-can appeals on the ground that the district court incorrectly charged the jury that it “may” return a verdict for American if it found the loan to Marderosian usurious, when in actuality a finding of usury would mean that a jury “must” rule in favor of American. 5
II.
Focus’s Appeal
A. Judgment as a Matter of Law
The bulk of Focus’s appeal is aimed at the district court’s grant of judgment as a matter of law against Focus on its various claims of negligence. In reviewing a grant of judgment as a matter of law, the evidence and all reasonable inferences therefrom must be examined in the light most favorable to the nonmovant.
Lowe v. Scott,
B. The Negligence Claims 6
1. The Title Search
Focus essentially argues, as it did at trial, that American — via its agent, Land-man — failed to conduct a reasonable title search prior to issuing the title insurance policy to Focus. Had American done so, and thereafter disclosed to Focus the correct number of superior mortgages on the proffered collateral, Focus claims it never would have made the loan to Marderosian. At the heart of this argument is the question of whether a title insurance company can be held liable for failure to search title and disclose title defects to its insured. This is apparently an issue of first impression in Rhode Island, and thus we will seek guidance from,
inter alia,
analogous decisions of other jurisdictions.
See Sainz Gonzalez v. Banco de Santander-Puerto Rico,
It is true, as Focus asserts, that some courts have concluded that a title insurance company may be liable in tort if it negligently fails to discover and disclose a title defect to its insured.
See, e.g., Red Lobster Inns of America v. Lawyers Title Ins. Corp.,
two distinct responsibilities are assumed [by the insurer]; in rendering the first service, the insurer serves as an abstractor of title and must list all matters of public record regarding the subject property in its preliminary report. When a title insurer breaches its duty to abstract title accurately it may be held liable in tort for all damages proximately caused by such breach.
Ford,
In the absence of an express contract or preliminary title report, however, courts have uniformly declined to hold a title insurance company liable for a negligent title search.
See, e.g., Brown’s Tie & Lumber Co. v. Chicago Title Co.,
Here, American neither contracted to provide Focus with a title report, nor provided Focus with a preliminary title report. Thus, we agree with the district court that in trying to recover its loan loss under negligence principles, Focus seeks to expand its relationship with American beyond the bounds of the title insurance policy and thereby impose upon American a duty neither undertaken nor imposed by law.
7
See Horn v. Lawyers Title Ins. Co.,
2. Negligent Misrepresentation
As we have said, each of the title insurance policies here at issue excepted from coverage only one prior mortgage, thereby insuring Focus’s position as second mortgagee on both the condominium units and Marderosian residence. Focus argues that the policies therefore amounted to a false representation that its mortgages were in second position, which representation was due to American’s negligence. Consequently, Focus argues, because it relied on these representations in deciding to make the loan to Marderosian, American is liable for Marderosian’s default. Although we agree with the district court that American, as a matter of law, was not liable to Focus for negligent misrepresentation, our reasoning differs somewhat from that of the district court.
See Banco Popular de Puerto Rico v. Greenblatt,
We have stated that “[tjitle insurance is a contract of indemnity, not guarantee.”
Falmouth Nat Bank v. Ticor Title Ins. Co.,
3. Negligent Hiring, Retention and Supervision
In addition to claims of negligence in searching title and negligent misrepresenta *1238 tion, Focus asserted at trial claims directly against American for negligent hiring, retention and supervision of its policy-issuing attorneys, Landman and Marderosian. The district court found none of these theories to be legally supportable. We agree.
Rhode Island law does recognize the direct liability of an employer to third parties for damages caused by employees or agents who were negligently hired, trained or supervised.
Welsh Mfg.,
Focus next argues that American’s failure to give Landman personal instructions or training with respect to title insurance or title searching, failure to conduct seminars or courses, and failure to audit Landman’s work constituted negligence and resulted in Focus’s loss on the Marderosian loan. As we have stated already, however, American was under no duty to provide Focus with a title report, and any title search undertaken by Landman or American was for American’s benefit, not Focus’s. Thus, any failure on American’s part to train Landman is not actionable by Focus.
