## Facts

- Michael C. Moore, acting for a purchasing partnership, agreed to buy real property from a financially distressed seller.
- The purchase agreement disclosed three liens and allowed Moore to terminate if additional liens were discovered; it also contained a financing contingency permitting cancellation if financing was not obtained before closing.
- The title company prepared a preliminary title report listing only the same three liens, and later issued an amended title report before closing that again listed only those three liens.
- Several additional recorded liens existed at the time of closing but were omitted from the title reports.
- Moore closed the transaction without having obtained financing and despite awareness of risks associated with the property and the seller’s financial condition.
- About a year later, Moore learned of additional recorded liens; he could not satisfy them or refinance and ultimately lost the property through foreclosure.
- Moore sued the title company for negligence, alleging the negligent title search and omissions prevented him from terminating under the contract and caused his loss.

## Issues

1. Whether a title insurance company may be liable in tort for negligently failing to discover and disclose recorded liens in a title search/report prepared for a transaction.
2. Whether the title company’s omission was the proximate cause of Moore’s loss, including whether Moore actually relied on the title report in deciding to close.
3. Whether the trial court’s findings on lack of reliance and causation were clearly erroneous.

## Decision

- The Court of Appeals affirmed judgment for the title company.
- The court accepted that a title company may be liable in negligence for an inaccurate title search/report, including omission of recorded liens.
- Nevertheless, the court held the trial court had substantial evidence to find Moore did not rely on the title report when closing and would have proceeded even if the additional liens had been disclosed.
- Because Moore’s own decisions and assumed risks were found to be the cause of his loss, the negligent omission was not a proximate cause of damages on these facts.

## Legal Principles

- A title insurance company/title agent performing a title search and reporting title status may owe a duty of reasonable care and may be subject to tort liability for negligent inaccuracies or omissions.
- Negligence liability requires proof of actual reliance on the inaccurate report and that such reliance was a substantial factor in causing the claimed loss.
- When the factfinder determines the plaintiff would have proceeded with the transaction regardless of the correct information, proximate cause is not established.
- Appellate review defers to the trial court’s credibility determinations and factual findings when supported by substantial evidence.

## Conclusion

Although a title company’s negligent failure to list recorded liens can support a negligence claim in principle, recovery requires proof that the buyer relied on the report and that the omission caused the loss; the judgment was affirmed because the trial court reasonably found no reliance and no proximate causation.


Moore v. Title Ins. Co. of Minn., 148 Ariz. 408 (Ct. App. 1985)