SELF-STUDY MATERIAL ANNUAL ROBERT C. SNEED TEXAS … · 24th ANNUAL ROBERT C. SNEED TEXAS LAND TITLE INSTITUTE December 4-5, 2014 THE FIFTH CIRCUIT’S LODESTAR FOR ALLOCATING TITLE

SELF-STUDY MATERIAL24th ANNUAL ROBERT C. SNEEDTEXAS LAND TITLE INSTITUTE

December 4-5, 2014

THE FIFTH CIRCUIT’S LODESTARFOR ALLOCATING TITLE AND SURVEY RISKS

AND MAXIMIZING TITLE-INSURANCE COVERAGE

J. EDWIN MARTINState Bar No. 130862003308 Oak Grove Avenue

Dallas, Texas 75204

Telephone: (214) 747-6222Facsimile: (214) 747-6232

Email: [email protected]

ATTORNEY FOR DOUBLETREE PARTNERS, L.P.

TABLE OF CONTENTS

Subject Matter Page

I. An Admittedly-Odd Analogy to Palsgraf 1

II. Factual Narrative 2

A. Doubletree Ranch 2

B. Conditions for Survey Coverage Met 2

C. Doubletree’s Purchase of Doubletree Ranchand Title Insurance with Survey Coverage 2

D. Doubletree’s Partial-Title Loss Caused bythe Failure of the Survey to Properly Showthe Flowage Easement and the No-Building Zone 3

E. Doubletree’s Title-Loss Claim, Lawyers’s Denial of the Title-Loss Claim,and Lawyers’s Suit Against Doubletree 3

F. Doubletree’s Full-Title Loss Uponthe Foreclosure of Doubletree Ranch 3

III. Survey-Coverage Focus 3

IV. So Many Claims, So Little Law 4

V. Landmark Case of First Impression 5

VI. Trial Court’s Analysis of Doubletree’s Title Insurance Coverage 5

VII. The Fifth Circuit Held that Survey Coverage Is AllowedUnder Texas Law 5

VIII. The Fifth Circuit Held that the Modification ofthe Survey Exception Resulted in Survey Coveragefor the Location of Flowage Easement 6

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IX. The Fifth Circuit Held that the Modification ofthe Flowage Easement Exception Resulted in Survey Coveragefor the Location of the Flowage Easement 7

X. The Fifth Circuit Held that the Acts-of-the-Insured ExclusionDid Not Exclude Coverage for the Location of the Flowage Easement 10

XI. The Fifth Circuit Passed on the Opportunity to Clarifythe Application of Acts-of-the-Insured Exclusionto “Subject to” Conveyances 12

XII. Document-Drafting Practice Pointers:The Doubletree Lodestar for Negotiating and DraftingContracts of Sale and Closing Documents 15

A. The Doubletree Lodestar for Designating an Underwriterin Contracts of Sale 15

B. The Doubletree Lodestar for Designating a Surveyorin Contracts of Sale 16

C. The Doubletree Lodestar for Disclaiming the Applicationof the Acts-of-the-Insured Exclusion in Contracts of Saleand Closing Documents 16

D. The Doubletree Lodestar for Referencing the Surveyin Contracts of Sale and Closing Documents 18

XIII. Due-Diligence Practice Pointers:The Doubletree Lodestar for Scrutinizing and Lodging Objectionsto Title Commitments, Exception Documents, and Surveys 19

XIV. Post-Closing Practice Pointer:The Doubletree Lodestar for Scrutinizing Title Policies 216

XV. Significance of Doubletree in Choosing an Underwriter,Negotiating Coverage, and Presenting and Prosecuting a Claim 21

XVI. A Hypothetical Pickle 24

XVII. An Existential Observation Regarding Doubletree 25

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Exhibits Page

Exhibit 1 28

Statement of the Facts 28

A. Doubletree Ranch 28

B. Creation of the Flowage Easement andthe No-Building Zone Encroaching andEncumbering Doubletree Ranch 28

C. Conditions for Survey Coverage Met 29

D. Doubletree’s Purchase of Doubletree Ranch,the Survey, and Survey Coverage 30

E. Lawyers’s Issuance of the Title-Insurance Policy 30

F. Doubletree’s Intended Development ofDoubletree Ranch, as Surveyed 31

G. Doubletree’s Partial-Title Loss Caused bythe Failure of the Survey to Properly Showthe Flowage Easement and the No-Building Zone 31

H. Doubletree’s Notice of the Claim 32

I. Lawyers’s Denial of the Claim 32

J. Doubletree’s Supplemental Notice of the Claim 32

K. Lawyers’s Unilateral Modification of the Title-Insurance Policy 32

L. Lawyers’s Suit Against Doubletree 32

M. Doubletree’s Inability to DevelopDoubletree Ranch 32

N. Lawyers’s Payment of the Claim Would HavePrevented the Foreclosure of Doubletree Ranch 33

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O. Doubletree’s Full-Title Loss Uponthe Foreclosure of Doubletree Ranch 33

Exhibit 2 34

Shoehorned Witticisms 34

Exhibit 3 36

Extracted Practice Pointers 36

Exhibit 4 40

Sample Language and Commentary for Drafting Awayfrom the Acts-of-the-Insured Exclusion 40

Exhibit 5 42

Sample Doubletree Lodestar Deed for Drafting Awayfrom the Acts-of-the-Insured Exclusion 42

Exhibit 6 46

Sample Language and Commentary for Lodgingan Objection to a Survey-Identified Exception 46

Resume of J. Edwin Martin

Bibliography of J. Edwin Martin

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TABLE OF AUTHORITIES

Authority Page

Cases

Averyt v. Grande, Inc.,686 S.W.2d 632, 634 (Tex.App.–Texarkana 1985),aff’d, 717 S.W.2d 891 (Tex. 1986) 13

Brown v. St. Paul Title Ins. Co.,634 F. 2d 1103 (8th Cir. 1980) 11

Duncan v. First Am. Title Ins. Co.,No. C14-93-171-CV, 1994 Tex. App. LEXIS 20 at *12(Tex.App.–Houston [14th Dist.] Jan 6, 1994, no writ)(not designated for publication) 13, 14, 16, 25

Erie R.R. Co. v. Tompkins,304 U.S. 64, 82 L. Ed. 1188,58 S. Ct. 817 (1938) 14, 27

Kokernot v. Caldwell,231 S.W.2d 528, 531 (Tex.Civ.App.–Dallas 1950, writ ref’d) 13

Lawyers Title Ins. Corp. v. Doubletree Partners, LP,739 F.3d 848 (5th Cir. 2014) 1, 4, 5, 6, 7, 8, 10, 11, 12,

13, 14, 15, 16, 18, 19, 20,21, 22, 23, 25, 26, 27, 40,

42, 46

McDonagle v. Stewart Title Guaranty Co.,No. 05-13-00036-CV (Tex.App.–Dallas May 1, 2014) 12

Palsgraf v. Long Island R.R. Co.,248 N.Y. 339, 162 N.E. 99 (N.Y. 1928) 1

Prudential Ins. Co. of Am. v. Jefferson Assocs., Ltd.,896 S.W.2d 156, 161 (Tex. 1995) 16, 36

San Jacinto Title Guar. Co. v. Lemmon,417 S.W.2d 429 (Tex.Civ.App.–Eastland 1967, no writ) 26, 27

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Spellings v. Lawyers Title Ins. Corp.,644 S.W.2d 804 (Tex.App.–Corpus Christi 1982, writ ref’d n.r.e.) 23

Stout v. Rhodes,373 S.W.2d 94, 95 (Tex.Civ.App.–San Antonio 1963, writ ref’d n.r.e.) 13

Legal Precepts

After-Acquired-Title Doctrine 17, 36, 41, 44

Contra-Insurer Rule 10

Rule

Tex. R. App. P. 47.7(b) 13

Statute

Tex. Ins. Code § 2704.104 4

Other Authorities

Scott Adams, Dilbert 21

Am.Jur. 13

Words & Phrases (“subject to”) 13

Basic Manual of Rules, Rates and Forms forthe Writing of Title Insurance in the State of Texas,Texas Department of Insurance (2014) 4

Procedural Rule P-2 4Procedural Rule P-8a(2) 4Procedural Rule P-8b(2) 4Rule R-16 4

Beowulf 14, 16

Yogi Berra 13, 14, 34

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Francis Pharcellus Church, Is There a Santa Claus?,The New York Sun, Sept. 21, 1897 6

Grateful Dead, Cumberland Blues 23

Bob Hope Rule of Citation (a/k/a the Rule of Evaporating Attribution) 26, 34, 35

Karl V. Hunter, Top Ten Title Claims(28th Annual Advanced Real Estate Law Course, 2006) 4

Jennifer Lutz, Money at Stake in Deed Survey Ruling,Amarillo Globe News, Dec. 2, 2001(available at amarillo.com/stories/2001/12/02/new_moneyat.shtml) 4

Joe McKnight 14

Rounders 24, 34

Taylor Swift, We Are Never Ever Getting Back Together 17, 20, 36, 38

Tex.Jur.3d 12, 13

Covenants, Conditions & Restrictions § 129 13Deeds of Trust and Mortgages § 106 12Real Estate Sales § 248 12Words & Phrases (“subject to”) 13

Texas Real Estate Forms Manual (2d Ed. 2013) 16, 17

Form 12-1 16, 17

Jim Wallenstein 26

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THE FIFTH CIRCUIT’S LODESTARFOR ALLOCATING TITLE AND SURVEY RISKS


By J. Edwin Martin

I.An Admittedly-Odd Analogy to Palsgraf

Who remembers Palsgraf?1 It is the hidden-firecrackers case (not the hairy-hand case, the monkeytrial, or the trees-have-standing case).

Anywho, there is, admittedly, an odd analogy between that landmark case and the recently-decidedDoubletree.2

Palsgraf is best described as a torts exam for the legendary New York Court of Appeals, and theopinion sets forth a lodestar for torts analysis.

Doubletree is best described as a title-insurance exam for the Fifth Circuit, and the opinion sets fortha lodestar for:

A. negotiating and drafting contracts of sale and closing documents;

B. scrutinizing title commitments, exception documents, surveys, and title policies;

C. lodging title and survey objections; and

D. purchasing Endorsement Form T-19.1.

The Doubletree lodestar is a judge-proscribed instruction manual for lawyering real-estate deals to:

1. properly allocate title and surveys risks; and

2. maximize title-insurance coverage.

The opinion should have a dynamic impact upon the practice of real-estate law in Texas.

1Palsgraf v. Long Island R.R. Co., 248 N.Y. 339, 162 N.E. 99 (N.Y. 1928).

2Lawyers Title Ins. Corp. v. Doubletree Partners, LP, 739 F.3d 848 (5th Cir. 2014).

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II.Factual Narrative

A.Doubletree Ranch

Once upon a time, a family owned and operated a dairy farm spanning more than 600 acres. As timepassed, the family sold various and sundry parcels of the estate. The final “puzzle piece”-a 36.379-acre tract of land in Highland Village, Denton County, Texas-featured a roadway entrance whichhad old-growth trees on each side of the road, forming a natural canopy, and giving rise to the name“Doubletree Ranch”.

Doubletree Ranch served as a special events center for weddings, anniversaries, graduation parties,bar mitzvahs, birthdays, and the like. The family sold this property to Doubletree Partners, L.P.(“Doubletree”), a single-asset, special-purpose entity.

B.Conditions for Survey Coverage Met

In connection with the purchase, Doubletree sought survey coverage (as a part of its title insurancecoverage). Accordingly, before the closing of Doubletree’s purchase, a survey was prepared andsubmitted for review by Doubletree and Lawyers Title Insurance Corporation (“Lawyers”).

As shown on the survey, the flowage easement, which was owned by the federal government forflood-control purposes, appeared to generally run along the eastern and southern boundaries ofDoubletree Ranch. Because Doubletree intended to use that portion of the property for landscaping(green space), the flowage easement, as depicted on the survey, did not encroach any of the intendedlocations of the residential buildings, nor otherwise negatively affect the development of DoubletreeRanch.

Lawyers accepted and approved the survey, and, at the closing, Doubletree paid the additional 15%survey coverage premium. Thus, Doubletree met the requirements for survey coverage.

C.Doubletree’s Purchase of Doubletree Ranchand Title Insurance with Survey Coverage

Doubletree closed its purchase of Doubletree Ranch, intending to develop it as a residentialcommunity. In the vesting deed, Doubletree took title “subject to” the flowage easement “shownon survey”. Lawyers issued its title insurance policy with a modified survey exception and a tailoredflowage easement exception (which matched the exception in the vesting deed).


D.Doubletree’s Partial-Title Loss Caused bythe Failure of the Survey to Properly Show

the Flowage Easement and the No-Building Zone

Doubletree commenced the development of Doubletree Ranch as a senior living residentialcommunity, with eighteen residential buildings spread across the property. During this process,Doubletree discovered that the survey was grossly inaccurate. Most particularly, the survey failedto show that the flowage easement and its no-building zone encroached upon and encumbered a giantswath of Doubletree Ranch (covering a multitude of acres). That portion of Doubletree Ranchencumbered by the no-building zone included the intended locations of five of the eighteenresidential buildings; this area was rendered unusable for residential development, and, in fact,unusable for any development without the express written consent of the federal government.

E.Doubletree’s Title-Loss Claim,

Lawyers’s Denial of the Title-Loss Claim,and Lawyers’s Suit Against Doubletree

Doubletree provided Lawyers with its concomitant title-loss claim. Lawyers denied the title-lossclaim and sued Doubletree for declaratory relief.

F.Doubletree’s Full-Title Loss Upon

the Foreclosure of Doubletree Ranch

Because of the flowage easement and its no-building zone, Doubletree was unable to developDoubletree Ranch as intended. Efforts to proceed with alternative development plans failed as well.Thus, Doubletree was unable to service its debt or further refinance the development of DoubletreeRanch. Fifteen months after Doubletree made the title-loss claim, Doubletree’s lender foreclosedon Doubletree Ranch. Consequently, Doubletree’s partial-title loss became a full-title loss.3

III.Survey-Coverage Focus

Approximately two years after the suit was filed, and about a year after the foreclosure, the authorbecame an attorney of record for the insured, and focused much of the case on survey coverage.

3For a full Statement of the Facts, see Exhibit 1 attached to this outline.


IV.So Many Claims, So Little Law

The Texas Department of Insurance compiles its survey coverage claims using the American LandTitle Association survey coverage claims codes.4 As compiled, Texas survey coverage claimscommonly constitute 3% to 7% of the annual claims.5

Survey coverage is vaguely described in the Texas Department of Insurance’s Basic Manual ofRules, Rates and Forms for the Writing of Title Insurance in the State of Texas under ProceduralRules P-2, P-8a(2), P-8b(2), and Rate Rule R-16. The rules explain the survey-coverageprocurement process, but they fail to meaningfully explain what is being procured. Whatever surveycoverage is, it must be important: the legislature prohibits an insurer from using an indemnity fromthe insured to reallocate survey-coverage risk of loss.6

Before Doubletree, Texas survey-coverage law was scant (mainly, passim references in cases, rules,and statutes). Because of this legal void, when older lawyers told younger lawyers about surveycoverage, it sounded like a jurisprudential campfire story. All told, pre-Doubletree, perhaps the best summary of Texas survey coverage law was an obscurequote appearing in an old Amarillo Globe News article, wherein the Deputy Commissioner of TitleInsurance for the Texas Department of Insurance observed:

A standard title insurance policy excludes property boundaries such as sidewalks andeasements. If a current survey is provided to the title company, the entire propertycan be covered.7

Consequently, in briefing the Fifth Circuit, the author treated the Amarillo Globe News quote as TheRosetta Stone of Texas survey-coverage Black-Letter Law.

Why have there been so many claims, yet so little law? The author’s educated guess is most survey-coverage claims are small, and they are paid by the underwriter. Until now. Doubletree suffered acatastrophic title loss, giving rise to the Fifth Circuit’s opinion.

4Karl V. Hunter, Top Ten Title Claims (28th Annual Advanced Real Estate Law Course, 2006).

5Id.

6Tex. Ins. Code § 2704.104.

7Jennifer Lutz, Money at Stake in Deed Survey Ruling, Amarillo Globe News, Dec. 2, 2001(available at amarillo.com/stories/2001/12/02/new_moneyat.shtml); citing Rob Carter, theDeputy Commissioner of Title Insurance for the Texas Department of Insurance.


V.Landmark Case of First Impression

For the Fifth Circuit, this case was one of first impression. If bad facts make bad law, then theopposite should be true: Doubletree has good facts to make good law.

The opinion presents the most in-depth analysis of title insurance in the history of Texasjurisprudence; for that reason alone, it is a landmark case.

