The Indiana Court of Appeals recently granted a title insurer summary judgment on the insureds’ breach of contract and bad faith claims because the insureds had failed to give prompt notice of their title claim. See Pike v. Conestoga Title Ins. Co., 2015 WL 5680154 (Ind. Ct. App. 2015). In the case, the insureds purchased a property and obtained title insurance in December 2003. In June 2006 and November 2006, the insureds received notices about a tax sale of their property due to the nonpayment of real estate taxes. After receiving each notice, the insureds contacted the mortgage servicer, who informed them each time that all of their taxes had been paid and to ignore the notice. In February 2007, the insureds received notice that their home had been sold. At this point, the insureds hired an attorney who discovered that a May 2003 special assessment on the property had never been paid, which eventually resulted in the sale of the property. They filed a claim with the title insurer, alleging that the assessment was recorded in May 2003 and was not identified in their title search. The title insurer denied the claim, explaining that the insureds had a duty under the policy to notify the insurer as soon as they receive notice of an adverse title claim. After the insureds sued the title insurer for breach of contract and bad faith, the title insurer moved for summary judgment. The Court granted the motion, holding that the insureds failed to provide the title insurer with prompt notice of the claim as required by the policy, which is a condition precedent to the insurer’s liability to the insureds. The Court further held that, even if the insureds were not aware of the specific tax assessment until after the property had been sold in 2007, they were aware that there was some adverse title claim in June 2006, and this gave them sufficient knowledge for them to notify the title insurer. For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com.