White v. Western Title Insurance Co.

White (plaintiff) bought property based on a preliminary title report from Western Title Insurance (defendant) that omitted a recorded easement letting a water company build a pipeline and drill wells on the property; when the water company later asserted its rights, White's property value dropped and he sought over $62,000 from Western Title, which countered with a $2,000 appraisal and two rejected settlement offers before litigation, continuing to litigate rather than promptly resolve the claim. A jury found Western Title liable for breach of contract, negligence, and breach of the implied covenant of good faith and fair dealing, awarding compensatory and bad-faith damages, and Western Title appealed several rulings.

Whether a title insurer's omission of a recorded easement from a preliminary title report constitutes negligence, and whether its failure to promptly resolve the resulting claim may constitute a breach of the implied covenant of good faith and fair dealing.