VI.Trial Court’s Analysis of Doubletree’s Title Insurance Coverage

The trial court held that:

A. Texas law does not allow for survey coverage in the same way that itis allowed in other states;

B. the Acts-of-the-Insured Exclusion applied; and

C. the flowage easement exception applied.8

VII.The Fifth Circuit Held that Survey Coverage Is Allowed

Under Texas Law

In the trial court, Lawyers successfully argued that Texas law does not allow for survey coveragebecause the Texas Land Title Association forms promulgated by the Texas Department of Insurancediffer from the American Land Title Association forms used in other states. In other words, Lawyersargued that survey coverage was indeed a campfire story, and Lawyers convinced the trial court todisbelieve it.

The Fifth Circuit disagreed, however, pointing to the Texas Department of Insurance’s allowance of the modification of the survey exception as the green light for-and the gateway to-surveycoverage.9 Thus, the Fifth Circuit believed the generations-old campfire story.

8Doubletree at 855.

9Id. at 859-860.


Yes, Virginia, there is a Santa Claus.10

VIII.The Fifth Circuit Held that the Modification of

the Survey Exception Resulted in Survey Coveragefor the Location of Flowage Easement

The Fifth Circuit commences its survey-coverage analysis with the modification of the surveyexception.11

In the trial court, Lawyers successfully argued that Texas survey coverage insures only the outerboundary of Doubletree Ranch (i.e., the “picture frame”, but not the “picture”, of DoubletreeRanch, or its“box”, but not its “contents”). In other words, according to Lawyers’s Pencil-Thin,Perimeter-Only Premise, Texas survey coverage covers only the very edges of the property surveyedby the surveyor-not the entire property. As argued, amending the survey exception provided onlyproperty-border insurance, protecting Doubletree only against property-boundary disputes withadjoining land owners.12

The Fifth Circuit disagreed with Lawyers’s Pencil-Thin, Perimeter-Only Premise, noting that theflowage easement is an “encroachment”, and pointing to the title commitment cover letter, whichsaid that only “specific matters [like the flowage easement] disclosed on the survey” would be notbe covered under a “more complete title insurance policy” containing survey coverage.13 Thus, eventhough the flowage easement did not affect the property-boundary lines of Doubletree Ranch, thesurveyor’s error-improperly identifying the location of the flowage easement-was a risk allocated tothe insurer unless an exception (other than the survey exception) or an exclusion applied.14

So how did the Amarillo Globe News quote fare as The Rosetta Stone of Texas survey-coverageBlack-Letter Law? The Fifth Circuit:

10Francis Pharcellus Church, Is There a Santa Claus?, The New York Sun, Sept. 21, 1897.

11Doubletree at 860-864.

12One can imagine a border patrol officer who fishes illegal aliens out of the Rio Grande River,but refuses to chase them once they reach land.


14Id.


A. disagreed with the Amarillo Globe News by holding that an easementboundary line was not a “boundary line” covered by the modificationof the survey exception; but

B. agreed with the Amarillo Globe News by holding that:

1. an easement is an “encroachment” covered by themodification of the survey exception; and

2. the entire property is covered by the modification ofthe survey exception, not just the edges of theproperty.15

Based upon the foregoing, the surveyor’s error-improperly identifying the location of the flowageeasement-was a risk allocated to the insurer unless an exception-other than the survey exception-oran exclusion applied.

IX.The Fifth Circuit Held that the Modification of

the Flowage Easement Exception Resulted in Survey Coveragefor the Location of the Flowage Easement

After scrutinizing the modification of the survey exception, the Fifth Circuit turned to anypotentially-applicable exceptions.16

The flowage easement exception in the title policy, the vesting deed and other documents reads:

Flowage easement...recorded..., and shown on survey dated March 22, 2006 by MarkPaine, RPLS #5078.

Lawyers argued that the added language to the survey-identified exception either increases the scopeof the exception (by construing “and” to mean “or”), thus decreasing coverage, or the added lingois meaningless because the exception is set forth in the recorded instrument, and the added textmerely further identifies that exception.

15Id. at 860-864.

16Id.


The Fifth Circuit disagreed, noting that the added language should be given substantive effect,increasing-rather than decreasing-coverage.17 Therefore, the added text narrowed the scope of theflowage easement exception in the title policy, so that the exception did not apply to the surveyor’serror in failing to properly identify the location of the flowage easement.18

By implication, if the survey exception had been modified, but not the flowage easementexception, then the scope of the flowage easement exception would not have been narrowed,and the flowage easement exception would apply.

A trinity of Venn diagrams help explain the arguments and analysis.

If two intersecting circles are drawn, and one circle is designated “the scope of the exceptiondescribed in the recorded instrument”, and the other circle is designated “the scope of the exceptionshown on the survey”, “and” means “and”, then the intersection of the two circles, and only theintersection of the two circles, represents the scope of the exception:

Doubletree urged this intrepretation. The Fifth Circuit found this interpretation is reasonable.

If “and” means “or”, then the two circles, in their totality, represent the scope of the exception:

17Id. at 864-866.

18Id.


Lawyers urged this intrepretation. The Fifth Circuit found this interpretation is unreasonable, andit does not create an ambiguity.

But the third interpretation does:


As illustrated-and argued by Lawyers-the survey lingo is meaningless because the exception is setforth in the recorded instrument, and the added text merely further identifies that exception, and thecircle is designated “the scope of the exception described in the recorded instrument”, in its totality,represents the scope of the exception.

The Fifth Circuit found that the survey lingo is ambiguous-and it is reasonable to interpret the lingoas meaningless-but, under the Contra-Insurer Rule, the reasonable interpretation propounded by theinsured prevails (the tie goes to the insured).19 Therefore, according to the Fifth Circuit, the surveylingo has meaning-“and” means “and”-so the intersection of the two circles, and only theintersection of the two circles, represents the scope of the exception.20

Based upon the foregoing, because the flowage easement does not apply, the surveyor’s error-improperly identifying the location of the flowage easement-was a risk allocated to the insurer unlessan exclusion applied.

X.The Fifth Circuit Held that the Acts-of-the-Insured Exclusion

Did Not Exclude Coverage for the Location of the Flowage Easement

After scrutinizing the modification of the survey exception and any potentially-applicableexceptions, the Fifth Circuit turned to any potentially-applicable exclusions.21

The Acts-of-the-Insured Exclusion appears in every ALTA and TLTA policy. The author firmlybelieves this exclusion is the favorite policy provision of every underwriter in America (much to thechagrin of the loss-limitation provision); to the author’s recollection, this exclusion has been citedin every denial that he has ever received.

The Acts-of-the-Insured Exclusion is designed to exclude self-inflicted wounds. For example, if theinsured procures purchase-money financing to buy the property, then the Acts-of-the-InsuredExclusion applies to the purchase-money lien, regardless of whether that lien appears as anexception. Likewise, if the insured has work done to the property before the purchase, and fails topay for that work, then the Acts-of-the-Insured Exclusion applies to the mechanic’s lien, regardlessof whether that lien appears as an exception.

19Id.

20Id.

21Id. at 866-868.


The exact language of the exclusion will vary from state to state, and from time to time, but theintent remains the same-to exclude title defects caused by the insured.

In Doubletree, the Acts-of-the-Insured Exclusion excludes defects, liens, encumbrances, adverseclaims, and other title matters “created, suffered, assumed or agreed to by” Doubletree.

In the trial court, Lawyers successfully argued that the flowage easement exception in the vestingdeed and other documents triggered the application of the Acts-of-the-Insured Exclusion becauseDoubletree knew about the flowage easement, and Doubletree took the property “subject to” thatexception.

The Fifth Circuit held that there must be more than mere knowledge of a title defect to trigger theapplication of the Acts-of-the-Insured Exclusion. Instead, there must be knowledge of the scope andextent of the defect, coupled with a purposeful intent to acquire the property with that defect, to thatknown scope and extent.22 The Fifth Circuit quoted the Eighth Circuit:

The insurer can escape liability only if it is established that the defect, lien, orencumbrance resulted from some intentional misconduct or inequitable dealings bythe insured or the insured either expressly or impliedly assumed or agreed to thedefects or encumbrances in the course of purchasing the property involved. Thecourts have not permitted the insurer to avoid liability if the insured was innocent ofany conduct causing the loss or was simply negligent in bringing about the loss.23

Guided by the Eighth Circuit, the Fifth Circuit forged a mens rea test for the application of the Acts-of-the-Insured Exclusion.

The Fifth Circuit found that:

A. Doubletree did not have knowledge of the full scope and extent of theeasement, precluding the application of the Acts-of-the-InsuredExclusion;24

22Id.

23Id. at 867 (emphasis added); quoting Brown v. St. Paul Title Ins. Co., 634 F. 2d 1103, 1107-08n. 8 (8th Cir. 1980).

24Doubletree at 868.


B. the survey language in the flowage easement exception in the closingdocuments limited the scope and extent of the title defectencumbering the property that Doubletree intended to acquire;25

C. because Doubletree lacked the requisite intent to acquire the propertywith the easement in that location, the application of the Acts-of-the-Insured Exclusion was never triggered;26 and

D. to hold otherwise would “completely nullify” survey coverage.27

Because the exclusion does not apply, the surveyor’s error-improperly identifying the location of theflowage easement-was a risk allocated to the insurer.

XI.The Fifth Circuit Passed on the Opportunity to Clarify

the Application of Acts-of-the-Insured Exclusionto “Subject to” Conveyances

The trial court construed the vesting deed’s “subject to” language to trigger the Acts-of-the-InsuredExclusion, finding that, under the deed, Doubletree “suffered” and “assumed” the FlowageEasement. The insured strongly disagreed with this finding, and the issue was heavily briefed onappeal. In doing so, the insured cited decades-old Texas Black-Letter Law, which says that:

A. by accepting a “subject to” deed, the grantee does not becomepersonally liable for the encumbrance (because a “subject to”conveyance is distinct from an assumption, which imposes personalliability upon the grantee);28

25Id. at 867.

26Id. In contrast, in a case citing Doublebletree, the Dallas Court of Appeals found that aninsured had knowledge of the full scope and extent of the alleged title defect, so the Acts-of-the-Insured Exclusion applied. McDonagle v. Stewart Title Guaranty Co., No. 05-13-00036-CV(Tex.App.–Dallas May 1, 2014).


28Tex.Jur.3d Deeds of Trust and Mortgages § 106 and Real Estate Sales § 248.


B. “subject to” are words of limitation and qualification (such as“limited by”), not words of contract;29

C. “[t]here is nothing in the use of the words...which would even hint atthe creation of affirmative rights;”30 and

D. taking “subject to” gives notice, which is acknowledged by thegrantee; it does not operate as an acknowledgement of validity, andthe grantee is free to challenge the subject defect.31

Thus, the insured argued that a grantee taking title “subject to” an encumbrance cannot self-inflicta title wound nor otherwise trigger the Acts-of-the-Insured Exclusion.

Lawyers cited a non-precedential, unpublished opinion wherein the president of a corporationexecuted a deed of trust forming the basis of the title complaint, a case which, in the opinion of theauthor, hands down the right result, but with the poorly-worded Acts-of-the-Insured Exclusion,knowledge, and “subject to” reasoning.32 The court should have reasoned that it would disregard thecorporate fiction to apply the Acts-of-the-Insured Exclusion. Instead, the court created very bad“subject to” law. In theory, this case is not precedential. But both the trial court and the FifthCircuit cited it.33 As the great Yogi Berra mused:

29See, e.g., Kokernot v. Caldwell, 231 S.W.2d 528, 531 (Tex.Civ.App.–Dallas 1950, writ ref’d);Stout v. Rhodes, 373 S.W.2d 94, 95 (Tex.Civ.App.–San Antonio 1963, writ ref’d n.r.e.); Averyt v.Grande, Inc., 686 S.W.2d 632, 634 (Tex.App.–Texarkana 1985), aff’d, 717 S.W.2d 891 (Tex.1986); and Tex.Jur.3d Words & Phrases (“subject to”). Accord, Am.Jur. Words & Phrases(“subject to”) (“subject to” is a term of qualification and does not create new interests).

30Kokernot at 531.

31Stout at 95 and Tex.Jur.3d Covenants, Conditions & Restrictions § 129.

32Duncan v. First Am. Title Ins. Co., No. C14-93-171-CV, 1994 Tex. App. LEXIS 20 at *12(Tex.App.–Houston [14th Dist.] Jan 6, 1994, no writ) (not designated for publication). This pre-2003 unpublished opinion is non-precedential. Tex. R. App. P. 47.7(b).



In theory, there is no differencebetween theory and practice.

In practice, there is.34

To the author, Duncan represents a bad Erie guess by a federal trial court that failed to followdecades-old, well-settled Texas Black-Letter Law.35

A favorite saw of Joe McKnight, a distinguished professor at the SMU Dedman School of Law, is“old law is the best law”. The author agrees; however, the old “subject to” law is written in BeowulfOld English; it is difficult to quote. The old law sounds old, like Jim Crow laws, Prohibition, andvoting-rights laws before women’s suffrage; it is the Fat Elvis.

To the insurer, Duncan represents a sea change in Texas “subject to” law. Written in ModernEnglish, it is the hip, cool law; it is the Skinny Elvis.

To clarify the application of the Acts-of-the-Insured Exclusion to “subject to” conveyances, thebriefing battle lines were drawn: Fat Elvis versus Skinny Elvis; however, the Fifth Circuit decidedDoubletree without the two kings kung fu fighting.

Doubletree is significant for its silence; for transactional lawyers, the silence is deafening. “Subjectto” appears to be a two-word idiom spoken in an obscure dialect understood by Texas real-estatelawyers, but not by the courts that construe their work product. Yet practitioners draft documentsas if this phrase the phrase sparkles with pixie dust; to them, it is magical, just like “abracadabra”,“hocus pocus”, and “shazam”.

34Yogi Berra (citation unknown). For a compilation of the Shoehorned Witticisms, see Exhibit 2attached to this outline.

35Erie R.R. Co. v. Tompkins, 304 U.S. 64, 82 L. Ed. 1188, 58 S. Ct. 817 (1938).


XII.Document-Drafting Practice Pointers:

The Doubletree Lodestar for Negotiating and DraftingContracts of Sale and Closing Documents

A.The Doubletree Lodestar for Designating an Underwriter

in Contracts of Sale

It is very common for a real-estate practitioner to designate, in a contract of sale, a title-insuranceagency to serve as the escrow agent for the real-estate transaction. Concurrently designating a title-insurance underwriter is much less common. This practice is shortsighted. If the insured suffers atitle loss, then the claim will be handled by the underwiter; the agency will have little or no input.

When choosing an underwriter, choose one that is trusted (if any). Also, consider whether a federalcourt or state court forum is preferred; there is an opportunity to tilt the choice of forum in thecontract of sale. For example, if the insured is a Texas entity, and a state-court forum is preferred,then, ipso facto, there is a preference to designate an underwriter that is incorporated in Texas ormaintains its principal place of business in Texas. By doing so, the insured can sue in a Texas statecourt, and removal to federal court will be precluded by a lack of diversity of citizenship. On theother hand, if the insured is a Texas entity, and a federal-court forum is preferred, then, ipso facto,there is a preference to designate an underwriter that is not incorporated in Texas and does notmaintain its principal place of business in Texas. By doing so, even though the insured must sue ina Texas state court (because Texas is its home state), it is quite likely that the case will be removedto federal court because of the diversity of citizenship. Finally, consider waiving the choice of anundesirable forum.

Practice Pointer Number 1In the contract of sale, designate a trusted underwriter (if any).

Tilt the choice of forum for a claim dispute by designatinginto or out of diversity of citizenship.36

Practice Pointer Number 2Procure a waiver of an undesirable forum from the underwriter.

36For a compilation of the Extracted Practice Pointers, see Exhibit 3 attached to this outline.


B.The Doubletree Lodestar for Designating a Surveyor

in Contracts of Sale

In Doubletree, the survey was grossly inaccurate, largely because the surveyor was lazy; rather thantaking elevations to locate a no-building zone whose parameters were defined by elevations, thesurveyor relied upon elevations shown on flood maps, and those maps were wrong.

Practice Pointer Number 3In the contract of sale, designate a trusted surveyor.

C.The Doubletree Lodestar for Disclaiming the Applicationof the Acts-of-the-Insured Exclusion in Contracts of Sale

and Closing Documents

The phrase “subject to” is inherently ambiguous; it has two distinct constructions under Texas law: the traditional Beowulf construction and the modern Duncan construction. Choose the traditionalconstruction, and explain its meaning.