Finally, to support its claim of negligent supervision, Focus argues that if American had a system whereby it could have ascertained which property interests it already insured, it would have discovered the senior liens not disclosed on the policies issued to Focus, since earlier policies on the same properties showed additional different encumbrances. Focus’s argument fails, however, because, as American correctly points out, title policies issued at different times may show different encumbrances on the same property simply because the encumbrances may have changed over time due to refinancing or discharge. Therefore, Focus has failed to indicate how such a cross-checking system would have yielded any relevant information.
In the end, with respect to all of Focus’s negligence claims, Focus received what it bargained for — a title insurance policy which promised to indemnify Focus for any losses suffered as a result of Focus not having a second mortgage on the relevant collateral properties. As the only equity available to a second mortgagee was $49,000 from the foreclosure of the Marderosian residence, that was the “actual loss” within the meaning of the policy, see supra note 7, and thus the only loss American was required to indemnify. Focus was not legally entitled to anything else from American.
C. Legal Malpractice
The district court granted judgment as a matter of law in favor of Tobak and Abrams & Yerri, holding that Focus needed to present expert testimony to the jury with respect to the duty of care owed by an attorney in Tobak’s position. Focus first argues that no such expert testimony was required because the standard of care of an attorney “in representing a lender” is within a layman’s common knowledge. In the alternative, Focus argues that the jury was presented with such evidence via the testimony or cross-examination of Tobak, Landman and Marderosian. After careful analysis, we are unpersuaded by Focus’s contentions.
As an initial matter, we note that in arguing that no expert testimony was required relative to the duty owed by a lender’s attorney, Focus has, in our view, misapprehended a critical concern of the district court. In granting Tobak’s motion, the court emphasized the confusion surrounding Tobak’s actual role in the loan process, and found that Focus’s failure to present evidence which would have clearly established Tobak’s role was a serious matter, as was its failure to present evidence indicating exactly what is *1239 the standard of care for an attorney performing that role. 11
1. The Need for Expert Testimony
It is well settled under Rhode Island law that a legal malpractice plaintiff must prove the “want of ordinary care and skill” by the defendant.
Holmes v. Peck,
On the other hand, in cases where legal expertise is an issue, “a jury cannot rationally apply negligence principles to professional conduct absent evidence of what the competent lawyer- would have done under similar circumstances ...”
Lenius v. King,
Here, Tobak testified that he was hired by Shapiro and Guardian, together referred to as “the lender,” to review loan documents, and in order to do so, he relied on information provided to him by his client. He testified that nothing he reviewed indicated to him that the loan was not proceeding as planned. Sarbey also testified that it was his understanding that Tobak was representing “the lender,” but because, in his opinion, Focus was the lender, Sarbey thought that Tobak was representing Focus. Essentially, Focus argues that Tobak was employed by Focus and committed malpractice by relying on the documentation he was presented and simply reviewing it without making an independent investigation. In our view, regardless of who Tobak represented, Focus’s claim clearly implicates the issue of Tobak’s application of his legal expertise to the situation.
Accord, Fall River Sav. Bank v. Callahan,
2. Trial Testimony as Expert Testimony
On appeal, Focus asserts that it “adduced the requisite standards of care of a closing attorney, a title attorney, a settlement agent and a fiduciary through the testimony of James Tobak, Owen Landman and George Marderosian.” This argument misses the point, and serves to highlight the controversy surrounding Tobak, for Focus has again, as it did before the district court, failed to indicate which role Tobak occupied. Thus, even assuming that the testimony of the three defendants did adduce the claimed standards, the jury could only speculate as to which standard applied to Tobak.
See Lenius,
III.
