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Title insurers aren't responsible for negligence in Michigan

Apparently because there was concern they would flee the state, Michigan title insurers have gradually been granted immunity by state court judges, at least according to the Court of Appeals' recent ruling in Wormsbacher v. Phillip R. Seaver Title Co.  A buyer who relied on title searches before buying land in a Rochester subdivision attempted to sue the title company when it turned out that the company failed to advise him of restrictions prohibiting commercial use of the land.

The panel held that this case was indistinguishable from a federal case, Mickam v. Joseph Louis Palace Trust, which limited the insurance buyer's rights to the terms of the insurance contract.  The buyer argued that Michigan should adopt the same approach adopted by Montana and many other jurisdictions, an approach which recognizes that title insurers are routinely relied upon as semi-professionals to identify title flaws and restrictions.  The Court of Appeals rejected this approach and clung to an ancient distinction between title abstracting and title insurance which Michigan adopted historically, but which is an anachronism, today.

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