On appeal from the Superior Court of New Jersey, Law Division, Atlantic County.
Shebell, Gaynor and Arnold M. Stein. The opinion of the court was delivered by Shebell, J.A.D.
Defendant Chelsea Title & Guaranty Company (Chelsea) appeals from a judgment awarding plaintiff damages under a title insurance contract. Plaintiff Walker Rogge, Inc. cross-appeals from dismissal of its negligence claim against Chelsea and the defendants Ronald J. Price and Arthur W. Hood, surveyors. Plaintiff also appeals the denial of interest from the time of closing and attorney's fees. The New Jersey Land Title Association, on leave, filed a brief as amicus curiae.
On December 12, 1979, Walker Rogge, Inc. contracted to purchase real property owned by Alexander and Constance Kosa. The total price was to be determined on a per acre basis. The contract indicated the quantity of land to be "19 acres more or less," but provided that a price adjustment would be made at settlement "for deviations from the amount of 19 acres, as shown by Price's Survey. . . ." The contract made time of the essence, and the closing of title took place on December 31, 1979.
On or about December 13, 1979, plaintiff's president, John Rogge, a man experienced in real estate transactions, contacted Price Walker Associates regarding an updated survey. A 1975 survey of the subject property had been done by Price Walker. Defendant Arthur Hood, a Price Walker employee, carried out the updating of the earlier survey for which Rogge was never billed. On that same day, Rogge also called defendant Chelsea. It was disputed at trial as to what Rogge actually requested; however, the trial judge concluded that Rogge ordered a title insurance policy, not a title search.
Chelsea issued a title commitment which set a metes and bounds description identical to that of the 1975 Price survey, but did not specify an acreage amount. Chelsea's agent was unable to say how a description identical to that in the Price Walker survey came to be used.
On December 31, the date of closing, Rogge was still not in possession of the updated survey. He therefore called Price
and received an oral confirmation that the 1979 updated survey was the same as the 1975 survey. On that basis, plaintiff, who was not represented by an attorney, carried out the agreement based on the sale of 18 acres of land at $16,000 per acre. Kosas' attorney did not use the description in the deed into Kosas when preparing the deed from Kosas to Rogge, but used the 1975 Price Walker survey description instead. The deed into Kosas contained a different metes and bounds description and stated the total acreage as 12.48, rather than the approximately 18 acres contained in the 1975 survey.
Chelsea issued a policy of title insurance, effective January 10, 1980, insuring "against loss or damage, not exceeding the stated amount of insurance, costs, attorneys' fees and expenses which the company may become obligated to pay hereunder, sustained or incurred by the insured by reason of:
1. Title to the estate or interest described in Schedule A being vested otherwise than as stated therein;
2. Any defect in or lien or encumbrance on such title;
3. Lack of a right of access to and from the land; or
4. Unmarketability of such title.
The policy also contained exceptions, one of which stated:
This policy does not insure against loss or damage by reason of the following:
3. Encroachments, overlaps, boundary line disputes and other matters which could be disclosed by an accurate survey and inspection of the premises.
This exception was not removed from the policy at closing as testimony indicated would usually be the case when the title company is presented with a current survey. See 13A N.J. Practice (Lieberman, Abstracts and Titles) (3 ed. 1966), § 1701 at 194.
In 1985, Rogge sought to purchase lots adjacent to the subject property. Desiring to subdivide he hired Dennis Duffy to do a survey of the new property along with the land he had acquired from the Kosas. The Kosa-Rogge lots were found difficult to survey because of the absence of any physical monuments which would establish the rear boundary line, known as the "Grant line" or "Reed Plantation line." Duffy worked over a period of three months with old deeds and
surveys containing various distance descriptions attempting to locate the Grant line. Duffy's survey revealed that plaintiff owned only 12.43 acres, not 18 acres as stated in the Price Walker survey.
Duffy testified as to the procedure he and his employees utilized to set the boundaries and Grant line. He opined that the Price Walker inaccuracy occurred because the surveyor had included a point which was without basis in the older deeds and surveys.
Chelsea presented testimony from a surveying expert who did not undertake any field work, but who had studied the work done by Duffy and other surveyors. The expert testified that he was unable to conclude where the Grant line was located due to discrepancies in the ancient deeds and surveys. Duffy testified that if Chelsea's expert's calculations were carried out, plaintiff would have a total of 15.3 acres. Duffy also testified that earlier surveys had estimated the property at approximately 17 acres, based strictly on monument location and descriptions which did not include distances. The first deed which contained distances along with the monuments was that into Kosa from Aiello which set the acreage at approximately 12.4 acres.
Plaintiff's complaint against Chelsea demands recovery under the theories of negligence and contract and named Ronald J. Price, individually, and Arthur W. Hood, the Price Walker employee who prepared the 1979 updated survey, alleging negligence in the preparation of the inaccurate surveys. Plaintiff also made claim against the Kosas for breach of warranty deed; however, the Kosas could not be served with process, and therefore, at the time of trial, plaintiff took a voluntary dismissal as to them.
The trial court accepted Duffy's survey as the "most accurate," but at the end of plaintiff's case dismissed the negligence complaint against the defendant-surveyors because of the absence
of expert testimony to establish a standard of care which had not been met by the surveyors.
The trial judge in a letter opinion dated October 20, 1986, determined that the "loss" of acreage was within the coverage of Chelsea's policy. Recovery was permitted under three of the four enumerated guarantees, namely, (1) title to the estate or interest described in Schedule A being vested otherwise than as stated therein; (2) any ...