American’s Appeal
A. Usury
Under Rhode Island law, loans which call for annual interest payments in excess of 21 percent are considered usurious, and are therefore void and uncollectible. RJ.Gen.Laws §§ 6-26-2, 6-26-4 (1956) (1992 Reenactment);
DeFusco v. Giorgio,
According to American’s theory, as a result of the usurious — -and therefore void — mortgage, Focus failed to acquire an insurable property interest and therefore suffered no damage as a result of any title defects. The district court denied Focus’s motion for judgment as a matter of law with respect to usury, and allowed the issue to go to the jury, giving the following instruction in the context of the contract claim:
Defendant contends that payments under a consulting agreement executed at the same time as the loan agreement were in reality interest payments on the loan. If you find by a preponderance of the evidence that the consulting agreement was really a pretext for the payment of an illegal rate of interest, then you may find that the loan was unlawful and return a verdict for Defendant on the contract claim.
(Emphasis added). American timely objected, arguing that the use of the word “may” impermissibly gave the jury discretion to find *1241 for Focus even if it found the loan to be usurious. The court did not change the instruction, and the jury awarded Focus $49,-000 under the title insurance policy covering the mortgage on Marderosian’s home. On appeal, American claims that the “may” instruction was clear and harmful error entitling it to a new trial. After careful review, we agree.
Interestingly, Focus does not directly dispute the central thesis of American’s appeal — the failure of the jury instruction to conform to the law of usury as it relates to insurable interests. Instead, Focus argues that (1) American, or anyone else other than the borrower, lacks standing to raise the usury defense; (2) American failed to establish a prima facie case of usury; and, (3) it is “obvious” that the jury found that the loan was not usurious, therefore rendering any error harmless. Finding all of Focus’s arguments unpersuasive, we address each in turn.
1. Standing
It is ordinarily true, as Focus asserts, that the defense of usury is personal to the borrower or one in privity with the borrower, and unavailable to strangers to the usurious transaction.
See generally,
45 Am. Jur.2d
Interest and Usury
§ 288 (1969) (and cases cited therein). This custom allows a debtor who does not wish to invoke the protections of usury laws to pay off the debt to which he agreed.
See DeFusco,
“In order for recovery [on an insurance policy] to be had, it is essential that the claimant show both an existing contract of insurance and an insurable interest in the property. No insurable interest existing, the contract is considered absolutely void ...” 4 John A. Appleman and Jean Appleman,
Insurance Law and Practice,
§ 2121 (1969) (footnotes omitted);
Cronin v. Vermont Life Ins. Co.,
*1242
First,
Phalen
restated the general rule that one has an insurable interest in property “by the existence of which he will gain advantage, or by the destruction of which he will suffer a loss.”
Id.
at 139 (quoting
Harrison v. Fortlage,
The second rationale employed by
Phalen
follows from the premise that where a state views a particular legal scheme as reflecting the highest concern for public welfare, strict adherence to that scheme applies, even in collateral matters. Thus, given that the Minnesota Legislature declared usurious transactions to be void, an obvious expression of high public welfare concern,
Phalen
held that no insurable interest could arise from a usurious mortgage.
Id.
The
Phalen
court relied in part on
Mackie & Williams Food Stores, Inc. v. Anchor Casualty Co.,
Here, under either approach, a finding of usury in the Marderosian-Focus transaction would lead to the inexorable conclusion that the mortgages received by Focus as collateral were not insurable interests. As to the first theory, as we have already noted, usurious transactions are void under Rhode Island law. Thus, if the loan is indeed usurious, Marderosian could legally avoid repayment, and recoup any sums already paid.
Cf. Keenan v. Coppa,
As to
Phalen’s
second path, the Rhode Island Supreme Court has unequivocally acknowledged that state’s strong public policy against usurious transactions.
