Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

MID AMERICA TITLE CO. v. KIRK

October 7, 1994

MID AMERICA TITLE COMPANY, Plaintiff,
v.
JAMES F. KIRK, Defendant.


PALLMEYER


The opinion of the court was delivered by: REBECCA R. PALLMEYER

Plaintiff Mid America Title Company ("Mid America") and Defendant James Kirk, an attorney associated with the Attorneys' Title Guaranty Fund, are both in the business of performing title searches and preparing title insurance commitments for real estate in Illinois. In the spring of 1985, Mid America prepared a title insurance commitment on behalf of a lender for a parcel of real estate in Will County, Illinois. Kirk later prepared a title commitment for his clients, the purchasers of the property. At the time Kirk prepared his commitment, his staff had a copy of the commitment that had been prepared by Mid America. Kirk's commitment contains material apparently copied from the Mid America commitment. Mid America registered its title insurance commitment for the Will County property with the U.S. Copyright Office on June 4, 1985. In this lawsuit, filed in April 1986, Mid America charges Kirk with violating Mid America's copyright in its title insurance commitment. Kirk contends that Mid America's title commitment is a compilation of facts which does not qualify for copyright protection as a matter of law. Now before the court are the parties' cross-motions for summary judgment. *fn1"

 STATEMENT OF FACTS

 Plaintiff Mid America Title Company ("Mid America") provides "real. estate settlement services," including title searches, title insurance, and escrow services to buyers, sellers, and mortgage lenders. (Statement of Material Facts as to Which There is no Genuine Issue in Support of Mid America's Motion for Summary Judgment (hereinafter, "Mid America's Rule 12(m) Statement") P 3.) Mid Amenca also acts as a title insurance agent and will create and issue a title insurance commitment for a parcel of property at the request of a seller, buyer, or lender. (Id. PP 2, 4.) Mid America determines whether it will issue a title insurance commitment on the basis of a land title search. (Id. P4.) Mid America's title commitments are writings which "comprise text and compilation of selected land title data." (Mid America's Rule 12(m) Statement P 6.)

 Defendant James F. Kirk ("Kirk"), an Illinois attorney, is a member of the Attorneys' Tide Guaranty Fund, Inc. ("ATGF"), an organization that underwrites title insurance. (Mid America's Rule 12(m) Statement P 7, 8.) As an ATGF member, Kirk is authorized to perform title searches and to prepare and issue commitments to issue title insurance on behalf of ATGF. (Kirk's Answers to Plaintiff's First Set of Requests for Admissions, Ex. B to Mid America's Statement of Material Facts as to Which There is a Genuine Issue in Opposition to Kirk's Cross-Motion for Summary Judgment (hereinafter "Mid America's Rule 12(n) Statement"), P 3.) In 1985, Kirk represented George and June Schaaf in a real estate transaction in which the Schaafs purchased a parcel of land in Frankfort, Illinois from Richard and Violet Wagner. (Mid America's Rule 12(m) Statement P 10.)

 On April 19, 1985, the Horizon Federal Savings Bank ("Horizon") placed an order with Mid America for title insurance policies for the Wagner property. (Id. P 11 ) *fn2" Mid America did, in fact, prepare its Title Commitment No. 125266 for the property. Thaddeus M. Bond, Sr., Mid America's president, asserts that the commitment "was developed through a manual search of land tide records in Will County." (Declaration of Thaddeus M. Bond, Sr., Ex. C to Mid America's Rule 12(m) Statement, P 7.) The fourth page of the Commitment bears the words, "Copyright 1985, Mid America Title Company." (Commitment for Title Insurance, Ex. E to Mid America's Rule 12(m) Statement.) According to Thaddeus Bond, the original and a copy of the commitment was mailed to Horizon, but Horizon cancelled the order. (Bond Declaration PP 8, 9.) *fn3"