Practice Pointer Number 4Disclaim the application of the Acts-of-the-Insured Exclusion

at every opportunity, particularly with regard to “subject to” conveyances.Amplify the phrase “subject to”, akin to the way the “as is, where is”

clause was amplified after the Texas Supreme Court decidedthe Prudential case.37

The Texas Real Estate Forms Manual deed does not amplify the phrase “subject to”,38 so the formis subject to two different interpretations; the use of this ambiguous form is not the best practice.

The Big Idea is to draft away from the Acts-of-the-Insured Exclusion, not toward or into it. Whendescribing an exception, the term “permitted” sounds like a synonym of “allowed” and “suffered”,two words which commonly appear in the Acts-of-the-Insured Exclusion.

37Prudential Ins. Co. of Am. v. Jefferson Assocs., Ltd., 896 S.W.2d 156, 161 (Tex. 1995). Forsample language and related commentary, see Exhibit 4 attached to this outline. For a sampledeed, see Exhibit 5 attached to this outline.

38Texas Real Estate Forms Manual (2d Ed. 2013) Form 12-1.


Practice Pointer Number 5Never39 call the title exceptions “permitted”. Instead, use no descriptor

whatsoever or describe the exceptions as “without warranty”or “with reservation of rights by Grantee”.

The Texas Real Estate Forms Manual deed does not use the term “Permitted Exceptions”. Instead,the manual refers to “Exceptions to Conveyance and Warranty” (which are cumulative of, anddistinct from, “Reservations from Conveyance”).40 This is a better practice than using the term“Permitted Exceptions”, but it is not the best practice. Why? Again, it creates an ambiguity.

If an exception is invalid, then do the property rights-those in the proverbial bundle of sticks-revertto the grantor-because those rights were excepted from of the conveyance-or do those rights passto the grantee-by operation of law under the After-Acquired-Title Doctrine? Are those rights futureor springing interests? Which rules of construction apply? Why rely upon rarely-reportedcommon-law doctrines which have not been scrutinized since that dreaded bar-exam cram?

Practice Pointer Number 6(Corollary to Practice Pointer Number 5)

In the deed, disclaim any reversion of rights, adopt theAfter-Acquired-Title Doctrine, designate the title exceptions aswarranty exceptions only (rather than exceptions to conveyance

and warranty), and quitclaim and Mother Hubbardany rights to those exceptions.41

The Texas Real Estate Forms Manual deed does not contain any rules of construction or furtherconveyance provisions.42 The use of this form is not the best practice. Why? It may give rise to anambiguity, and it fails to maximize the proverbial bundle of sticks conveyed to the grantee.

How about a quick war story? Currently, a buyer and a seller are disputing the ownership of a seriesof buildings that straddle the property line between the property retained by the seller and the

39To quote Taylor Swift, “never ever ever”. Taylor Swift, We Are Never Ever Getting BackTogether.


41For sample language and related commentary, see Exhibit 4 attached to this outline. For asample deed, see Exhibit 5 attached to this outline.



property sold by the seller. The buyer’s vesting deed contains an exception to the conveyance whichreads like a standard survey exception. The buyer claims ownership of the entirety of the buildingsbecause most of their footprints are situated on his property, and-according to the buyer-the partiesintended to convey the buildings with the property. The seller claims ownership of the entirety ofthe buildings because the encroachments on the property conveyed were exceptions to theconveyance, and-according to the seller-the parties did not intend to convey the buildings with theproperty. By following the Doubletree lodestar, this controversy could have been avoided.

D.The Doubletree Lodestar for Referencing the Survey

in Contracts of Sale and Closing Documents

Practice Pointer Number 7To avoid making any warranties or representations

regarding the survey’s accuracy, when representing a seller,include survey matters in the laudry list of matters disclaimed

in the amped-up “as is, where is” clause.

Practice Pointer Number 8To avoid warranting the survey’s accuracy, when representing

a seller, in the deed, do not reference the survey unless eachsurvey-identified exception is modified to read

“regardless of its depiction on the survey”.


To avoid warranting the survey’s accuracy, when representinga buyer, in the deed of trust, do not reference the survey

unless each survey-identified exception is modified to read“regardless of its depiction on the survey”.

Practice Pointer Number 10To buttress the disclaimer of the application of the

Acts-of-the-Insured Exclusion, when representing a buyer,in the deed, reference the survey using the qualifier

“, but only to the extent shown on survey”. This lingo will increasethe scope of the seller’s warranty, and it will add gravitas to

the disclaimer of the application of theActs-of-the-Insured Exclusion.


If the seller has survey coverage, then that coverage will continue as warranty coverage, and thelanguage should be acceptable. Otherwise, the seller may push back.

Caveat to Practice Pointer Number 10When representing a buyer, referencing the survey in the deed

runs the risk of clouding the chain of title (because the survey isan unrecorded document referenced in the buyer’s chain of title).

How about a quick war story? Years ago, the author represented the purchaser of a building witha chain of title containing a reference to an unrecorded, makeshift building line appearing in theminutes of a developer’s presentation to the planning-and-zoning governing body. The authorpursued a paper chase, and eventually found the unrecorded document to ensure that the buildingwas constructed in compliance with the makeshift building line.

Admittedly, Practice Pointer Number 10 is debatable. To the author, strengthening title-insurancecoverage trumps the title cloud, which can be overcome through due diligence.

XIII.Due-Diligence Practice Pointers:

The Doubletree Lodestar for Scrutinizing and Lodging Objectionsto Title Commitments, Exception Documents, and Surveys

Real estate lawyers know that title-and-survey review is mission-critical to the acquisition of realestate.

By scrutinizing the title commitment, the exception documents, the survey, and the title policy, andthen writing an in-depth opinion, the Fifth Circuit implicitly agreed, and gave practitioners somedue-diligence guidance.

For example, the attorneys handling the purchase accepted a survey showing the “approximate”location of the flowage easement, without procuring and scrutinizing a meets-and-bounds descriptionof that easement, which led to many years of litigation. What to do?


Practice Pointer Number 11Scrutinize the survey to ensure it is picture perfect.

Never43 accept an “approximate” survey designation;that word is a giant red flag.

Practice Pointer Number 12If an easement is material to the development or intended use

of the property, then procuring and scrutinizing a meets-and-boundsdescription of that easement-to determine its exact location and magnitude-

is integral to the title-and-survey review.

Surprisingly, the Fifth Circuit found that the phrase “, and shown on survey” is ambiguous-and itis reasonable to interpret that added language as having no substantive impact upon coverage.44 That same logic applies to the phrase “, as shown on survey”. What to do?

Practice Pointer Number 13For survey coverage, in addition to modifying the

survey exception, have each survey-identified exceptionmodified to read “, but only to the extent shown on survey”,and describe the location of the exception, as it appears onthe survey, including a metes-and-bounds description of

the exception, if appropriate.45

In its analysis, the Fifth Circuit did not address the impact of Endorsement Form T-19.1, whichmodifies the policy with respect to certain losses arising from encroachments and the like. Theendorsement is somewhat limited. What to do?

Practice Pointer Number 14To avoid any conflicts between Endorsement Form T-19.1

and the body of the title policy, follow the Fifth Circuit’s lodestarregarding survey coverage and purchase the endorsement.



45For sample language and related commentary, see Exhibit 6 attached to this outline.


XIV.Post-Closing Practice Pointer:

The Doubletree Lodestar for Scrutinizing Title Policies

In Doubletree, the attorneys handling the purchase accepted a title policy which was significantlydifferent than the one expected under the title commitment (albeit a better policy for the insured).

Practice Pointer Number 15Scrutinize the title policy. Any delta between the title commitment

and the policy gives rise to concern. If the policy appears“too good to be true”, then it is; notify the insurer. Be proactive.

XV.Significance of Doubletree in Choosing an Underwriter,

Negotiating Coverage, and Presenting and Prosecuting a Claim

Lawyers is a member of the Fidelity National Title Group, the nation’s largest group of titlecompanies and title insurance underwriters.46 So are Alamo Title Insurance, Chicago Title InsuranceCompany,47 Commonwealth Land Title Insurance Company, Fidelity National Title InsuranceCompany, and National Title Insurance of New York, Inc., among others. This group controls 40%-50% of the country’s title-insurance market; it is the largest oligopolist in the underwriting oligopoly.

Because oligopolists tend to collude and act in concert, selecting an appropriate underwriter,negotiating proper coverage, and presenting and prosecuting a just claim are becoming moredifficult. There is a very real tendency for underwriters to mimic each other-especially those withinthe same control group. “Sound underwriting practices” is a Dilbert euphemism for “monkey-see-

46Albeit, Lawyers no longer underwrites title insurance policies.

47How about a historical nugget? In 1871, Mrs. O’Leary’s legendary cow allegedly kicked overa lantern, giving rise to The Great Chicago Fire (an allegation vehemently denied by the cow). That big, bad blaze “cooked the books” at the recorder’s office of Cook County, Illinois (wherethe Windy City is situated). Predecessors of Chicago Title saved their records. The followingyear, the state legislature passed the Burnt Records Act, and those saved records became the defacto official records of Cook County, admissable into evidence as though they came from thedeed records. How about another historical nugget? Legend has it that Stewart Title was a like-kind beneficiary of the 1900 Galveston flood, with the Galveston County records being likewisedestroyed.


monkey-do”. Practitioners must be diligent at each phase of procuring insurance and, if necessary,claim proceeds.

As Doubletree demonstrates, the members of the Fidelity National Title Group employ the followinglitigation tactics:

A. telling the Fifth Circuit that Texas survey coverage was a campfirestory, and, if the story was indeed true, then survey coverage insuredonly the pencil-thin perimeter, and the added language to the survey-identified exception either increases the scope of the exception (byconstruing “and” to mean “or”), thus decreasing coverage, or theadded lingo is meaningless;

B. blurring the lines between the Acts-of-the-Insured Exclusion and theKnowledge Exclusion by contending that knowledge is synonymouswith agreeance;48

C. blurring the lines between assumption and “subject to” conveyancesto contort the Acts-of-the-Insured Exclusion;

D. confusing a floodplain-which is not a title defect-with a flowageeasement-which is a title defect-in a disingenuous attempt to escapeliability;

E. leveraging the title insurance industry’s omerta (i.e., code of silence)by asserting that only title-insurance underwriters and claimsrepresentatives can opine regarding title insurance coverage andclaims;

F. arguing that title-insurance coverage expires upon a foreclosurecaused by the very loss of title forming the basis of the pre-foreclosure title-loss claim;49

48Using this logic, a title objection would be meaningless because the insured must haveknowledge of the defect to object to it, and that very knowledge would trigger the application ofthe Acts-of-the-Insured Exclusion.

49Traditional notions of fair play and substantial justice dictate that a murderer cannot collect life-insurance proceeds for the loss of the life of the victim, and, by its own wrongdoing, a title


G. arguing that the No-Loss Exclusion applies to a catastrophic title loss;and

H. arguing that the a title-insurance claim that points out a title defectwith particularity-which claim the underwriter expressly adopted asits basis for filing a declaratory relief action-was insufficient to givenotice of that claim.

In Doubletree, Lawyers issued a six-page denial-in a word, gibberish-then sued its own insured,bled-out the insured until it lost the property to foreclosure, sought sanctions against counsel for theinsured, and-after more than six years of paper-by-the-pound litigation-continues to fight coveragefor a catasrophic title loss.

To the author:

1. the Fidelity National Title Group companies are underwriters of lastresort;

2. their title commitments read like Nigerian emails; and

3. their title policies feel like expired lottery tickets;

if, and only if, no other underwriter is available, one of these underwriters is an appropriate choice.

Fidelity National Title Group’s MottoWe Pay Mowing-Liens Claims!

This behemoth’s paucity of payments reminds the author of a Grateful Dead lyric:

Make good money, five dollars a day!50

insurance company cannot cause a foreclosure, then claim that the insured no longer has aninsurable title interest. See Spellings v. Lawyers Title Ins. Corp., 644 S.W.2d 804, 807(Tex.App.–Corpus Christi 1982, writ ref’d n.r.e.).

50Grateful Dead, Cumberland Blues.


Using round numbers, as estimated by the author, Fidelity National Title Group-the underwritingindustry’s 800-pound gorilla-pays its claims-five dollars a day. It is akin to Blue Cross Blue Shieldpaying for aspirin to cure a headache, but refusing to pay for life-saving surgery.

Practice Pointer Number 16Expect multiple-year, scorched-earth, paper-by-the-pound,

form-over-substance, and procedure-over-merits litigation tacticsfrom Alamo Title Insurance, Chicago Title Insurance Company,

Commonwealth Land Title Insurance Company,Fidelity National Title Insurance Company, and

National Title Insurance of New York, Inc.

Sitting at the closing table, giving no due regard to the designation of your client’s underwriter,perhaps one should consider the astute observation of the poker-playing protagonist in Rounders:

If you can’t spot the suckerin your first half hour

at the table, thenyou are the sucker.


Whether representing a buyer, a seller, or a lender,exercise great care when choosing an underwriter,and extend that level of care to the negotiation of

coverage and the presentment and prosecution of a claim.

XVI.A Hypothetical Pickle

You are an equity partner at a tall-building, white-shoes law firm, charging boocoo bucks just to pickup the phone. You are living the dream!

In 2015, you close a $20,000,000.00 commercial real-estate deal for an institutional buyer:

A. using a deed that:

1. has no rules of construction for the seemingly-magicalphrase “subject to”; and


2. designates the warranty exceptions as “PermittedExceptions to Conveyance and Warranty”;

B. allowing the survey-identified exceptions in the vesting deed and thesurvey-coverage title-insurance policy to read “shown on survey”; and

C. giving no due regard to the designation of your client’s underwriter.

A year later, your client suffers a catastrophic survey-error title loss.

Litigation ensues for many years, and your client spends over $1,000,000.00 in attorney’s fees andrelated expenses.

Ultimately, the court prefers Skinny Elvis, and follows Duncan, holding that “subject to” issynonymous with assumption, particularly when your client granted “permission” for the title defect. Also, the court finds that the “shown on survey” lingo is meaningless, a reasonable constructionunder Doubletree. Consequently, according to the court, your client agreed to the defect, regardlessof its depiction on the survey, and the Acts of the Insured Exclusion applies, as does the survey-identified exception.

Your client has no coverage, and you wait for the other shoe to drop.

In the eyes of the client:

i. the lawyer negotiating and documenting the insured real-estatetransaction and negotiating its title-insurance coverage and is theunderwriter’s underwriter; and

ii. the lawyer’s malpractice-insurance policy covers any title-insurancecoverage gaps.

XVII.An Existential Observation Regarding Doubletree

If the Fifth Circuit climbed a mountain overlooking Shangri-La, seeking guidance from a proverbialwise man, and queried about the nature of title insurance, the guru might observe:

A title insurance policy isa receipt for a premium paid

and a disclaimer of all liability.


This saying is a decades-old joke among Dallas real estate lawyers. The citation is being omittedin accordance with the Bob Hope Rule of Citation (a/k/a The Rule of Evaporating Attribution).

As Bob Hope explained the eponymous rule, if he stole a joke from Red Skelton, the first time, Bobwould start the joke by noting “As Red Skelton once said....” The second time, Bob would observe“As someone once said....” The third time, Bob would smile “As I always say....”

The author first heard the title-policy joke sometime around 1984, when Jim Wallenstein, an adjunctprofessor at SMU School of Law (now SMU Dedman School of Law), told the witticism to his RealEstate Transactions class, where the author was Jim’s star pupil (according to the author, not Jim). But the author has told the joke often enough to claim it as his own. And Jim vaguely remembersit being told to him by a long-forgotten senior lawyer early in his legal career. The longer the author practices law, the funnier he finds this joke.

If one reads a title policy cover-to-cover, this expression rings true: the Insuring Provision is veryshort, and the proverbial fine print is very long. And if one reads case after case on title insurancelaw, the most common denominator seems to be the title insurance company (almost) always wins. Indeed, when an appellate court finds coverage, it’s news; when it doesn’t, it’s not. Thisphenomenon reminds the author of another joke:

When the preacher runs awaywith the choir director’s wife,

it’s news. When he doesn’t, it’s not.51

What if the Fifth Circuit asked a Texas appellate court instead of a swami? One such court declared:

Unquestionably, the principal purpose of a policy of title insurance is to insure andguarantee good title. The very name of such insurance indicates its purpose. Apurchaser of such insurance seeks to avoid the necessity and responsibility ofchecking, examining and analyzing complex public records to determine thecondition of title to land, to be assured of the existence of such good title and to be indemnified against loss through defects in title.52

51Bob Hope Rule of Citation (a/k/a The Rule of Evaporating Attribution).

52San Jacinto Title Guar. Co. v. Lemmon, 417 S.W.2d 429, 432 (Tex.Civ.App.–Eastland 1967,no writ) (a case cited in Doubletree at 859).