See DeFusco,
It is true, as Focus points out, that the
Phalen
majority concluded its opinion by stating: “[W]e stress that our holding has resulted from and is limited to the unique facts and circumstances presented in this case. We do not intend by this decision to depart from the general rule in this state that the defense of usury is personal to the borrower.”
Id.
2. Prima Facie Case
To support its claim of usury, Amer-ican argues that Shapiro’s assignment of rights under a consulting agreement with Dean Street Development constituted hidden, additional interest, apart from the 20 percent rate charged in the Marderosian loan documents. Under American’s theory, the actual interest rate was 88 percent. Focus responds by relying on the apparent separateness between Marderosian and the parties to the consulting fee. Implicitly, the district court rejected Focus’s prima facie argument, as it denied its motion for directed verdict on the usury issue. We reject it as well. In short, Focus’s argument ignores authority holding that 45 Am.Jur.2d Interest and Usury § 112 (1969) (and cases cited therein) (footnotes omitted).
“[u]sury is not determined merely from what the parties represent the transaction to be, but the court will look to the whole transaction, the surrounding circumstances, the occurrences at the time of making the agreement, and the instruments drawn. Whether a transaction legal on its face is, in fact, merely a device to cover usury generally is a question of fact for the jury.”
Here, there is evidence that the loan proceeds were intended for Dean Street Development, a Marderosian client in need of “discreet” funding and there is no question that the assignment from Shapiro to Focus was finalized at the same time as the loan from Focus to Marderosian. Finally, the sum payable under the assignment were due to be repaid April 6, 1989, the same day as the loan. Focus argues that the loan and assignment were entirely separate transactions, characterizing the assignment as nothing more than Shapiro sharing his broker’s commission with Focus, a non-usurious transaction. ' While the jury, of course, is entirely free to accept either version of the facts, it is quite clear that American has at least made out a prima facie case of usury.
3. The Instruction
As the above discussion makes clear, if, in fact, the jury were to find the loan to Marde-rosian usurious, then, as a matter of law, Focus would have no insurable interest in the collateral mortgages. Therefore, the instruction, which used the permissive “may,” allowed for both a finding of usury and a verdict for Focus on its contract claim. This was error. 13 Accordingly, American is entitled to a new trial on Focus’s contract claim, accompanied by the appropriate instruction on usury.
IV.
Conclusion
For the reasons stated herein, the judgment below is vacated insofar as it awarded damages to Focus on its contract claim, and affirmed in all other respects.
Notes
.
See generally Focus Inv. Assocs. v. American Title Ins. Co.,
. Prior to trial, Fed.R.Civ.P. Rule 50 had already been amended to abolish the different designations between a pre-judgment "motion for direct
*1233
ed verdict” and a post-judgment "motion for judgment n.o.v.” Both motions are now known as "motions for judgment as a matter of law.” As the applicable standards under the two denominations do not differ, we will, for purposes of consistency, refer to the motions at issue as though they were submitted and ruled upon under the amended Rule.
See Davet v. Maccarone,
. Shapiro and Sarbey became acquainted when the two were neighbors in Boston, prior to Sar-bey's relocation to Ohio. According to Sarbey, Shapiro originally recommended loans secured by real estate as a safe and profitable investment idea. Prior to the loan here at issue, Shapiro had arranged several other loans for Focus.
. Focus claims that Tobak was hired to protect its interests, while Tobak claims he was hired to protect Shapiro's and Guardian's interests. We address this dispute' — which turns on the identity of the actual "lender” — more fully infra at 1239.
. Focus also argued that American should be held vicariously liable for the negligence of its alleged agent, Landman. The district court ruled that Landman was not American’s agent, and Focus appeals that decision as well. The only asserted basis for Landman’s negligence was his failure to independently search title prior to issuing the policies in question. Because, as will be explained more fully, infra, we find that a title insurer owes no duty to an insured with respect to a title search, we need not resolve the agency issue.
