Court of Appeals Rules that Title Companies Owe Duty of Care in Tort when Conducting Title Searches
In the case of 100 Investment Limited Partnership v. Columbia Town Center Title Co., the Maryland Court of Appeals was asked to determine whether a title company owed a tort duty of reasonable care to its customer, the purchaser of real property, when conducting a title search, notwithstanding any contractual obligation that may also exist. The Court ruled that, despite the fact that the title company – customer relationship derives from contract, an “intimate nexus” exists between the parties because of the foreseeability that the customer’s purpose for retaining the title company is to rely on its professional judgment. This intimate nexus justifies the imposition of a tort duty to exercise reasonable care in carrying out one’s professional services. In this regard, the Court of Appeals has decided that title companies should be treated similarly to lawyers, accountants, architects, and other professionals that have been found to owe their customers tort duties, in addition to those assumed by contract.