Nevada Supreme Court Affirms Dismissal of Insured’s Complaint Against Title Insurer When Insured Discovered Property Was Not Lakefront

The Nevada Supreme Court recently affirmed the dismissal of an action against a title insurance company brought by the insured property owner after he discovered that his property was not lakefront, as he had thought when he purchased the property.  See Schiller v. Fid. Nat’l Title Ins. Co., 444 P.3d 459 (Nev. 2019).  In the case, the plaintiff insured bought a property that the seller had represented as being on Lake Tahoe.  In 2008, in an action to which the insured was not a party, the Court determined that the County owned an 18-foot strip of land separating a number of properties, including the insured’s, from the lake based on a 1921 subdivision plat.  The insured then brought a claim with the title insurance company based on the property’s reduced value.  After the title insurance company denied the claim, the insured brought this action for breach of contract and bad faith.  The trial court dismissed the action.

On appeal, the Court affirmed.  The Court found that the property description in the policy referenced the 1921 plat, which “distinctly depicts a strip of land, designated 18 feet wide, separating lots 2 and 3 [the insured property] from the meander line (Lake Tahoe).”  Additionally, the Court rejected the insured’s argument that the property could have bordered the lake at the time he bought the property, noting that he had not obtained a survey.  Thus, the plat was the only recorded document relating to the boundary.  “Because neither the plat nor textual description identifies [the insured’s] interest as having a water boundary, [the insured’s] interest was not waterfront; any possible unrecorded facts to the contrary would be of no avail, for the policy’s description is unambiguous.”  Finally, the Court found that “a title insurance policy does not insure against losses due to a seller’s misrepresentations or a buyer’s failed expectations.  It was [the insured’s] duty to confirm that the advertised land was waterfront.”

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com, Michael Crowley at mcrowley@riker.com, or Dylan Goetsch at dgoetsch@riker.com.