The issue before that appellate court was coverage for a water line easement that traversed theproperty (being an unscheduled defect). The court held that the defect was covered, reasoning:

To hold otherwise would, in effect, require [the insureds], who have purchased titleinsurance, to be their own insurer in so far as their title to the land, in the respect hereunder consideration, is concerned. Such a result would not be in keeping with theprincipal purpose of the policy....53

In other words, title insurance is not self-insurance.54

As mandated by the Erie doctrine,55 in Doubletree, the Fifth Circuit, sitting in diversity, skipped thehigh-altitude sojourn, and applied Texas law.56 Subject to further proceedings on other coverageissues, the appellate court found title-insurance coverage. This is news. Even more importantly, theFifth Circuit peppered its opinion with practice pointers, giving rise to a lodestar for maximizingtitle-insurance coverage. This is even better news.

J. Edwin Martin flies solo in Dallas, Texas. He aspires to become the world’s first celebrity title-insurance litigator, the acoutrements of which would include:

I. an eponymous line of courtroom shoes;

II. a motley entourage of law clerks, jury consultants, local counsel,paralegals, and secretaries (but no drug rehab, Kardashians, orreality-television shows); and

III. the leading role of David St. Defeasance in a Rob Reinermockumentary entitled “This Is Title Trap” (admittedly, a cleanerversion of the working title).

He may be reached at [email protected].

53Id. (emphasis added).

54Id.

55Erie R.R. Co. v. Tompkins.

56See, generally, Doubletree.


Exhibit 1

Statement of the Facts57

A.Doubletree Ranch

1. Decades ago, a family owned a dairy farm spanning more than 600 acres. Over time,the family sold various and sundry parcels of land. The final “puzzle piece” of theold dairy farm (being a 36.379-acre tract of land in Highland Village, DentonCounty, Texas) featured a roadway entrance which had old-growth trees on each sideof the road, forming a natural canopy, and giving rise to the name “DoubletreeRanch”.58

2. Doubletree Ranch served as a special events center for weddings, anniversaries,graduation parties, bar mitzvahs, and the like. The family sold this property toDoubletree for $3,450,000.00.

B.Creation of the Flowage Easement andthe No-Building Zone Encroaching and

Encumbering Doubletree Ranch

1. Doubletree Ranch is encumbered by a flowage easement created by the recordation,in 1956, of a certified copy of a final judgment for eminent domain.59

2. The flowage easement-which is owned by the federal government for flood-controlpurposes-has these key features:

i. a grant to the United States of America of a perpetual right andeasement to overflow, flood, and submerge the entirety of the areaencumbered by the flowage easement; and

57The Appendix accompanies this outline as self-study material for the 24th Annual Robert C.Sneed Texas Land Title Institute, December 4-5, 2014.

58See Exhibits D and I of the Appendix.

59See Exhibit A of the Appendix.


ii. in that portion of the area encumbered by the flowage easement lyingbelow an elevation of 537 feet above sea level (the no-building zone),a prohibition against:

a. the construction or maintenance of any structuresintended for human habitation; and

b. the erection or construction of any other structure orappurtenance without the written consent of the U.S. government.60

C.Conditions for Survey Coverage Met

1. Doubletree sought so-called survey coverage as a part of its title-insurancecoverage.61 Accordingly, before the closing of Doubletree’s purchase, Lawyers(acting through its agent) sent Schedules A and B of the then-effective titlecommitment to the surveyor.62 Thereafter, the surveyor prepared and submitted thesurvey.63

2. As shown on the survey, the flowage easement appeared to generally run along theeastern and southern boundaries of Doubletree Ranch.64 Because Doubletreeintended to use that portion of the property for landscaping (green space), theflowage easement, as depicted on the survey, did not encroach any of the intendedlocations of the residential buildings, nor otherwise negatively affect the developmentof Doubletree Ranch.65

3. The surveyor’s statement in the survey declares:

60Id.

61See, e.g., Exhibit B of the Appendix.

62See Exhibit C of the Appendix.

63See Exhibit D of the Appendix.

64Id.

65See Exhibit H of the Appendix.


This plat shows the location of all visible easements and rights-of-way and other matters of record of which I have been advised byvirtue of [the title commitment]..., whether or not of record, affectingthe subject property.66 (emphasis added)

4. Lawyers accepted and approved the survey, and, at the closing, Doubletree paid theadditional 15% survey coverage premium.67 Thus, Doubletree met the requirementsfor survey coverage.

D.Doubletree’s Purchase of Doubletree Ranch,

the Survey, and Survey Coverage

1. Doubletree closed its purchase of Doubletree Ranch, intending to develop it as aresidential community.68 In the deed vesting title to Doubletree Ranch in Doubletree,Doubletree took title subject to the flowage easement “shown on survey”.69

2. In connection with the closing, Lawyers and its affiliates received premiums for thebasic owner’s coverage and survey coverage. Further, Doubletree paid for thesurvey.

E.Lawyers’s Issuance of the Title-Insurance Policy

Lawyers issued its title-insurance policy.


67See Exhibits D, E, and F of the Appendix.

68See Exhibits G and H of the Appendix.

69See Exhibit G of the Appendix.


F.Doubletree’s Intended Development of

Doubletree Ranch, as Surveyed

The survey incorrectly showed the flowage easement running along the eastern and southernboundaries of Doubletree Ranch.70 Doubletree designated that portion of the property forlandscaping (green space).71 Thus, as depicted on the survey, the flowage easement did not encroachany of the intended locations of the residential buildings, nor otherwise adversely affect thedevelopment of Doubletree Ranch.72

G.Doubletree’s Partial-Title Loss Caused bythe Failure of the Survey to Properly Show

the Flowage Easement and the No-Building Zone

Doubletree commenced the development of Doubletree Ranch as a senior living residentialcommunity.73 During this process, Doubletree discovered that the survey was grossly inaccurate.74 Most particularly, the survey failed to show that the flowage easement and the no-building zoneencroached upon and encumbered a giant swath of Doubletree Ranch (covering a multitude ofacres).75 That portion of Doubletree Ranch encumbered by the no-building zone included theintended locations of five of the eighteen residential buildings; this area was rendered unusable forresidential development, and, in fact, unusable for any development without the express writtenconsent of the federal government.76


71See Exhibit H of the Appendix.

72Id.

73Id.

74See Exhibits D and I of the Appendix.

75Id.

76See Exhibits A and H of the Appendix.


H.Doubletree’s Notice of the Claim

Doubletree provided Lawyers with notice of its concomitant claim.

I.Lawyers’s Denial of the Claim

Lawyers denied the claim.77

J.Doubletree’s Supplemental Notice of the Claim

Doubletree provided a supplemental notice of its claim to Lawyers.

K.Lawyers’s Unilateral Modification of the Title-Insurance Policy

Lawyers unilaterally re-issued its title-insurance policy, with modifications.78

L.Lawyers’s Suit Against Doubletree

After denying the claim, Lawyers promptly sued Doubletree, its own insured.

M.Doubletree’s Inability to Develop

Doubletree Ranch

Because of the flowage easement and the no-building zone, Doubletree was unable to developDoubletree Ranch as intended. Efforts to proceed with alternative development plans failed as well. Thus, Doubletree was unable to service its debt or further refinance the development of DoubletreeRanch. The floodplain did not adversely affect Doubletree’s development plans; the flowageeasement and its no-building zone did.

77See Exhibit J of the Appendix.

78See Exhibit K of the Appendix.


N.Lawyers’s Payment of the Claim Would Have

Prevented the Foreclosure of Doubletree Ranch

Thirteen months after Doubletree gave notice of its claim to Lawyers, and two months before theforeclosure, Doubletree could have cured the default by paying the lender $52,425.00 (a smallfraction of the claim). Thus, Lawyers’s payment of the claim would have prevented the foreclosurebecause Doubletree would have had ample funds to service the debt while it revamped itsdevelopment plans.

O.Doubletree’s Full-Title Loss Upon

the Foreclosure of Doubletree Ranch

Fifteen months after Doubletree made the title-loss claim, while Lawyers stood by idly, Doubletree’slender foreclosed on Doubletree Ranch. Consequently, Doubletree’s partial-title loss became a full-title loss.


Exhibit 2

Shoehorned Witticisms

In theory, there is no differencebetween theory and practice.

In practice, there is.79

Fidelity National Title Group MottoWe Pay Mowing-Lien Claims!

If you can’t spot the suckerin your first half hour

at the table, thenyou are the sucker.80

A title insurance policy isa receipt for a premium paid

and a disclaimer of all liability.81

Bob Hope Rule of Citation(a/k/a The Rule of Evaporating Attribution)As Bob Hope explained the eponymous rule,

if he stole a joke from Red Skelton,the first time, Bob would start the joke

by noting “As Red Skelton once said....”The second time, Bob would observe

“As someone once said....”The third time, Bob would smile

“As I always say....”

79Yogi Berra (citation unknown).

80Rounders.

81Bob Hope Rule of Citation (a/k/a The Rule of Evaporating Attribution).


When the preacher runs awaywith the choir director’s wife,

it’s news. When he doesn’t, it’s not.82

82Id.


Exhibit 3

Extracted Practice Pointers

Practice Pointer Number 1In the contract of sale, designate a trusted underwriter (if any).

Tilt the choice of forum for a claim dispute by designatinginto or out of diversity of citizenship.

Practice Pointer Number 2Procure a waiver of an undesirable forum from the underwriter.

Practice Pointer Number 3In the contract of sale, designate a trusted surveyor.

Practice Pointer Number 4Disclaim the application of the Acts-of-the-Insured Exclusion

at every opportunity, particularly with regard to “subject to” conveyances.Amplify the phrase “subject to”, akin to the way the “as is, where is”

clause was amplified after the Texas Supreme Court decidedthe Prudential case.83

Practice Pointer Number 5Never84 call the title exceptions “permitted”. Instead, use no descriptor

whatsoever or describe the exceptions as “without warranty”or “with reservation of rights by Grantee”.


In the deed, disclaim any reversion of rights, adopt theAfter-Acquired-Title Doctrine, designate the title exceptions aswarranty exceptions only (rather than exceptions to conveyance

83Prudential Ins. Co. of Am. v. Jefferson Assocs., Ltd., 896 S.W.2d 156, 161 (Tex. 1995).



and warranty), and quitclaim and Mother Hubbardany rights to those exceptions.85

Practice Pointer Number 7To avoid making any warranties or representations

regarding the survey’s accuracy, when representing a seller,include survey matters in the laudry list of matters disclaimed

in the amped-up “as is, where is” clause.

Practice Pointer Number 8To avoid warranting the survey’s accuracy, when representing

a seller, in the deed, do not reference the survey unless eachsurvey-identified exception is modified to read

“regardless of its depiction on the survey”.


To avoid warranting the survey’s accuracy, when representinga buyer, in the deed of trust, do not reference the survey

unless each survey-identified exception is modified to read“regardless of its depiction on the survey”.

Practice Pointer Number 10To buttress the disclaimer of the application of the

Acts-of-the-Insured Exclusion, when representing a buyer,in the deed, reference the survey using the qualifier

“, but only to the extent shown on survey”. This lingo will increasethe scope of the seller’s warranty, and it will add gravitas to

the disclaimer of the application of theActs-of-the-Insured Exclusion.

Caveat to Practice Pointer Number 10When representing a buyer, referencing the survey in the deed

runs the risk of clouding the chain of title (because the survey isan unrecorded document referenced in the buyer’s chain of title).

85For a sample deed, see Exhibit 5 attached to this outline.


Practice Pointer Number 11Scrutinize the survey to ensure it is picture perfect.

Never86 accept an “approximate” survey designation;that word is a giant red flag.

Practice Pointer Number 12If an easement is material to the development or intended use

of the property, then procuring and scrutinizing a meets-and-boundsdescription of that easement-to determine its exact location and magnitude-

is integral to the title-and-survey review.

Practice Pointer Number 13For survey coverage, in addition to modifying the

survey exception, have each survey-identified exceptionmodified to read “, but only to the extent shown on survey”,and describe the location of the exception, as it appears onthe survey, including a metes-and-bounds description of

the exception, if appropriate.87

Practice Pointer Number 14To avoid any conflicts between Endorsement Form T-19.1

and the body of the title policy, follow the Fifth Circuit's lodestarregarding survey coverage and purchase the endorsement.

Practice Pointer Number 15Scrutinize the title policy. Any delta between the title commitment

and the policy gives rise to concern. If the policy appears“too good to be true”, then it is; notify the insurer. Be proactive.

Practice Pointer Number 16Expect multiple-year, scorched-earth, paper-by-the-pound,

form-over-substance, and procedure-over-merits litigation tacticsfrom Alamo Title Insurance, Chicago Title Insurance Company,

Commonwealth Land Title Insurance Company,


87For sample language and related commentary, see Exhibit 6 attached to this outline.


Fidelity National Title Insurance Company, andNational Title Insurance of New York, Inc.


Whether representing a buyer, a seller, or a lender,exercise great care when choosing an underwriter,and extend that level of care to the negotiation of

coverage and the presentment and prosecution of a claim.


Exhibit 4

Sample Language and Commentary for Drafting Awayfrom the Acts-of-the-Insured Exclusion

Using the Doubletree lodestar, in the contract of sale, include the following text in the title-reviewsection:

Nothing contained in this Contract of Sale or any Closing Document will beconstrued to create, suffer, assume, permit, allow, or agree to any title defect unlessBuyer expressly creates the title defect by signing a separate title-exception document(such as a purchase money financing document), or signs a separate express writtenconsent or joinder to a previously-created title-exception document.

Likewise, in the deed, include the following language in reference to the title exceptions:

Nothing contained in this Deed will be construed to create, suffer, assume, permit,allow, or agree to any title defect unless Grantee expressly creates that title defect bysigning a separate title-exception document (such as a purchase money financingdocument), or Grantee signs a separate express written consent or joinder to apreviously-created title-exception document.

By accepting this Deed, Grantee does not agree to become personally liable for anyException to Warranty (because this “subject to” conveyance is distinct from anassumption).

As used in this Deed, the words “subject to” are intended to be words of limitationand qualification (such as “limited by”), not words of contract.

Further, the words “subject to” are not intended to be contractual, are not intendedto create rights that do not otherwise exist, and are not intended to create anyaffirmative rights whatsoever.

By using the phrase “subject to”, Grantor and Grantee are merely expressing thatGrantor has given notice of a potential title defect, which is acknowledged byGrantee; this conveyance does not operate as an acknowledgement of the validity ofany such potential defect.


Regarding third parties, Grantee is free to challenge the subject defect, but Grantordoes not warrant the results of any such challenge, nor any other aspect of theExceptions to Warranty.

Grantor hereby disclaims and disavows any reversion of rights regarding theExceptions to Warranty.

Grantor and Grantee hereby adopt the After-Acquired-Title Doctrine, so that anyrights to the Property which may accrue after the execution of this Deed will vest inGrantee, not Grantor.

The Exceptions to Warranty are warranty exceptions only; they are not exceptionsto conveyance.

Grantor quitclaims to Grantee all of Grantor’s rights, titles, and interests in and to theExceptions to Warranty, to have and to hold, to Grantee and Grantee’s successors andassigns forever. Neither Grantor nor Grantor’s successors or assigns will have,claim, or demand any right, title, or interest in or to the Exceptions to Warranty orany part of them.

Except for the Reservations from Conveyance, this Deed divests Grantor of any andall right, title, and interest in or to the Property (including improvements) whatsoever.

Similar language may be appropriate in other closing documents referencing exceptions.


Exhibit 5

Sample Doubletree Lodestar Deed for Drafting Awayfrom the Acts-of-the-Insured Exclusion

GENERAL WARRANTY DEED

NOTICE OF CONFIDENTIALITY RIGHTS:

IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OR ALL OFTHE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS ANINTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLICRECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER’S LICENSENUMBER.

EFFECTIVE DATE: ____________________

GRANTOR: ________________________________________________________________________________(Dallas County, Texas)

GRANTEE: ________________________________________________________________________________(Dallas County, Texas)

CONSIDERATION:

1. One Thousand and No/100 Dollars ($1,000.00).

2. Other good and valuable consideration.

Grantor hereby acknowledges the receipt and sufficiency of the foregoing.

PROPERTY (Including All Improvements):

See Exhibit A attached to this Deed and incorporated by this reference.


RESERVATIONS FROM CONVEYANCE:

[E.g., a mineral reservation.]

EXCEPTIONS TO WARRANTY:

See Exhibit B attached to this Deed and incorporated by this reference.

