[183 NJSuper Page 552] Plaintiff Bel-Air Motel Corporation ("Bel-Air") purchased real property in Maple Shade, New Jersey, on February 11, 1970. The property had been specially benefitted by the township's earlier installation of a sanitary sewer system, a local improvement under N.J.S.A. 40:56. The improvement was authorized by an ordinance adopted on December 23, 1963 which called for an assessment of the cost of the improvement against the various properties specially benefitted, in proportion to the advantage received by each. The improvement was completed in 1967 after which a board of assessment commissioners made the required assessment. Its report, which did not include plaintiff's property, was confirmed by the township on October 9, 1967. A property owner other than plaintiff brought suit challenging the validity of the assessments. The suit was successful; on May 10, 1968 all of the assessments were declared to be invalid and a reassessment ordered. A revised report of assessments, which included plaintiff's property, was prepared and confirmed by the township on April 8, 1974, "subject to comment and adjustment by Gerould Clark."*fn1 Finally, on May 5, 1976 the township confirmed a further revised assessment report, also including plaintiff's property, directed that a duplicate
thereof be delivered to the tax assessor and ordered appropriate bills covering the assessments to be forwarded to the affected property owners. Plaintiff's bill, which it has paid, amounted to $1,266.88.
When Bel-Air purchased its property in 1970 it also purchased a title insurance policy from defendant Title Insurance Corporation of Pennsylvania ("TICP"). The terms of the policy required the insurer to pay Bel-Air for damages and expenses incurred in the event specified difficulties arose with respect to its title. The policy did not mention the improvement assessment as an exception to coverage or otherwise, and plaintiff claims to be protected against the loss suffered through its payment. Plaintiff also seeks recovery for negligence in searching its title. Attorney's fees and expenses are claimed. Defendant denies coverage. The issues have been submitted on the basis of a stipulation of these facts and briefs.
The negligence upon which plaintiff relies consists of a failure to order assessment searches from Maple Shade, as permitted by statute, searches which would have revealed the existence of the assessment ordinance. The negligence theory finds support in our cases. See Bronfman v. Greene , 53 N.J. 306 (1969). However, this case and others cited by plaintiff involve circumstances in which the insured purchased or relied upon a title search as well as a title policy. Bel-Air purchased and relied upon a title insurance policy and nothing more. Consequently, arguments concerning defendant's liability as a title searcher have no relevance. Plaintiff's right to recover depends upon the terms of its contract, the title insurance policy. Those terms require interpretation.
The policy insures Bel-Air "against loss or damage . . . together with costs, attorneys' fees and expenses . . . which the Insured shall sustain by reason of:
any defect in or lien or encumbrance on the title to the estate or interest covered hereby in the land described or referred to in Schedule A, existing at the date hereof, not shown or referred to in Schedule B or excluded from coverage in Schedule B or in the Conditions and Stipulations; or unmarketability of such title. . . .
The "Conditions and Stipulations" set forth in the policy include the following:
2. Exclusions from the Coverage of this Policy
This policy does not insure against loss or damage by reason of the following:
(b) Governmental rights of police power or eminent domain unless notice of the exercise of such rights appears in the public records at the date hereof.
(d) Defects, liens, encumbrances, adverse claims against the title as insured or other matters . . . attaching or ...