## Facts

- Glen Edwin Jimerson sold his home to a buyer by general warranty deed.
- Before closing, First American Title Insurance Company issued a title insurance commitment and later a title policy naming the buyer and lender as the insureds; Jimerson was not an insured.
- The commitment stated the title company’s obligation was limited to issuing a policy to the identified insureds.
- About a year after the sale, Jimerson’s brothers sued the buyer claiming an interest in the property.
- The buyer, defended by counsel provided under the title policy, filed a third-party claim against Jimerson alleging breach of deed warranties, including quiet enjoyment.
- Jimerson filed third-party claims against First American for negligence and negligent misrepresentation, alleging the title commitment and search should have disclosed his brothers’ asserted interest.
- The trial court granted First American summary judgment, concluding it owed no duty to Jimerson, and entered final judgment under C.R.C.P. 54(b).

## Issues

1. Whether a title insurer owes a contractual or tort duty to a seller arising from a title commitment and buyer’s title policy when the seller is not a named insured.
2. Whether the seller can recover for negligent misrepresentation based on alleged omissions in the commitment/title search when the commitment was issued for the buyer and lender.

## Decision

- The Colorado Court of Appeals affirmed summary judgment for First American.
- The court held the commitment and policy, by their terms, created obligations running only to the buyer and lender, not to the seller.
- Because First American did not undertake to provide information for the seller’s guidance or protection, it owed no duty to the seller in negligence or negligent misrepresentation.

## Legal Principles

- The existence of a legal duty is a threshold question of law; without a duty, negligence and negligent misrepresentation claims fail.
- A title insurance commitment is a conditional promise to issue a policy upon satisfaction of stated requirements; its scope is defined by its express terms and identified insureds.
- When a commitment and policy insure only the buyer (and lender), they generally do not create contractual duties or an independent tort duty to the seller, even if the seller paid for the commitment or policy.
- Negligent misrepresentation requires that the defendant, in the course of business, supplies false information for the guidance of others in a business transaction and intends or knows the recipient will rely; information supplied solely to support issuance of a buyer’s policy is not supplied for the seller’s guidance.
- A seller’s obligation to convey good title arises from the real estate purchase and sale agreement and the deed warranties, not from reliance on a buyer’s title commitment or title insurance policy.

## Conclusion

The court affirmed judgment for the title insurer because the commitment and policy were issued for the benefit of the buyer and lender, leaving the seller outside any contractual relationship or intended informational audience; absent a duty to the seller, the seller’s negligence and negligent misrepresentation claims could not proceed.


Jimerson v. First Am. Title Ins. Co., 989 P.2d 258 (Colo. App. 1999)