CONVEYANCE AND WARRANTY:

Grantor, for the consideration and subject to the Reservations from Conveyance and Exceptions toWarranty, does hereby GRANT, SELL, CONVEY, ASSIGN, and DELIVER to Grantee the Property,together with all and singular the rights and appurtenances thereto, including any right, title, andinterest of Grantor in and to:

A. adjacent streets, alleys, waterways, and rights of way; and

B. authorizations, licenses, permits, possessory rights, and rights of use;

pertaining in any way to the Property (including improvements) or any portion thereof.

To have and to hold the Property, together with all and singular the rights and appurtenances thereto,unto Grantee, its successors and assigns, forever, and Grantor does hereby bind Grantor andGrantor’s heirs and assigns to warrant and forever defend all and singular the Property unto Grantee,its successors and assigns against every person whomsoever lawfully claiming, or to claim, the sameor any part thereof; subject, however, to the Reservations from Conveyance and Exceptions toWarranty set forth in this Deed.

RULES OF CONSTRUCTION:

Nothing contained in this Deed will be construed to create, suffer, assume, permit, allow, or agreeto any title defect unless Grantee expressly creates that title defect by signing a separate title-exception document (such as a purchase money financing document), or Grantee signs a separateexpress written consent or joinder to a previously-created title-exception document.

By accepting this Deed, Grantee does not agree to become personally liable for any Exception toWarranty (because this “subject to” conveyance is distinct from an assumption).

As used in this Deed, the words “subject to” are intended to be words of limitation and qualification(such as “limited by”), not words of contract.


Further, the words “subject to” are not intended to be contractual, are not intended to create rightsthat do not otherwise exist, and are not intended to create any affirmative rights whatsoever.

By using the phrase “subject to”, Grantor and Grantee are merely expressing that Grantor has givennotice of a potential title defect, which is acknowledged by Grantee; this conveyance does notoperate as an acknowledgment of the validity of any such potential defect.

Regarding third parties, Grantee is free to challenge the subject defect, but Grantor does not warrantthe results of any such challenge, nor any other aspect of the Exceptions to Warranty.

Grantor hereby disclaims and disavows any reversion of rights regarding the Exceptions to Warranty.

Grantor and Grantee hereby adopt the After-Acquired-Title Doctrine, so that any rights to theProperty which may accrue after the execution of this Deed will vest in Grantee, not Grantor.

The Exceptions to Warranty are warranty exceptions only; they are not exceptions to conveyance.

FURTHER CONVEYANCE:

Grantor quitclaims to Grantee all of Grantor’s rights, titles, and interests in and to the Exceptionsto Warranty, to have and to hold, to Grantee and Grantee’s successors and assigns forever. NeitherGrantor nor Grantor’s successors or assigns will have, claim, or demand any right, title, or interestin or to the Exceptions to Warranty or any part of them.

Except for the Reservations from Conveyance, this Deed divests Grantor of any and all right, title,and interest in or to the Property (including improvements) whatsoever.

EXECUTED on this ____ day of ____________________, 2014, to be effective as of the EffectiveDate.

GRANTOR:

____________________

By: ________________________________________


STATE OF TEXAS §§

COUNTY OF DALLAS §

BEFORE ME, the undersigned authority, on this day personally appeared____________________, known to me to be the person whose name is subscribed to the foregoinginstrument, and acknowledged to me that he executed the same for the purposes and considerationtherein expressed.

GIVEN UNDER MY HAND AND OFFICIAL SEAL OF OFFICE on this _____ day of____________________, 2014.

Notary Public, State of Texas

Printed Name:

AFTER RECORDING, RETURN TO:

J. EDWIN MARTIN3308 Oak Grove AvenueDallas, Texas 75204(Dallas County, Texas)


Exhibit 6

Sample Language and Commentary for Lodgingan Objection to a Survey-Identified Exception

Suppose one has a title commitment with the following survey-dentified exception:

Flowage easement...recorded..., and shown on survey dated March 22, 2006 by MarkPaine, RPLS #5078.

Using the Doubletree lodestar, one would lodge the following objection:

Purchaser objects to the foregoing exception because the phrase “, and shown onsurvey”-describing the survey-identified exception-is ambiguous. Such languagecould be construed as inconsequential, merely further identifying the exceptionappearing in the recorded instrument, rather than narrowing the exception to the titledefect actually appearing on the survey, which is the very purpose of procuringsurvey coverage. Lawyers Title Ins. Corp. v. Doubletree Partners, LP, 739 F.3d 848, 864-866 (5th Cir. 2014). Therefore, the exception must read:

Flowage easement...recorded..., but only to the extent shown onsurvey, dated March 22, 2006, by Mark Paine, RPLS #5078, runningalong the eastern and southern boundaries of the property.

The same logic applies to a title commitment exception reading “, and shown on survey”; a similarobjection should be lodged.


J. Edwin Martin3308 Oak Grove Avenue

Dallas, Texas 75204Telephone: 214.747.6222

Virtual Office: 469.223.5624Facsimile: 214.747.6232

[email protected]

FIRM PROFILE

The Firm Negotiates, Documents, Closes, Arbitrates, and Litigates Deals, With a Client SpectrumSpanning Multinational Companies to Aspiring Enterprises Smaller Than His Own.

A Remarkable Number of the Firm’s Clients Are Home Grown; That Is, the Firm Represented ThemWhen They Were Young and Impressionable and, Like a Bird Dog, a Boomerang, or a HomingPigeon, They Keep Coming Back.

The Man in the Mirror Is the Sole Member of the Firm. The Only Way to Downsize Is for Him toLose Weight.

NATURE OF PRACTICE

The Firm Represents Emerging Growth Companies, Entrepreneurs, Individuals, Professional Firms,and Real Estate Ventures in Arbitration, Dispute Resolution, Litigation, Mediation, andTransactional Matters Involving:

Ë Real Estate Acquisition, Construction, Development, Disposition,Financing, and Leasing

Ë Business, Corporate, Employment, Financing, Limited LiabilityCompany, Partnership, Tax, Technology, and Trademark

Oftentimes, the Firm Provides Litigation Solutions to Transactional Problems, and TransactionalSolutions to Litigation Problems.

ACADEMICS

Southern Methodist University

School of Law

Juris Doctor (May 1985)

Edwin L. Cox School of Business

Master of Business Administration (May 1985)Passed All Parts of the CPA Exam

The University of Texas at Austin

Bachelor of Business Administration in Finance (May 1981)Graduated Cum Laude in 3 Years

PROFESSIONAL HONORS

Special Recognition Award from the Dallas Bar Association as Chair, Sports and Entertainment LawSection88 (1993)

Special Recognition Award from the Dallas Bar Association as Chair, Entertainment Committee89

(1998)

College of the State Bar of Texas90 (1991-Present)

Fellow,91 College of the State Bar of Texas (2002-Present)

Pro Bono College of the State Bar of Texas (1994, 2002)

Fellow, Texas Bar Foundation92 (2000-Present)

Life Fellow, Texas Bar Foundation (2008-Present)

88The Section of the Year Award

89For Creative Writing

90Honorary Continuing Legal Education Society

91Special Designation for Maintaining Membership for More Than Ten (10) ConsecutiveYears

92Honorary Society Dedicated to Fostering Dignity and Integrity Within the Legal Profession

PROFESSIONAL ACTIVITIES

Cox MBA Alumni Association93

President (1995-1998)Executive Vice President (1994-1995)Vice President of Business Development (1993-1994)Treasurer (1992-1993)

Dallas Bar Association

Chair

Entertainment Committee (1998)Pro Bono Golf Classic (1994)Sports and Entertainment Law Section (1993-1994)Sports Law Committee (1992-1993)

Vice Chair

Entertainment Committee (1997)Pro Bono Golf Classic (1993)Sports Law Committee (1991-1992)

Council Member

Sports and Entertainment Law Section (1993-1994)Ex Officio (1995-Present)

Sections and Discussion Groups

Business Litigation SectionComputer Law SectionConstruction Law SectionLabor and Employment Law SectionMergers and Acquisitions Law SectionReal Estate Lawyers Discussion GroupReal Property SectionSolo and Small Firm SectionSports and Entertainment Law Section

93Formerly Known as SMU MBA Association and Edwin L. Cox School of Business AlumniAssociation, Dallas-Fort Worth Chapter

Committees

Entertainment Committee (1997-2006; 2011-Present)Judiciary Committee (1994-1997, 1999-2000)Pro Bono Golf Tournament Committee (1993-Present)Publications Committee (1996-1997, 1999-2000)Sports Law Committee (1990-1993)Strategic Planning Committee (1993-1995)

Houston Bar Association

Continuing Legal Education Distinguished Faculty Member (2014)

State Bar of Texas

Chair

Entertainment and Sports Law Section (2001-2002)

Secretary

Entertainment and Sports Law Section (2000-2001)

Council Member

Entertainment and Sports Law Section (1997-2000)Ex Officio (2000-Present)

OTHER ACTIVITIES

Mercer Square Condominium Association, Inc.

President (2009-2011)

Board Member (2008-2011)

PROFESSIONAL LICENSES AND CERTIFICATIONS

Admitted to Practice Before the Supreme Court of the United States of America, the United StatesCourt of Appeals for the Fifth Circuit, the United States District Courts for the Northern, Southern,Eastern, and Western Districts of Texas, the Supreme Court of Texas, and All Other Texas StateCourts

Certified in Trademark Law and Practice by the University of Houston Law Center

J. Edwin Martin3308 Oak Grove Avenue

Dallas, Texas 75204Telephone: 214.747.6222

Virtual Office: 469.223.5624Facsimile: 214.747.6232

[email protected]

BIBLIOGRAPHY

The Fifth Circuit’s Lodestarfor Allocating Title and Survey Risksand Maximizing Title-Insurance Coverage24th Annual Robert C. SneedTexas Land Title InstituteDecember 4-5, 2014

The Fifth Circuit’s Lodestarfor Allocating Title and Survey Risksand Maximizing Title-Insurance CoverageDenton County Bar AssociationReal Estate, Probate and Trust Law SectionNovember 19, 2014

The Fifth Circuit’s Lodestarfor Allocating Title and Survey Risksand Maximizing Title-Insurance CoverageDallas Bar AssociationReal Property SectionNovember 10, 2014

The Fifth Circuit’s Lodestarfor Allocating Title and Survey Risksand Maximizing Title-Insurance CoverageHouston Bar AssociationSeptember 26, 2014

The Fifth Circuit’s Lodestarfor Allocating Title and Survey Risksand Maximizing Title-Insurance Coverage,SMU Dedman School of LawReal Estate Transactions ClassSeptember 2, 2014

Following the Fifth Circuit’s Lodestar toMaximize Title-Insurance CoverageDallas Bar Association HeadnotesAugust, 2014

The Fifth Circuit’s Interpretation ofTexas Title-Insurance Survey-Coverage Lawand Its Real-World ImplicationsDallas Bar Association Friday ClinicJune 13, 2014

Doubletree’s Real-World Lessons,Dallas Area Lawyers Real EstateDiscussion GroupApril 9, 2014

Just Lettin’ It Roll: Flying Solo with a ‘Tude,Dallas Bar Association Headnotes,October, 1996

SELF-STUDY MATERIAL

24th ANNUAL ROBERT C. SNEED

TEXAS LAND TITLE INSTITUTE

December 4-5,2014

APPENDIX TO THE FIFTH CIRCUIT'S LODESTAR

FOR ALLOCATING TITLE AND SURVEY RISKS


J. EDWIN MARTIN

State Bar No. 13086200

3308 Oak Grove Avenue

Dallas, Texas 75204

Telephone: (214) 747-6222

Facsimile: (214) 747-6232

Email: [email protected]

ATTORNEY FOR DOUBLETREE PARTNERS, L.P.

Description

Excerpt of Final Judgment Creating

Flowage Easement and its No-Building Zone

Final Lawyers's Commitment Transmittal

Describing Survey Coverage

Excerpts of Lawyers's Fax Transmittal of

Schedule B Easement Descriptions to Surveyor

Survey Approved by Lawyers

for Survey Coverage

Excerpt of Lawyers's Title Examiner's Report

with Handwritten Annotations of Survey Approval

Excerpts of Lawyers' Title Examiner's Report

with Typewritten Annotations of Survey Approval

Excerpts of Doubletree's Vesting Deed

with "Subject to" Language and the

Tailored Flowage Easement Exception

Doubletree Ranch Master Development Plan

Same Surveyor's Post-Closing Survey Showing

a Dramatically Different Location of

the Flowage Easement

Lawyers' Denial of Doubletree's Title Loss Claim

Post-Loss, Post-Claim Title Policy's Schedule B

with the Tailored Flowage Easement Exception

and Cover Letter

Number

B

D

G

H

I

J

K

APPENDIX TO THE FIFTH CIRCUIT'S LODESTAR FOR ALLOCATING TITLE AND

SURVEY RISKS AND MAXIMIZING TITLE-INSURANCE COVERAGE - Page ii

EXHIBIT A OF THE FIFTH CIRCUIT'S LODESTAR



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Case 4:08-cv-00243-ALM Document 123-3 Filed 06/14/11 Page 4 of 7 PagelD #: 2286

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DOUBLETREE Prtefci01102

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OOUBLETREE Prdetn

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112

APP 000008USCA5 2314

112 Of 165

EXHIBIT B OF THE FIFTH CIRCUIT'S LODESTAR



08886122(06692 DBoonreBtitOOB5206i5B91 PB§§ei98

Case 4:08-cv-00243-ALM Document 123-10 Filed 06/14/11 Page 2 of 17 PagelO #: 2368

UflAn)American Title

LandAmwtei Amwtean Till* Company Fort WbtM3380 Long PraMa Road, Sun* 200

RomrMound, TX7S022Phona 972-221.M21 Fax 872-3SM1S1

COMMITMENT TRANSMITTAL

Date: January 3,2006

Criarfth Development Corp.

2380 FM 407

Highland Village, Texas 75077

RE: Order No.: 20120007408eller(8): - Duncan Duvall

Buyor/Borrower(s): Charlth Development Corp.Property Addreas: 310 Highland Village Road, Highland Village, TX 76077

Lender:

On behalf of the Soller(e), pursuant to the terms of your Contract, we ere pleased to deliver a

Commitment for Title Insurance for the referenced transaction.

Copies of any restrictions, easements or other specific matters'deserlbed In Schedule & of theCommitment SI are enclosed D are available upon request.

In the interest of providing you with a more complete title insurance policy, If a qualifying surveyhaa been required by your lender, we will collect the appropriate premium from you (estimatedto be $2496.43,8% ofjthe premium the Seller will pay for your owner policy) and amend yourtitle insurance policy to insure you-against loss because or discrepancies or conflicts In 'boundary lines, encroachments or protrusions, or overlapping of Improvements, excluding fromthe coverage specific matters disclosed by the survey. If you have questions, feel free tocontact me, or the qualified real estate attorney of your choice. If you do not want thiscoverage, please notify me in advance or your closing.

As soon as we receive Instructions from your lender, we.will calculate your closing costs. Theseinstructions are usually received only a short time before closing end sometimes not until the•dual day of dosing. As soon as your closing costs have been calculated, we will notify you oryour real estate Broker of the exact amount you must bring to dosing. The Texas Department-of Insurance requires that these funds be paid to us by Wire Transfer frbm your bank to ours or

by Cashier's Cheek.-.

• Our Wiring Instructions are attached.

• Cashier's checks should be payable to LandAmerfca American Title Fort Worth

I will be your closer and look forward to seeing you at dosing. Thank you for allowing us to-serve your title Insurance needs. If you have any questions, please feel free to call me.

2jCathy Mqj {_cmcmullenOlandam.com

<MtrNo.»12M0740

ComiH»m»ntloB«y»r PigaiefZ

DOUBLETREE Prdctn

0054S_ ..„

APP 000100USCAS241S

118 118 of 165

EXHIBIT C OF THE FIFTH CIRCUIT'S LODESTAR



(QEEBBe:U24QESEE2 D&munraafitt'.QDDEESESIESESSBL W&gfB.ISD DtettefffltatT.


LondAmerlcaAmerican Title

r saSotwriLandAmartea Mtwrtean TWe Company Fort Worth

3300 Long PraMo Road, Suite 200Flowar Mound, 7X76032

Phora 972-221-3521 Fax 072-36S4181

FAX TRANSMITTAL

Date: February 9,2008

To: Morgan

Firm Name: O&AConsultanto

Fax* 972-438-9716

RE:OrderNo.: 2012000740 , „ _«Buyer/Borrower(8): Charith Development Corp., a Texas Corporation

6e!ler(s)' Murry Duncan DuVall and wife, Carmen Louise DuVallProperty Address: 310 Highland Village Road. Highland Village, TX 75077

In connection with the referenced transaction, we enclose the following:

(S 8cneduleA4B

Comments: Closing date has not been set yet.

