The Voice • March 2017
A case that went before the Colorado Supreme Court recently forced a title company to pay a creditor’s outstanding judgement on a property whose previous owners were at fault.
The previous owners, a married couple, had the mortgage recorded under the name “T. Grady Merrit”. A few years later, T. Grady Merritt conveyed his interest of the house to the wife Patrice Merritt as part of a divorce. At some point during the marriage, a creditor judgement was filed against the husband under the name “Grady Merritt”. With full interest in the property, Patrice decided to sell the house. Once the transaction was completed the creditor tried to collect on judgement. When they turned to the new owner looking for payment their response was a lawsuit.
As the case progressed, it moved to the level of the Colorado Supreme Court. During the hearings it was found that when the title company did the title work for the current owner, the searcher only performed search inquiries for “T. Grady Merritt” and not “Grady Merritt”. Since the existing judgement was filed against the latter form of the name, the judgement was overlooked. The court ruled that the title company should have searched all reasonable name iterations but failed to do so. The title company’s insurance was required to pay the judgement.
In the land recording industry, comprehensive searching methods are essential. There are tools that can be utilized during the process, available from Fidlar, which will help individuals perform more comprehensive searches. In regards to this case, had a searching tool such as Iris been applied, the variations of the previous owner’s name would have a greater likelihood of being found.
[1] http://www.sourceoftitle.com/article.aspx?uniq=8604
