Bear Fritz Land Co. v. Kachemak Bay Title Agency, Inc.

The Coopers, owners of a subdivision parcel, learned from the Army Corps of Engineers that part of the land was wetlands requiring a permit to fill and build on; they obtained but never recorded that permit. In 1985 the Coopers sold the parcel to Bear Fritz Land Co. (plaintiff), which bought title insurance from Kachemak Bay Title Agency and Ticor Title Insurance (defendants) covering any "defect" or "encumbrance" in title, but the policy expressly excluded laws or regulations affecting the property's use. Bear Fritz didn't learn about the wetlands permit requirement until years later, by which point the Corps permit had expired; it then stopped paying the Coopers, who sued, and Bear Fritz brought a third-party claim against Ticor for failing to disclose the permit. The trial court found the expired permit and wetlands designation were not title defects and ruled for Ticor. Bear Fritz appealed.