Denlse [email protected]

If(h0 naderofthla message Is not the totemtod^KW^herebyn&tledthatanypubllcBttonorm^pmmn«d\lfyou rw»«* this communication In amr, pteaae notify us by tetepnwie

Immadtately.

OrtaiNo. 3012000740

FwTnmmlUalPagi 1 of I

R»v. 07/03

120

OF 0740 0826

USCA5 2041

120 Of 1

Case4:08-cv-00243-ALM Document 117-7 Filed 06/13/11 Page 75 of 100 PagelD#: 2018

COMMITMENT FOR TITLE INSURANCE

8CHEOULEB

. EXCEPTIONS FROM COVERAGE

In addition to tha Exolualona and CondlHona and Stipulations, your Policy will not cover low, costs,attorney*1 teas, and expenses resulting ftom

1.

2.

3.

4.

5.

e.

7.

a.

9.

b.

c.

d.

Item 1. Schedule B Is hereby deleted In Its entirety.

Any discrepancies, conflicts, or shortages In area or boundary lines, or any encroachments or

protrusions, or any overlapping or Improvements.

Homesteador community property or survivorship rights, If any, of any spouse of any Insured.(Applies to tha Owner Policy only).

Any titles or rights asserted by anyone. Including, but not limited to, persons, the public,corporations, governments or other entitles,

a. to tldetands, or lands comprising the shores or beds of navigable or perennial rivers andstreams, lakes, bays, gulfs or oceans, or

to lands beyond the line of harbor or bulkhead lines as established or changed by anygovernment, or

to fllled-ln lends, or artificial Mends, or

to statutory water rights, Including riparian rights, or

e. to the area extending from the line of mean low tide to the line of vegetation, or the rightoof access to that area or easement along end across that area.

(Applies to the Owner Policy only.)

Standby fees, taxes and assessments by any taxing authority for the year2006, end subsequentyears; and subsequent taxes and assessments by any taxing authority for prior years due toChangs In land usage or ownership, but not those taxes or assessments for prior years becauseof an exemption granted to a previous owner of the property under Section 11.13, Tern TaxCoda, or because of Improvements not assessed for a previous tax year. (If Texas Short FormResidential Mortgagee Policy (T-2R) Is Issued, that policy will substitute "which become due andpayable subsequent to Date of Policy" In Hsu of "for the year 2008, and subsequent years.")

Tha terms and conditions of the documents creating your Interest In tha land.

Materials furnished or labor performed In connection with plenned cwetruoHon belbre slgrtfnganddelfverlna the Men document describsd In Schedule A, If the land Is part of the homestead oftheowner (Applies to tha Mortgagee Title Policy Binder on Interim Construction loan only, and maybe deleted If satisfactory evidence Is furnished to us before a binder fa Iseued.)

Liens and leases that affect the title to the land, but that are auboirdlnate to the lien of the Insuredmortgage. (Appllea to Mortgagee PoHcy (T-2) only.)

Uwytra Tlllt Iiwumiim CoraertUonFomiT-7: CommttmtittferTWilMUfine*

Sch«luliB.Pt9*1

OF 0740 0629

121USCA5 2045

121 Of

(QmE:2EMG0rEffi2 OBmnrmBTtt:


•Conllnuillon oTScrwdult Br

G.P. No, 2012000740

10. The following matters and all terms or tha documents creating or offering evidence of the matter*(We) must Insert matters or delate this exception.}:

a. Rlghte of parties In possession. (Owner's Title Policy only)

b. Rights or tenants In possession under unrecorded lessee or rental agreements.

e. Eaeements, or claims of eaecmenta, which are not recorded in the publicrecords. (Owner TKIe Policy only)

d. /saaement executed by L. P. Duvall and Clara Duvall, to Canton County ElsctrlcJ Cooperative, Inc., dated May 30,1946, Died October 24,1963, recorded In/under

Voluma 402, page 377 of the Real Proparty Records of Denton County, Texas.

a. Flowage easement awarded to The United 8tatea of Amerlea In Condemnationj Proceedings In U.S. District Court for the Eastern District of Texas, Shemten/ Division, under Cauae No. 692, by Final Judgment dated November 18,1986, a

certified copy of whloh has been filed on January 10,1868, recorded In Volume

418, page 372, Real Property Records, Oenton County, Texas.

f. Êasement executed by Lewis Gibson Duvall and Robert Duncan Duvall, to The

/ Southwestern States Telephone Company, dated November 10, 1966, filedFebruary 13,1967, recorded In/under Volume <47, Page 71 of the Real PropertyRecords of Denton County, Texaa,

g. / Eaaement executed by Lewis G. Duvall, to City of Highland Village, dated Augusts 3,1978, fllod October 6,1978, recorded In/under Voluma 806, Paga 666 of the Real

Proparty Records or Denton County, Texas.

h. /Easement set out In Deed from Murray Duncan Duvall to Murray Duncan Duvall,>/ Trustee dated August 27,1991, recorded In Volume 3084, paga 209, Real Property

Records, Denton County, Texaa.

I. /Easement executed by Murray Duncan Duvall, to City of Highland Vlllaga, dated

/February 2, 1993, fllad March 24, 1993, recorded In/under Clerk's File No. 93-R0016286 of the Real Property Records of Denton County, Texas.

J. /Easement executed by Duncan Duvall, to Upper Trinity Regional Water Dlstrlot,«/dited March 10,1998, filed March 18,1998, recorded In/under Volume 4062, page

1237 of the Real Property Records of Denton County, Texas.

Êasement executed by Duncan Duvall, to City of Highland Village, datedNovember 30, 2000, filed January 23,2001, recorded In/under Volume 4769, page

80 of the Real Property Records of Denton County, Texaa.

Easement executed by Duncan Duvall, to City of Highland Village, dated July 6,2001, Wed September 11, 2001, recorded In/under Volume 4919, page 333 of theReal Property Records of Denton County, Texaa.

Uwy«r» Title Imimmm CerporaUanPoonT-7: Commlbnutt for Till* Iniurincv

OF 0740 0630

122USCAS2046

122 of Id5

EXHIBIT D OF THE FIFTH CIRCUIT'S LODESTAR




124

USCA52I25

• I124 Of 165

EXHIBIT E OF THE FIFTH CIRCUIT'S LODESTAR



Case4:08-cv-00243-ALM Document 117-7 Filed 06/13/11 Page 97 of 100PagelD#: 2040

QPN0.2012030M0

Your Oder No.

EXAMINER'S REPORT

Certification Osto: March 9.2008 Preparation Date: Mereh 28,2006

Examiner: Carol Cates. bteVeca Abstractor Carol Catee

Closing Office: LandAmerlea Amerieen TMe Fort Worth Cloear Cathy McMuDen

Ugal:

Being a tract of land situated In theVtfKPeerce Sup/By. Abstract No. 1018gHIHU p trcJM VI NHIW ejllinitWM 111 mi« ■•. • • » •»•»■-» WTT"*» "

Pearee Survey, Abstract No. lOIOenton CounlyfTexas. and being ijjn «-■JT""'^;- _acre trad of land described by deed to Murrey Duncan Dwell ea recorded »^\*W'18'*"File No 95.R000866 of the Real Property Records of Denton County, Texas, and being meremainder of a called 28.182 acre tract of land described by deed to Murray Duncan Duvan asrecord*I under County ClenYs Fie No. 96^R00O854 of the Real Property Records of DentonCounty. Taxes, and being more particularly described as follows:

BEGINNING at a 1/2 Inch Iron rod set at the northeast comer of said 24.8 acre tract and mHighland VUage Road;

SCorps of Engineers Tract:

THENCE with tha United Stale* of America Corps of Engineers Tract, the following coursesand distances:

South 72 degrees 34 minutes 63 seconds Wast, a distance of 83.76 feat to a 1/2 Inch Iron rodfound for comer;

North 89 dagraea 68 minutes 28 seconds Wast, a distance of 82.11 feel to a 1« Inch Iron rodfound for comer;

South 49 degrees 88 minutes 38 eeeonda East, a distance of 87.8B feet to a 1/2 Inch Iron rodfound for comer;

South 42 degrees 03 minutes 68 seconds East, a distance, of 104.88 faat to a 1* Inch Iron rodfound for comer;

South 64 degrees 46 minutes 61 seconds East, a distance of 88.06 feet to • 10 Inch Iron rodfound for comer;

South 86 degrees 46 minutes 12 seconds Cast, a dlslenee of 108.20 feat to a 1/2 Inch Iron rodfound for corner;

South 31 degrees 31 minutes 10 ssconds West, a distance of 100.12 feet to a 1ft Inch Iron rodfound for comer;

South 38 degrees 26 minutes 40 seconds East, a distance of 143.3 feet to a 1« Inch Iron rodfound for comer;

South «0 degreea 08 minutes 08 seconds West, e distance ef 204.74 feet to a W Inch Iron redfound for comer;

South 24 degrees 37 minutes 55 seconds Wesi. e distance of 163.81 feat to a 1/2 Inch Iron todfound for corner; '

South 68 degrees 48 minutes 01 seconds West, a distance of 208.62 feet to a fence post foundfor corner.

Paw 1 ol«

OP 0740 01*3

USCAS 2067

126 126 Of 18

\X2L4SBBSZ2. Q!bmiinraitt:QDDQEQ29aDBaES9BL DXattePFHtetl:W/WVftRMZ


OF NO. 2012000740YourOrdwNo.

THENCE wHh lha easterly monumanted Una of hU Montetolr Estates, the following couraet

and distances;

North 3S degrees 23 minute* 25 tacondt Wb»I, a distance of 407.08 feat to a 1/2 Inch iron rod•el for corner

North 01 degrees 43 minutes to teconda East, a distance of 740.00 feet to a 1/2 ineh Iron rod•at for corner;

North 65 degree* 30 minutes 00 saeonda West, a dittanoe of 204.81 feet to a 1/2 Ineh Iron rod

aatforcomar;

North 01 degraea 18 minutes 16 second* iast, a distance of 722.03 feel to a 1/2 Inch Iron rodml for corner;

North 43 dagraaa 33 minute* 20 eeconds East, a distance or 633.08 (eat to a 1/2 Inch Iron rodaet In said Highland Village Road;

THENCE South 49 degrees 23 minutes 46 seconds East, with said Highland Village Road, adistance of 232.88 feat to a 1/2 Inch Iron rod set for comer,

THENCE South 88 dagraaa 48 minutes 10 seconds East, continuing wllheaW Highland VlflageRoad, a distance of 381.88 feet to the Point of Beginning end eontaWng 38.284 acres of land,more or leas, and being subject to any and all easements that may afreet.

Title Vested In:

Murray OuncanOuvall

Estate or Interest Covered by this report; Fee Simple

Restriction*:

None found, ao Schedule B, Item 1 wfll be delated,

The following restrictive covenants of record Itemteed below (We must either bwert specKIcrecording data or delete this exception):

Survey:

No request he* been received tor survey review.

□ 8urvey dated: by

Subordinate Liana and Leases:

Exceotlona:1. Rights of parties m possession. (Ownefa Title Policy only)

2. Rights of tonanta In possession under unrecorded leases or rental agreements.

3 Eaaamenla, or claims of easements, which ere not recorded In the puWlo records.(Owner Title Policy only)

4 Easement executed by L. P. Dwell end Clara Ouval, to Oanton County ElectrloSSSSTm! dated May 30.1948. Wed October 24.1983, recorded In/underVolume 402. page 377 of the Real Properly Records of Denton County, Texaa.

5. Flowage easement awarded to The United States of America In Condemnation- ProeeedlnB* In U.S. District Court for the Eastern District of Texee, ShermanS DStotoriTd.rC.use No. 692. by Final Judgment dated N=b« 18J96S. a

certified copy of which has been Ned on Januery 10.1998, recorded In Volume 418.page 372. Real Property Records, Denton County, Texaa.

6. Easement executed by Lewis Gibson Ouvsll and Robert Duncan Duvall, to The

PignloMRW.MVM

OF 0740 0124

127

USCAS2068

127 of 166

(BtEBSB'.TBiAOSSSBZ. UBnaunwM.QBMEnBXEBSL FRqpBillZB Dtttttelffltafl'.

7,


-t OF No. 2012000740Your Order No.

Southweatam Slates Telephone Company, dated November 10, 1868, madFebruary 13, 18B7, recorded In/under Volume 647, Page 71 or the Real PropertyRecords of Demon county, Texas.

SEasement executed by Lewis Q. Ouvefl, to City of Highland Village, dated August 3,1878, Wed October 6,1876, recorded In/under Volume 80S, Page 666 of Ihe RealProperty Records of Denton County, Toms,

q Easement set out In Deed from Murray Dunean Duvall to Murray Duncan Duvall.b Trustee dated Auguat 27.1881. recorded In Volume 3064, page 209, Real Property

Records, Oenton County, Texas.

S Easement executed by Murrey Duncan DuvaU, to City of Highland Village, datedFebruary 2, 1883, (Bed Mereh 24, 1883, recorded InAinder Cterk'a File No. 83-R0016256 of the Reel Property Records of Denton County, Texas.

5 Easement executed by Duncan Duvall, lo Upper Trinlly Regional Water District,dated Mereh 10,1898, Died March 18,1888, recorded InAinder Volume 4082, page1237 of Ihe Real Property Records of Oenton County, Texas.

11. «_ Easement executed by Duncan Duvall. lo City ol Highland Village, dated November5 30, 2000, filed January 23, 2001, recorded InAinder Volume 4789, page 60 of the

Real Property Records of Denten County, Texas.

12.r Eeiement executed by Ounoan Ouval, to City of Highland Village, dated July 6.5 2001. filed September 11.2001. recorded InAinder Volume 4918. page 333 of the

Real Property Records of Denton County, Taxes.

10.

1. Oeed of Trust executed by Murray Duncan DuveB to Dougtae J. Krolaa, Trustee,dated Februery 27.2004. Wed Mereh 8,2004, recorded InAinder Clerk's FBe No.2004-28839 oflho Reel Properly Records of Denton County. Texaa. securing BankOne, NA In the payment ofono note In Ihe principal aum of Two HundredThousand end 00/100 <W00.000.00), due end payable end bearing Werestes(herein provided: end all the terms, conditions and atlpulatlona contained thereto.Including, but not trolled to, any addlltonsl Indebtedness, IT any, aaeurad by aaidInstrument

2. Company requires evidence of Ihe martial status of Murray Duncan Duvall as ofOaeember12.1884. If Murray Duncan Duve»«..merrled.ndl. now******married to a different spouse, Company requires sufficient Information to *««"*»Ihe atatua of any outstanding community Interest for purposes of the jobuJer ofadditional partJM, If ntcessaiv. Company requires the Joinder of epouee, If any. Inany conveyance of homestead properly.

3. Possible Judgments end/or tax liens egslnst record owner(8): None found.

WhM n'ameo eoerchod. owner(» end buyer(s); buyer's names,J"***1"beneficiaries of eny disclosed trust, must be seershed for federal Judgment*

2. InvosUgete any change In marital status of ownsr(s).

3 If an acceptable "existing survey" has been provided, obtain appropriate affidavit fromowner betoraTamendment of Schedule B, Paragraph 2, exception to "Area endBoundaries."

^^Mted'by virtue of Warranty Deed dated December 12,1884, filed January}iKSStSta^ 88-R000856of theReal Property Record.ofOenton County, Texas.

# Property eddress: 310 Highland Village Road

. Title evidence: 799592-0

0XfIHJMrl MjMflPigtXM

OF074801M

128

USCA52069

128 Of 105

EXHIBIT F OF THE FIFTH CIRCUIT'S LODESTAR




GF No. 3012000740Your Order No.

