Texas Federal Court Denies Motion for Remand on Title Insurance Dispute

The United States District Court for the Northern District of Texas recently held that it had diversity jurisdiction over an action regarding the existence of a title insurance policy because the full policy amount would exceed the $75,000 threshold amount.  See Jury v. WFG Nat’l Title Ins. Co., 2018 WL 1912713 (N.D. Tex. Apr. 23, 2018).  In the case, the title insurance company brought an action seeking declaratory relief against plaintiffs regarding the existence of an alleged title insurance policy.  Plaintiffs separately brought a state court breach of contract action against the title insurance company regarding the same issues.  The title insurance company removed the state action to federal court, and the Court consolidated the two actions.  Plaintiffs then filed a motion to remand, arguing that the Court did not have jurisdiction over the actions, and the title insurance company opposed.  The parties did not dispute the diversity of their citizenship, but rather whether the amount in controversy exceeds $75,000. 

The Court first addressed the action brought by the title insurance company concerning whether the company was obligated to issue a policy to plaintiffs.  According to the title insurance company, plaintiffs were trying to “set [it] up” for a policy claim through a series of conveyances, and “if WFG were to acquiesce to the plaintiffs’ demand, WFG would instantly open itself to a claim for $355,000, the full value of the policy.” Thus, it brought the action for a declaratory judgment that it was not obligated to issue a policy.  The Court agreed with the company’s analysis, finding the amount in controversy to be the full amount of the alleged policy at issue, which was well in excess of $75,000.  The Court then analyzed the action brought by plaintiffs.  Although the Court acknowledged that plaintiffs stipulated in their motion that they would seek a maximum of $74,999 for their action, including attorneys’ fees, this was not dispositive.  The Court found that they also sought specific performance under the alleged title policy, and “the fulcrum of the plaintiffs’ claims—and of the entire case—is the issuance of an owner’s policy of title insurance with a policy limit of $355,000.00.”  As such, the Court denied the motion to remand.

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.