. We note that the jury was not given separate instructions relative to each of Focus’s negligence claims against American — e.g., searching title, misrepresentation, supervision, etc. — but instead was given a verdict form which asked only, "Do you find American Title liable for negligence in issuing the title insurance policies?” Therefore, because the record does not indicate which theory the jury relied upon to make it: . 286,000 negligence award, we, like the district court, must examine each theory individually.
See Welsh Mfg., Div. Of Textron v. Pinkerton's,
. The cover sheet of the policies here at issue states that:
SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS CONTAINED IN SCHEDULE B AND THE PROVISIONS OF THE CONDITIONS AND STIPULATIONS HEREOF, AMERICAN TITLE INSURANCE COMPANY ... insures ... against loss or damage, not exceeding the amount of insurance stated in Schedule A ... sustained or incurred by the insured by reason of:
1. Title to the estate or interest described in Schedule A being vested otherwise than as stated therein;
2. Any defect in or lien or encumbrance on such title;
6. The priority of any lien or encumbrance over the lien of the insured mortgage;
Among the relevant Conditions and Stipulations arc the following:
6. DETERMINATION AND PAYMENT OF LOSS
(a) The liability of [American] under this policy shall in no case exceed the least of:
(i) the actual loss of the insured claimant; or
(ii) the amount of insurance stated in Schedule A....
11. LIABILITY LIMITED TO THIS POLICY
This instrument together with all endorsements and other instruments, if any, attached hereto by [American] is the entire policy and contract between the insured and [American].
Any claim of loss or damage, whether or not based on negligence, and which arises out of the status of the lien of the insured mortgage or of the title to the estate or interest covered hereby or any action asserting such claim, shall be restricted to the provisions and conditions and stipulations of this policy.
. To the extent that a title insurer searches title prior to issuing a policy, it does so only for its own benefit, to ascertain its risk of liability under the policy as it will except from coverage any title defect it does discover and be liable for damages caused by undiscovered — and unexpected — defects.
See Greenberg,
. To the extent, therefore, that Focus claims that the existence of a duty was a question for the jury, such an argument is legally incorrect. Banks, 522 A.2d at 1225.
. Not only are the district court's decisions regarding the title insurance policies in accord with those of other jurisdictions, they are supported by logic as well. In our view, Focus's position is tantamount to a buyer of life insurance claiming that his policy is a guarantee against death. Focus’s claim that it relied on the insurance policies as evidence that no undisclosed superior liens existed simply flies in the face of the fact that the policies were issued to protect Focus against losses it may suffer from undisclosed superior liens. Moreover, an insured’s losses are limited to situations where the security of the insured lien is actually impaired by .the undisclosed superior lien. "The mere fact of an undisclosed prior lien is insufficient to establish this claim; a showing that the prior lien renders the insured lien ’insecure’ must be made as well.”
Blackhawk,
. Specifically, the district court stated:
My understanding is that the argument is that Mr. Tobac (sic) allegedly gave an opinion upon which the Plaintiff relied that each of the mortgages in question were second mortgages. There is an underlying factual issue here of whether or not in the first place the defendant, Tobac (sic), and his law firm were engaged for the purpose of providing an opinion with respect to the effect of the two mortgages. I'm satisfied ... that this is a circumstance in which it's necessary to have available to the jury expert opinion with respect to the duty of an attorney in Mr. Tobac’s (sic) situation. Particularly in light of the fact that his situation is unclear to begin with as to just exactly what he was hired to do. What his engagement was.
. Focus argues for the first time on appeal that the district court erred because if the jury had found for American on its usury claim, then Tobak would have been liable to Focus for failing to apprise Focus of the illegality. We do not reach this issue, but instead reiterate our familiar position that arguments not raised before the district court "cannot be surfaced for the first time on appeal.”
Goldman v. First National Bank of Boston,
. We find nothing in the record to support Focus's bald assertion that the error was harmless because "it is obvious that the jury found that the loan was not usurious.”