EXAMINER'S REPORT

Certification Date: March 21,2006 Preparation Date: March 30,2006

Examiner: Carol Cates, btd/cca. btd/surv rev/oca Abstractor: Carol Cates

Closing Office: LandAmerlca American Title Fort Worth Closer: Cathy McMullen

Legal:

Being all foat certain lot, tractor parcel of tend sltualad In the William P Pearee Survey,Abstract Number 1016 and the Francis Pearee Survey, Abstract Number 1016, City of HighlandVillage. Oenton County, Texas, and being part of that certain called 108.66 acre tract of landdescribed as First Tract and part of that certain called 20 acre tract of land described asSecond Tract In deed from J R Parker and wife Oleta Parker to L P. Duvall recorded In Volume311, Page 616 of the Deed Records of Oenton County, Texas and being part of that certaincalled 18.46 acre tract of land described In deed from Clara Ann Duvall. at al, to Lewis GibsonDuvall recorded In Volume 645, Page 476 of the Deed Records of Denton County, Texas, andbeing part at that certain called 69 869 acre tract of land described In deed doted August 4,1971; from L P Duvoll and wife. Clara Duvall to Lewis a Duvall recorded m Volume 626, Page488 of the Deed Records of Denton County, Texas, and being part of that certain called 29.190acre tract of land described In deed dated September 30,1986, from Lewts Gibson Duvall toMurray Duncan Duvall recorded In Volume 1780, Page 164 of the Real Property Records ofDenton County, Texas, and being ell of that certain called 9.000 acre tract at land described Indeed dated December 11,198S from Robert D. Duvall to Murray Duncan Duvall.recorded InVolume 1780, Page 168 of the Real Property Records of Denton County, Texas, and beingmore particularly described as follows:

BEGINNING at a "PK" NaU set In Highland Village Road, a public roadway, at the northeastcorner of said 20 acre Second Tract, the northeast corner of said 18.46 acre tract and thenortheast comer of said 9.000 acre tract, being on the south Una of Lakewood Estates, anaddition to the City of Highland VUlage according to the plot thereat recorded In Volume 2, Page177 (know held In Cabinet A, Page 88) of the Plat Records of Denton County. Texas, and beingen Inner ell comer In the west line of that certain called 83.76 aore tract of land described Indeed from Annie Gilbert, at al, to George E. Chapman and Henry C. Kersey recorded In Volume459. Page 64 of the Deed Records of Denton County. Texas;

THENCE S 02t20'14l> W, along the common line between said 20 acre Second tract and said83.78 acre Chapman tract, passing at 41 feet the northwest corner of Lot 2, Block A ofEdgewood Estates, an addition to the City of Highland Village according to the plat thereofrecorded In Volume 7. Page 11 of the Plat Records of Denton County, Texas, contlnutog alongKTwest I ne thereof, pass* 41.9 feet a 1fl- Wcapped rebar setfor wRneesoritheproposed south Una of Highland Village Road, pass 473.4 (set the southeast corner of said9.000 acre tract and the northeast corner of said 29.190 acre traot. pass «* «78.7 feetJhesouthwest comer of Lot 12, Block A and the northwest comer of Block B of said EdgewoodEsteteVand the northwest comer of that certain called 4.685 acre tract <>'tan£descrtoed Indeed to 5. Russell Trett. III. et ux, recorded In Volume 1726, Page 281 of the *£PgfgLRecords of Denton County, Texas, continuing along thewest line thereof, pass at 900^feetthesoutheast corner of, said 18.48 acre tract and the northeast corner of said 69.859âcre. trart\ttotal distance of 1298.43 feet a 1/2' rebarfound at an angle point In the north line of that certain

Ptga I efe

GF 0740 0132

USCA5207I

130 130 of 165


fOF No. 2012000740

Your Order No.

The survey described below has been reviewed and approved for amendment of Schedule B,Item 2 of an owner or mortgagee policy.

□ Survey dated: March 22,2008 by Mark Palne, R.P.L.8. No. 5078

Subordinate Liens and Leases:

EXC*PtlOnRlghte of parties m possession. (Owner's Tide PoUcy only)

2.

3.

4.

6.

7.

8.

9.

10.

Rights of tenants In possession under unrecorded leases or rental agreemente.

Easements, or claims of easements, which are not recorded In the public records.(Owner Title Policy only)

Easement executed by L. P. Duvall and Clara Duvall, to Denton County BeetotoCooperative, Inc., dated May 30.1945, Hied October 24, 1963, recorded In/underVolurnViol. page 377 of the Real Property Records of Denton County. Texas.

Flowage easement awarded to The United States of America In CondemnationProceedings In U.S. District Court for the Eastern District of Texas, ShermanS£Tder Cause No. 692, by Final lament dated November 18 1856 acertified copy of which has been filed on January 10,1956, recorded In Volume 418mot 3727 Real Property Records, Denton County, Texas, and shown on surveydated March 22,2008 by Mark Palne. RPLS #6078.

Easement executed by Lewis Gibson Duvall and RobertiDuncan1 Duvall, to Thesouthwestern States Telephone Company, dated November 10, 18BB, meat$%£isTiW,recorded In/under Volume 647, Page 71 of the Real PropertyRecords of Denton County, Texas.

Easement executed by Lewis O. Duvall, to City of Highland Village, dated August 3,§78. fited October 5, 1876, recorded In/under Volume 806. Page 666jofthe RealProperty Records of Denton County, Texas, and shown on survey dated March 22.2008 byW Palne, RPLS #6078.

Easement set out m Deed from Murray Duncan Duvall to Murray Duncan Duvall,Tmstee dated August 27,1991, recorded In Volume 3084, page 209 Real PropertyRecords Denton County, Texas, and shown on survey dated March 22, 2006 byMark Pal'ne. RPLS #6078.

BHMK

, RPLS #6078.

Eiamtatr* Reportp«B«4of6

R«v. 08/01

OF 0740 0138

131USCAS2074

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FftegpBiSE ate©FRItotJ:M2ttH[B22

Case 4:08-cv-00243-ALM Document 117-8 Filed 06/13/11 Page 5 of 117 PagelD#: 2048

C cGF No. 2012000740

YourOrdarNo.

11.

12.

13.

Easement executed by Duncan Duvall, to City of Highland Village, dated November30, 2000, filed January 23, 2001, recorded In/under Volume 4769, page 60 of theReal Property Records of Denton County, Texas, and shown on survey dated March22,2006 by Mark Palne, RPL8 #5078.

Easement executed by Duncan Duvall, to City of Highland Village, dated July 6,2001. filed September 11, 2001, recorded In/under Volume 4919, page 333 of theReal Property Records of Denton County, Texas, and shown on survey dated March22,2006 by Mark Palne, RPL8#6078.

Fences off property lines, deck over property line as shown on survey by MarkPalne, R.P.L.S. No. 6078, dated March 22,2006.

Requirement^ rf ^ ^^ Duva|| te Qo T ^

dated February 27.2004, filed March 8,2004, recorded In/under Clerk'e File No.

2004*28639 of the Real Property Records of Denton County, Texas, securing BankOne, NA In the payment of one note In the principal sum of Two HundredThousand and 00/100 ($200,000.00). due and payable and bearing Interesl; astherein provided; and all the terms, conditions and stipulations contained thereto,Including, but not limited to. eny addlttonal Indebtedness, If eny, secured by saidInstrument.

2 Company requires evidence of the marital statue of Murray Duncan Duyall as ofDecember 12,1994. If Murray Duncan Duvall was married and Is now sngte, or was

married to a different spouse. Company requires sufflotent !"JS""»«?" *° 2£?5the status of any outstanding community Interest for purposes of the Jotader ofaddlttonal parties. If necessary. Company requires the Joinder of spouse. If any, Inany conveyance of homestead property.

3. Possible Judgments and/or tax Hens against record owners): None found.

TtaJXrames searched, owners) and buyers); buyersnm Inctâlbeneflctaries of any disclosed trust, must be searched for federal Judgments.

2. Investigate any ohange In marital status of owner{8).

3 If an acceptable "existing survey" has been provided, obtain appropriate affidavit fromowner before amendment of Schedule B, Paragraph 2, exception to "Area andBoundaries."

Explanatory Notes: December 12,1994, filed January 4,

# 1995?ScSdedwSStStork'sÎte No. 96-R000866 of the Real Property Records ofDenton County. Texas.

EttmlMttRsportPagt*«f8

OF 0740 0136

132USCA52075

132 Of 1615

EXHIBIT G OF THE FIFTH CIRCUIT'S LODESTAR



Case4:08-cv-00243-ALM Document 117-8 Filed 06/13/11 Page12of 117 PagelD#: 2055

c

NOTICE OF CONFD)BNTIALITy BIGHTS: H you ore a natural person, you mayremovo or strike nay of tho following from (hit instrument before it is filed for record Inthe public recordi: Your aocial security number or your driver'* license number.

Grantee's falling Address:

DOUBLBTCBB PARTMBRS, L.P.

2300 HIGHLAND VILLAGE RD., SUITB 310HIGHLAND VILLAGE TX 75077

WARRANTY DEED

(With Vendor's Lien Retained by Grantor)

STATE OP TBXAS

COUNTY OF DBNTON

That DUNCAN DWALL (1/k/a as MURRAY DUNCAN DUVALL), as his separate

and other aood and valuable consideration to Orantor paid by DOUBLETREE

adjacent aMt, alleyji, or righwf-way acollectively refened to as the "Property").

"A" attached hereto and incorporated

Deed and the conveyance hereinabove set forth is executed by Orantor andSSSTS A attmdescribed in FMMT "B", *-W »-* "J

sssaessS2£1n w uTdor and that may be produced from tUe Property by vliatover metod

or to bo constructed on the Property. r«to I.orifrrf ftir»-»TflrtftV* '"'-*'•*'"**

134

OF 0740 0296

USCAS2082

134 Of 16B

- mvmvmtm


r

EXHIBIT B

PERMITTED EXCEPTIONS

The following items are Permitted Exceptions to the extent they are valid and subsisting

and affect the Property:

1. Standby fees, taxes and assessments by any taxing authority for the year 2006,and subsequent years-, and subsequent taxes and assessments by an taxingauthority for prior yean due to ohange in land usage or ownership, but not thosetaxes or assessments for prior yean because of an exemption granted to aprevious owner ofthe Property under Section 11.13, Texas Tax Code, or becauseofImprovements not assessed for a previous tax year.

2 Basement executed by L.P. Duvall and Clara Duvall, to Denton County BleotrloCooperative, Inc., dated May 30,1945, filed October 24,1953, recorded in/underVolume 402, Page 377 of the Real Property Records ofDenton County, Texas.

3. Flowage easement awarded to The United States of America in CondemnationProceedings in U.S. District Court for the Eastern District of Texas, ShermanDivision, under Cause No. 692, by Final Judgment dated November 18, 1955, acertified copy of which has been filed onJanuary 10, 1956, recorded in Volume418 Page 372, Real Property Records, Denton County, Texas, and shown onsurvey dated March 22,2006 by Mark Paine, RPLS #5078. .

4 Easement executed by Lewis Gibson Duvall and Robert Duncan Duvall, to theSouthwestern States Telephone Company, dated November 10, 1966, filedFebruary 13,1967, recorded in/under Volume 547, Page 71 of the Real Property

Records ofDenton County, Texas,

5 Basement executed by Lewis O. Duvall, to City of Highland ViUage, datedAugust 3,1976, filed October 5,1976, recorded in/under Volume 806, Page 666of the Real Property Records of Denton County, Texas, and shown on survey

dated March 22,2006 by Mark Paine, RPLS #5078.

6 Easement set but in Deed from Murray Duncan Duvall to Murray Duncan Duvall,Trustee dated August 27, 1991, recorded in Volume 3084, Page 209, RealProperty Records, Denton County, Texas, and shown on survey dated March 22,

2006 by Mark Paine, RPLS #5078.

7. Basement executed by Murray Duncan Duvall, to City of Highland Village datedFebruary 2,1993, filed March 24,1993, recorded in/under Clerk's Pile No. 93-R0016256 of the Real Property Records of Denton County, Texas, and shown onsurvey dated March 22,2006 by Mark Paine, RPLS #5078.

Exhibit"Btt-Pagelof2

135

OF 0740 0303

USCA5 2089

135 Of 165

EXHIBIT H OF THE FIFTH CIRCUIT'S LODESTAR



Case4:08-cv-00243-ALM Document 117-8 Filed 06/13/11 Page 48 of 117 PagelD #: 2091

148

USCAS 2118

148 of 165

EXHIBIT I OF THE FIFTH CIRCUIT'S LODESTAR



(OOB'.tSZAOBSM nnnniimmtt-tiiHwmiiWHgg FftBgp:HE2


152152 of 1

EXHIBIT J OF THE FIFTH CIRCUIT'S LODESTAR



QMtefffltaB:


O O

■ «Â.M.ût«« lawyers Title lruurancaC»rpe«rtM»

Lawyers 11He phOne. 2u 34*7200 mi frt*: no *n-7067flK 214 340-7270

Dinet Bill |I11)34«-7111■-MttliuhtnuntliBdia.eea

J

.< April 89, 2006

Mr. Joshua H.. HoxthmMoore Stoddard Northern t Digby

5307 B. Mockingbird Lane

Suite 900Ddllas, Texas 7920S

R«i Oantgn County, texaa Claim Ho. CX47323Iniuradi Doublatree Partnaca, L.t.

Ownar Policy No. B06-0094269Property. 310 Highland Village Road, Highland Village, TX

Dear Me. Northam:

Thia letter is in reaponaa to the above-referenced olaim you autaittedon behalf of your client, Doubiatree Partnera, L.P., to Lawyors. TitleJnauranoe Corporation ("Lawyers title") under the *•«•«««•* °""«polley o£ title lnauranoe. As you know, Lawyers Title has been

. investigating the cl«i». 1 an now in a position to provide you withLawyer! Title'■ current position with regard to coverage under thepolicy.

A. raotual Baakgcound

My understanding of the facts ia as follows:

1) On or about April 13, 2006, Doubletree Partners, I..P.purohased a parcel from Duncan Devall, containing-approximately 36 aorea (the "insured tract").

2) Prior to the closing of the purchase, on or aboutJanuary *, 8006, ' and/or March 15, 2006,landA«erlca/Ai»erlcan Title Company sent to Fred Placke,

and to Thonas P. Hoore at Blume, 3todderd and Moore, oneor more Commitment Por Title Insurance documentareflecting Cha terms upon which a title insurance policywould be issued for the'insured tract.

(He note here that Mr. Piaoka and Mr. Moore appear to

■ have been representing and/or aoting on behalf of two ormore entities in which Trail Placka was a principal.These .entities include Doubletree Partners, I.P.,TMlton" Holding Corporation, and/or Charith Development

Corporation.)

DOUBLETREE Prdctn

00580

APP 000229USCAS2562

154 154 of 165


o o

3) The Commitment for Title Insurance In Schedule B

thereof, contained a list of Exceptions from Coverage,

inoludino. the following:

10. The following matter* and ell ten* of the document* creetina oroffering evidence of the utter* (We mut insert matter* or delete thiseitaeption.li

a. Right* of partle* in pee*eselen.

b. Right* ef tenant* le poiiesaion unriar unrecorded leeso* orcent*! agreemente.

c. Uoenents, or elalne of laiwenei, which ere not recorded

in the.eublio reecrd*.

d. laeemnt .Mooted by L. P. »uv*U end Clare Dwell, toDentoa County taeetrie CooperatHo, Inc., dated Mey 30,194», filed October J«, 1951, recorded in/under Velum 403,pago 111 of the Real. Property Records of Dentoa County,

Texa*■

e. rlow*«e cosecant aveided to The United stetoa of America incondennetlon Prooaedlna* in U.I. Dietiiet Court of theCaetexn Dlatrlet of Tex**, Ihonun Division, under Cave*Ho. «i», by riael Judgment d«ted November It, ]»M, «certified copy of whieh hae been ftlod on January 10, IUf,recorded in Veluae 4», peee 314, Mel Property Record.,Dent on County, Tone!, and ihown on *urvey deted Merch 32,20O« by Mark p»ine, SPM tJOII.

t c*»*nent executed by Lewli Glbeon Ouvall and Robert DuncanDuvall, to The fonUweetern Ctetee Telephone Cenpaay, datedSovtnbetr 10, »•<«, fiied February 11, 1IC7, recorded"n/undoi Velua* 547, Page 71 ef the Mel Property Record.of Banton County, Texas.

laaoaant u.catad by lawla 0. Juvall. to City of «tvtllaoo, datad »u»»at J, 1»7«, filod Oetobax S, ,tieetdod in/undar voluaa »o«, Piige W at tha Mil FropactyRaeocd* of Dantoa County, Tanaa, and ahom oo aunrty datadMatch 22, i00« by Nark Nina, MM 19071.

