In Shower Curtain Solutions Limited LLC v First American Title Inc. Co., an unpublished Michigan Court of Appeals opinion, the plaintiff purchased property separated by an alley that had been vacated from that owned by another defendant. The other defendant has fenced off the entire alleyway. After purchase, the plaintiff first obtained an easement for use of the alley, then filed suit seeking a judgment quieting title, and for negligence and breach of contract against both First American Title and its agent, Seaver Title Agency. Plaintiff was granted a judgment quieting title, which was not appealed. Claims against both First American and Seaver were dismissed. Plaintiff appealed, and Seaver cross-appealed the trial court’s denial of its request for sanctions for a frivolous lawsuit. The appeals court affirmed dismissal of plaintiff’s claims, but reversed and remanded the denial of the request for sanctions.
First, the court held that a title insurance company is not liable for a tort claim; a title insurance company’s liability is limited to the terms of the contract.
Second, the court held that Seaver as an action on behalf of a disclosed principal, First American, and could not be held liable.
Third, the court found that the property insured under the policy did not include the alley, and thus First American could not be held liable for breach of contract.
Finally, the court held that plaintiff’s claims against Seaver were frivolous, because the case law was clear that Seaver asn an agent was not liable, and plaintiff had made no argument for a reversal of existing law. The case was remanded back to the lower court for determination of sanctions.