 The Schaafs never requested a title commitment from Mid America. They did order such a commitment from Kirk. (Defendant's Statement of Material Facts as to Which There is no Genuine Issue in Support of Defendant's Cross Motion for Summary Judgment (hereinafter, "Kirk's Rule 12(m) Statement") P 2.) Kirk and his assistant, Cynthia Peri, explained that, when preparing a title commitment for property in Will County, they order a title search from the law firm of Davis, Varsek and Dystrup. (Deposition of Cynthia Peri, Ex. G to Mid America's Rule 12(m) Statement, at 6, 12-13; Deposition of James F. Kirk, Ex. D to Mid America's Rule 12(m) Statement, at 33.) Ms. Peri uses the data she receives from David, Varsek to prepare a title commitment which is then reviewed, approved, and signed by Kirk. (Dep. of James F. Kirk, Ex. D to Mid America's Rule 12(m) Statement, at 14-16.) By letter dated April 26, 1985 directed to the attention of "JoAnn," Ms. Peri requested a title search on the Frankfort property. (Letter from Peri to "JoAnn," 4/26/85, Ex. 12 to Memorandum of James F. Kirk in Opposition to Mid America's Motion for Summary Judgment and in Support of his Cross-Motion for Summary Judgment (hereinafter, "Kirk's Memorandum").)

 Ms. Peri had not received the results of the title search by early May. Knowing she needed the information in time for a May 7 closing date, Ms. Peri telephoned JoAnn and received an oral report of the results of that search. (Peri Dep., Ex. G to Mid America's Rule 12(m) Statement, at 23.) Mid America asserts that Ms. Peri only received data concerning the taxes, mortgage, and owner of the property; in fact, however, Ms. Peri testified that "the only thing she [JoAnn] didn't have on the first day I called her was judgment and lien searches on the buyer and seller, I think." (Peri Dep., Ex. 5 to Kirk's Memorandum, at 19 (emphasis supplied).) Although neither party explains the circumstances, it is undisputed that at some time prior to the closing, Mid America's title commitment came into Kirk's possession. Ms. Peri recalled that she was "sure it was there prior to the close." (Peri Dep., Ex. G to Mid America's Rule 12(m) Statement, at 17.) On or about May 7, 1985, Kirk issued a title commitment for the property bearing ATGF Commitment No. 774156. (ATGF Title Commitment, Ex. F to Mid America's Rule 12(m) Statement.) Ms. Peri distributed the ATGF title commitment some time prior to the May 7, 1985 closing date. (Mid America's Rule 12(m) Statement P 28.) Ms. Peri acknowledged that she "probably" had the Mid America commitment open on her desk at the time she prepared the ATGF Commitment. (Peri Dep., Ex. G to Mid America's Rule 12(m) Statement, at 27.)

 The ATGF commitment contains erroneous information -- a mortgage recording date one day later than the actual mortgage date -- that Mid America had "planted" in its own title commitment in an effort to detect copiers. (Mid America's Rule 12(m) Statement PP 31, 32; Bond Declaration P 10.) The written title search report that Kirk received from Davis, Varsek & Dystrup did not contain the error. (Mid America's Rule 12(m) Statement P 33, 34.) Like the Mid America commitment, the title insurance commitment produced by ATGF bears an "effective date" of March 27, 1985; the "effective date" that appears on the written title search report from Davis, Varsek and Dystrup is April 15, 1985. (Id. PP 35-37.) Ms. Peri testified that "evidently I picked it [the March 27 date] up off of Mid America," conduct she attributed to "the kind of chaos that was at the office at that time. . . ." (Peri Dep., Ex. G to Mid America's Rule 12(m) Statement, at 26.) Both the Mid America Commitment and the ATGF commitment contain, in identical language exceptions to the insurance coverage. *fn4" The written report from Davis, Varsek and Dystrup does not contain this information. (Mid America's Rule 12(m) Statement P 41.) Both the Mid America Commitment and the ATGF commitment contain identical information concerning taxes owed on the property and a mortgage lien against the property. (Id. PP 42-44. ) Mid America claims it lost $ 865.00, the price it billed Horizon for the title commitment. (Id. P 46.) Kirk admits he collected $ 904.50 for the ATGF title commitment. (Id. P 47.)

