The Reps’ land acquisition
Assume the above facts from problem 11 E, but this time Donna not only represents RP but is also an agent for Republic. In connection with the reps’ land acquisition, Donna provides a title search and issues the title insurance commitment and policy for Republic. Dan’s only comments to RP about title insurance were don’t worry, I can save you some money on the title work because I am an agent for Republic title and I can give you a 10% discount. After taking on the representation of RP, Donna signs a title search for a new associate at her firm.
this is only the second time that Donna’s associate has done a title search and prepared the title insurance commitment.
The associate does not find any easements affecting the property and makes the judgment that the seller has marketable title.
The associate prepares the commitment and eventually the post-closing title insurance policy showing a clean title. Donna signed the commitment and policy as an agent for Republic.
Three months after closing, RP comes to see Donna, telling her about a problem with the county water department having workers starting to clear vegetation from a strip of the E 50 acres of the property. The county water department claims it has a 40 foot wide utility easement running along the land that is clearing.
RP reminds Donna that she was told about an easement, but RP reiterates that he thought it was located along the West property line and that it would not impact his project. Donna rechecks the title records, and finds that the water department easement was properly recorded prior to the signing of the contract of sale between RP and his seller.
The newest associate just plain missed it. What should Donna do? Did Donna meet her ethical obligations in agreeing to represent RP and issuing insurance as an agent for Republic?
Blood work her ethical obligations and taking on the legal representation, and in supervising her associate? What are her ethical duties to each client at this point now that the error has surfaced?
