New York’s Appellate Division recently affirmed a lower court’s dismissal of an insured’s claim against a title agent because, among other things, the insured’s claim of a breach of an oral contract was barred by the title insurance policy’s merger clause. See Union St. Tower, LLC v. First Am. Title Co., 2018 WL 2123717 (2d Dept. May 9, 2018). In the case, the insured purchased two properties in 2003 and received a title insurance policy issued by the title agent. In 2013, the insured brought this action against the agent, among others, alleging that the agent was negligent in failing to record documents, the agent was negligent in failing to obtain “proper title insurance,” and the agent had breached an oral contract. The agent moved to dismiss and the trial court granted the motion.
On appeal, the Appellate Division affirmed the dismissal of the claims. First, it affirmed the dismissal of the insured’s tort claims against the title agent because the statute of limitations had run and the claims were time-barred. Second, the Court held that the title insurance policy contained a merger clause stating that the policy “is the entire policy and contract between the insured and the Company.” This clause barred the insured’s claim regarding any additional oral agreement between the parties.