 The parties are in substantial agreement concerning the basic function of running title searches and performing title commitments. As James Kirk explains, a title insurance commitment is an offer to provide a policy of title insurance, which is ordinarily subject to all interests which affect title to a piece of property. (Affidavit of James F. Kirk, Ex. 2 to Kirk Memorandum, P 7.) These interests, which are matters of public record, consist of "any encumbrances, mortgages, liens, assessments, litigation or wills involving the property and judgments." (Id. P 8.) Title commitments should make reference to every encumbrance that appears in the public records, including property tax information, all liens and mortgages, and the names and marital status of the current owners. (Id. PP 9, 10, 11.) Indeed, Kirk observed that he had "never seen a properly prepared title commitment during [his] years of practice that did not contain a legal description of the property, the property index number, general taxes on the property and their status, mortgages on the property and any information of record with respect to such mortgages and the current owners of record on the property and whether they are married." (Id. P 12.)

 Andrew C. Dystrup, a principal in the law firm that Kirk called upon to perform a title search on the Schaaf property, provided a similar description of the process for performing a title search. (Affidavit of Andrew C. Dystrup, Ex. 3 to Kirk Memorandum, at PP 12-16.) Mr. Dystrup added that it is often a clerk in his office who gathers information for the title search (Id. P 17), pursuant to these instructions:

 
The clerk who completes the search is instructed to simply write down every less than fee "interest" which affects a piece of property as well as identify the record owner of the property. No judgment or discretion is involved in identifying and writing down this information.

 (Id. P 18.)

 Thaddeus M. Bond, President of Mid America, describes the work performed by a "trained title searcher" similarly as a search for facts including, but not limited to, "the identification of all grantors and grantees in the chain of title; the legal description; encumbrances such as mortgages, trust deeds, as well as releases and assignments of those encumbrances; judgments; federal and state tax liens against persons in the chain of title, as well as releases of those liens; divorces, probate matters and bankruptcies against persons in the chain of title; special assessments; drainage district assessments; and real estate tax information." (Declaration of Bond, Ex. L to Mid America's Reply Memorandum, P 3.) After the search is completed, Bond explained, the information is given to the title examiner who prepares a commitment for title insurance by selecting "those facts which in the exercise of the examiner's judgment need to be known by a lender or a purchaser of real estate." (Id. P 5.) Bond acknowledges, however, that it is only "those facts that do not affect the property or liens which have been properly released" that are excluded from the title commitment. (Id.) Bond thus does not challenge Kirk's assertion that all facts that do affect the property should be included. Bond's declaration continues with a description of the decisions made by the title searcher in preparing the Schaaf title commitment, decisions that Mid America contends reflected judgment and creativity.

 As Mid America has admitted, further, it is common industry practice for title insurance companies to use an earlier policy or commitment as a "starter" when preparing a commitment, and for a title company to "just come forward" -- that is, search for title information only from the effective date of the "starter policy" to the present. (Id. P 6.) Mid America does not deny that Kirk himself did not use the Mid America Commitment in preparing the ATGF commitment. (Id. P 7.) In addition, Mid America admits that the arrangement of facts" in the paragraph from the ATGF commitment concerning real estate tax information is "completely different" from the analogous paragraphs in the Mid America title commitment. (Id. P 12.) Similarly, Mid America admits that the arrangement of facts in the paragraph in the ATGF Commitment concerning the existing mortgage on the property is "completely different" from the arrangement of facts in the corresponding paragraph of the Mid America Commitment. (Id. P 14.) Mid America acknowledges, in addition, that there are differences between the two policies in the language identifying the owners of the property and in the language introducing the property description. (Id. P 13.) Mid America admits that the ATGF title commitment contains certain paragraphs that do not appear in any form in the Mid America Commitment; specifically, the ATGF commitment sets ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.