Kaowmt »ot out In Daad f«m M»rr»y Duiwan Mwall toHurray Ounoan Ouvall, Twataa datad auaoat it. 1111.raeeidad In Volun 1014, paaa 301, Mai >to»»ty tooo«U,Maton Countyi taut, and abaim oa .«r»ay datad March »,100« by Nark Pallia, RPU IS07t.

sainant enaeuted by Murray ounean Dw«»J, Jo CJ.ty ofUahland Vlllaga, dttad rabruaiy 1, 1119. fUwl March 94,n»3, -eordid U/uVda. Clark'. Mla M. »J-M0l«as« of thaHeal rreparty Raeorda of pantos County, To«M, and ahown an• utv.y datad March 32, 2006 by Malk Mine, MLS IS07S.

laianant amcuttd by Ounoan Duvall, to Oppac Trinityr.JIÎS Katar Dl.t.i.t, d.tod March 10, UH. «Uad H**ohII, mi, raeordad In/undar velima «08I, paga 1JJT of thoMai Keparty »aeord« of osnto» Coenty, *a»M, a»d show onaurvey datod March », iOOl by Nark r«ina, WU 15010.

lattaant auoitad by Duncan 0u»Ul, to City of HlghlaadVillaoo, datad Novaafcar 30, 2000, fUod January 31, 2001,recorded is/udeV Volume 41J9, pa«a SO of tha Mai PropertyRecords ofOentsa County, texae, and (horn on inrvoy datedMarch 12, J»0« hy Mark Paine, MM IS010.

latamnt executed by Duncan Duvall, to City of lUeJOajdVlllaee, dated July 6, 3001, filed ■•£«*" »»• *°»*<racordsd ia/unoer VoIum 4919, p*g* S3» »f the Mil

DOUBLETREE Prdctn

00581

APP 000230USCA52563

155 155 of 165

D&muinaitt:(inHI2D0BBtES99.


o o

Property Recorda »{ ouiten county, fun, and abowi enaurvey dated Much 13, I0O6 by Mark Palne. R»tt IS07I.

a. rum off preparty Unea, deck ever property Una as ikeimon mm) by Nark Palna, R.P.t.S. He. IOIIi dated Hatch II,

aosi.

4) Prior to the above-described purchase, on or about March

22, ZOOS, a Surrey Plat was prepared for the insured

tract. This Survey Plat locates several of the it«asdescribed in the Commitment for Title Insurance

5) Prior to the closing of the above-described purchase byDoubletree Partners, L.;., a deed was prepared by theSeller's attorney which lilted the following Items as

"Permitted Exceptions," to-witi

nun s

pnwifrso sxesmoMt

the following Una ite remitted woeptlone to the extent they aie valid and

■ubtlltiR« and affect the Propertyi

1. standby raea, twea did aiatiauaata by any taxing -authority cor theyear 100«, ind Jubieqoent yearn and subaequent use* andasearamants by * tuina authority (or prior yaan due to change Inland «aege or otmerahip, but net there taxee or aeeeenunte (er»rlox yeera baeaUal' U an exenption granted to e previous owner ofthe rtepetty under Section 11.13, Te»ee rax Code, er baeauee e*improMMntt not asiaaaed (er a piavtoua ten year.

2 Wlament axaeuted by h.v, mvall and tUara on»all, to Oeatencounty aueerlo eaeeerattva. Ins., dated Nary 30, 19«S, (iladOeteber U, 1MJ. reoorded In/vmd.r Voluoe «0a, fe«e 177 or the

I Reel noparty Raeorda of Senton Ceunty, Teitea.

: J. rlovaae eaieMnt ewatdad to the United Stttei of taerlei tnCondemnation precaedtnga in n.s. nlitrlet Court fertile batonDintrtot o( Tenaa, Sharaan Divliion. under Csuae Ho. tn, by rin«lJuagMnt dated Nonaber it. 1B5S, a eertttled eopy of which haebeenflled on January 16, 1»S», raeordae in Volooe 411, Page IT},Keel Property Mcerda, Daaton County, Ta*aa, and them en avrvey

dated March 2», »00* by»ar«' Mine, wu I.1O1S. .

4 Caaanent eieeuted by fcowi* Olbaon Ou*all and Robert Dunean Ouvall,to the Southmatem Statea Telephone Coapany, dated Nomnber 10,1»6«, filed February 13, 1117, roeoided in/ondar Voluan S47, Page71 or the Seal iroperty keeordt of Dencon County, Toxaa.

s laaaaant executed by Lewia 0. Cuvall, to City of Highland Village,MMMmt 1, im, filed October S, I97«, recorded in/underVoluae IO<, Page ««« o( the H«al Property Record, of Canton County.raxaa' and aboSn on aurrey datad March M, z0«« by dark ralaa, t«J15011.

f Saiemest aet out In Caed fro* Murray Dunean oavall to Murray Dunean

ouvall, wuatae (Utea huguat J7, 1M1, recorded Is Veins 10M,tag* 301, »«al Property Meotde, Denton County, Janaa, and ahem on•Mvey deted March it, 8005 by Mark Mine, HU 1*071.

7. caeanant axeeuted by Murray ounoan Ouvall, to City of Ugalandvt'Iaga, datad February 2, 1*91. tiled March H, IMS, recordedln/und.r clork'a file Ho. tl-ROOlHIf of the Real Vxoparty M»rdaof Santon County, taxae, and ahewn en aurvey detad March U, 2005

by Hark Palna, RPU II07S.

a Caaeaeat axaeatad by Duncan onall. to Upper Trlaity Regional WaterDiatrict, datad Maroh 10, l»il, filed March It, 1MI, roeoxded

DOUBLETREE Prdctn

00582

APP 000231USCA52564

156 156 of 165


O ©

Wuftdac Vulvim «0M, faga 12J7 of tl>a Mai tiosaity Meecda ofMnten county, T««n, anrf ahown an auemy datad Karen JS, loot by

Hark Mlna, IK* t»9J«.

*. Saaaaant a*acutad by Ouncan Duvtll, to CUy af Highland Village,dattd Kovoabar 10, 1000. filed janoacy 11, 1001. cacordad in/undarVoIum 479 >. »»«• »0 or U)« Mil fropacty toeordt af Oantoa County,tutAt, and anew on auxvay datad Karen 71, JOC6 by Hot* mm, »PIS

I801I.

10'. toaaiMnt «K«uted by Maun Dunill, to City o« Hl«Hl»iid viUM«idatad July I, tOOl,' Iliad '(aptaabai 11, 100S, caeocdad ln/undacvoluaa «»»»■ ngi JJl of tha m«i rcooaity Meanla of Daatencourty, TaK«o, and ihown on aiuvay datad March M, 100« by aark

talna, W19 11011.

11, rwtea* ■(« ptoperty llnaa, dock ovax pxoporty lino, and ihotm on■Wxvoy datad Maxell 1«, 90S« by Muk ran*, KM »»01».

6) At tha time of the above-described cloalr.j, ■ Lease

XQreenent was executed by and between Doubletree

Partners, I.V., as Lessor, and Duncan DuvolX aa Lessee.The Lease Agreement contained an Exhibit B which appears

to Jiava been duplicated from tha Schedule B Exceptions

from Coverage included in the Commitment for Title

Insurance.

7) On or about October 6, 2006, Fred Placke as Manager orVillage Hard 8 LLC, the general partner of. Doubletree

Partners, L.P., submitted an Affidavit of Lost TitlePolicy to Indue* the issuance of a replacement policy.Thereafter, a replacement: policy waa sent to the

insured.

B) Due to a computer software problem, the policy in yourclient's possession' vas. Issued without the Schedule BBxoeptions from>> Coverage which were part of theCommitment for Title Insurance.

fire note here that your demand letter does nob indloete whichof the Schedule B Exceptions from Coverage ia tha source ofthe insured's loss; it is assumed it is a combination of all

ltena.]

B,• Title Policy Provisions

The Owner Polloy of Title insurance issued to DoubletreePartners, L.P. is a contract of indemnity against actual monetary loss'or daaage sustained or incurred by the insured by reason of a coveredtitle risk. The indemnity provided.by the polioy la expressly subjectto the terms, the Exclusions from Coverage, the Exceptions FromCoverage contained in Schedule B and the Conditions and Stipulations.The policy provides in pertinent part as followsi

snsner to tm txciosions rum ootmaob, tub bxcbfmns ink covmmb coamimo inKNbouu l »D tkii eoiDiHOM win sTlwuwiois, Lwyars Tlu» »s«*MeaCorporation, a Nabruta eoxpoiatlon, heroin eailod tXa Company, iaaurea, a* ofOat. of policy ahmrn la sehadola », aoanat loaa ox dana«o, not oneoadlnj «aHiava' e« nmanee atatad la iehodulo », .u.taU.d ox Uouxxod by tha lna»xad byloaion ofi . . ■

157

APP 000232USCA5 256S

157 Of 165


'' •'. O Q0

I. TUla to Ow •««• ot lfttMO.t do.crilnd in |ch«dula * b«in« v««»d otharthin »• «t««d th.nlni

z Any dof.et In or U«n or oncvnbruic. on th. tltl.i . . .

i. Lack or good and lnd»r«aaibXa tltl..

txcuonan imm covtwun

rn> fallowing Mtt.r. .r. .«(*•«»> y MeJadad fiom tin o»««g» «f tkli

i th«t »!•• J>y mion of i

il\ Sm mm tt tki eiMr, mt timM 4" »• »<*11« n""111 »*

«"tl»« to th. con»*»y by th. l«.»»d ol.ta.nt prior to th. datath. inaurad cslalwnt baoaaa an Inavnd und*> thl. polloyj

nSiittln? ta ?o.V"or*d.S!go*rtat wuuT'iIoV'hwJ**!^' mtal»n4 Iftto inwred eUlmmt had paid valua for th. oatato or IntaxaatInaurtd by thl. policy..

common MB miwunan

U) .

:d ^tsas? TsriAr Jts"neapt ■ •uceouax wJ« Is «n obWeor wdir tatof .wtlon W(e> .« r??^!11?:^Pî.U« of .wtlon W(e> .« .r,?,*,?^!-1

ttiBulttloni t»o»or»i»»i hoxowr. «U rigbti and.. u in, nmiiot tbit th. e«w*»y would h.« I.' i imund •• to ur tueowtot t

ot tbit th. e«w*»y would h.« I. iimund •• to ur tueowtot tlut t«o*d lt «ny pndisaMO* tniurod.

S ttr»»»••> «5»i«d th. »«■«*£«Mior for v«l»o «itlio»t Mowl.dg. of th. ••«•"•<at Ui> aneuabrueo. »d»or«o elaln or othor aottor

( thit !• ITtniurii « »7»«»"'or unfitt »n iMiirua eonenet« <ji!r«ty "n«rw» or «u.r.«t.olO« th. l»d.btod«...Hcurod by tb. ii«u««l ■ort,*.. o« «ny p«t bo«..«.ukathtr Mat* •• «n iiwuced K»i«in ox notr

(1111 mUT"!^? da.ltn.t.d in «.ctl« SI*) ot th... Condition,tnd SUpuUUom.

si

Slp eoBttiuetlf. nolle, ot «.tt.t« ««eetln« tho land.

C. Cov«ra9« D«t«»i»»tl<"»

B»*«d on th. above-quoted policy provialona, it i« th«H.t«n^Stlon of Lawyer* Title that Doubl.tre. Fartn.ra. L.P. doea nottill £v«o£ ?or th. ol*tm a...rted by Wubl.tr.. Partn.ra, l.P.

_ltl- has attaopted to apaolfy her.in th. polioy languag.upon which it curr.ntly ba«ea it. danial ot coverage.

"lit Protide .n addltio'nal ba.i. for d.nl.l of cover.,,,

DOUBLETREE Prdctn00584

APP 000233U8CA5 2566

158 158 of 165

flflMiw WSX^S/HtstK/ ffflimiitiWull'iiHiwiiiHiiMrHftHs. FrtBJQPB!x99 Uutlfasrnrau!


o o

Title will advise you of the same. Lawyers Title reserves the right toasiort other specific policy defenses, or to seek a declet.toryjudgment at any time and In any and all events.

D. Right to Contest Coverage OeteniMtion

Doubletree Partners, l.t., ha« the tight to contest V"*!"Title'a denial of coverage through arbitration aa provided in thepolicy or by litigation within the tina provided in the policy, or by

applicable law.

B. Additional In«ora»eion

' If you h«ve any questions, feel that I have misunderstood thenatter or wish to furnish any additional information for lawyers Titleto oonslder, please feel free to contact me at your convenience.

veey truly yours,

Sally A. SWerman, Esq.

Vlee PrasittentClaims center Manager

SAS/dlg

DOUBLETREE Pnfctn

00888

APP 000234USCA5 2367

159 159 Of 165

EXHIBIT K OF THE FIFTH CIRCUIT'S LODESTAR



OlJniujrra3Tit:(HISEaiB3tEEa Ffteggp:HEL (EffiteFFHteb:

Case 4:08-cv-00243-ALM Document 123-30 Filed 06/14/11 Page2of12PagelD#: 2547

LandAmerlcaTltl OiHm,7X»231

DltMst PHI (*l«)l<(-73tt

■-nti 1 MlwnuntlMUMB. eon

juna as, 3006

Mr. Christopher B. WalshMoora Stoddard northern c Digby5307 B. Mockingbird Lane

Suit* 900Dallas, Texas 75206

Re; Oenton County, Texas Claim Ho. C141323Insured) Doubletree Partners, L.P.

Owner Polioy No. 806-0094269Propartyi 310 Highland Village Road, Highland Village, TX

Oear Mr. Weloht

He have reviewed your responaer dated May 23, 2008 and the file, andhave not changed the opinions in «y latter dated April 29, 2008. Inaddition, since the raplaeenant polioy was erroneously issued, we haveprepared a corrected replacement policy and enclose it. As a result,the exceptions from coverage on Schedule B of the replacenent poiicyalso apply to the claims presented by Doubletree Partners, and I mustrespeotfully advise you that the claim remains denied.

Very truly yours

/Sally A. IMtmn, laq.

Vice Ptestaent

Claims Center Manager

SftS/dlg

Enclosure

DOUBLETREE Prdetn

00501

APP 000239USCA5 2S74

161 161 of 165

(QBBe:U24QDBSES QDimiiTrarTtt:aDQCEa2aiB3IH2Sa FftegpsiffiE DtetteFffltatl


SCHEDULEB

EXCEPTIONS PROM COVERAGE

r1 fees or

any.

ihowrHn Schedule A and the following matters:

1. Item 1. Schedule B to hereby deleted In Its entirety.

2. Shortages In area.

3. Homestead or community property or suivtvorshlp rights, If any, of any spouse of any Insured.

4. Any Miles or rights asserted by enyone, Including, but not limited to, parsons, the public,corporations, governments or other entitles,

a to tWelande, or lands comprising the shores or beds ol nevlgeble or perennM rivers andstreams, takes, beys, gulfi or oceans, or

b. to tanda beyond the line of herbor or bulkhead Knee es established or changed byany

government, or

o. to fiUed-Jri lands, or artificial Islands, or

. d. to statutory water rights, Including riparian rights, or

a to the area extending from the line of mean low tkJe to the line ofvegetation, or Ihe rlghta of' eoooss to that area or easement along and across that area.

5. Stendbyfees. taxea and assessments by any taxing authority for maryaar20M, and «*««»«"»

ISSo^nto^pre^tous owner of Ihe properly under Section 11.13. Tewa 7*r (because of Improvements not assessed for a previous tax year.

6 Thefdtowmn mattera and all terms of Ihe documents creeling or offering evidence of the matters(We must Insert matters ordelete this exception.);

Deed *Tn«t executed

^rCounty,

principalpayable and bearing Interest as

MRIlWMllS?A^8XA8 UMITBO PARTNERSHIP, dated April I, M08. UpIM008, recorded lnAindar200e-«3Bl2 of the Real Property Raeorda of OBNTOM

County. Texas.

b. Righto of parties In possession.

e. Rights of tenants In possession under unrecorded leaaea or rental agreementa.

DOUBLETREE Prdctn

APP 000245USCA5 2580

162 162 Of 165

nsamirvsmmmmmESSi ms&e-.WQ aaateWiteB:inygrygniPP


d. Eaasmsnto, or claims of essomsnts, which are not recorded In the public records.

.. Easement cxeouted by L. P. Duvall and Clara Duvall, to Denton County EJtotrioCooperative, Inc., dated May 30, 1846, filed October 24,1863, recorded In/underVolume 402, page 377 of the Rsal Propsrty Rseords of Dsnton County, Tsxss.

f Ftewaos easement swarded to The United States of Amerloa In CondemnationPmceedlnw In U.B. District Court for the Esstsrn District of Texas, ShsrmsnDivision, under Causs Mo. 682, by fins! Judgmsnt datsd November 18, 1868, aewmed eopV of whteh has be.n fltod en JsnSryiO. 1868, rseordsd In Volume 418,page 872, Reel Propsrty Rseords, Denton County, Texas, and ahown on surveydatsd March 22,2008 by Mark Palne, RPL816078.

o. Easement executed by Lewie Olbson Duvall snd Robert Dunosn Duvall, to Ths* SouXrsstam Stole. Tehphone Company, dated Novsmbsr 10,, 1866, WadFsbrusry

13,1887, recorded In/undsr Volums 647, Page 71 of the Real Property Records ofDsnton County, Taxes.

h. Easement executed by Lewis S. Duvall, to City of Highland VNIaga, dated August 3,«7ftfllad Ootober eT 1878, raeorded htfunder Volume 808. Page 866 *'the RealPropsrty Rsoords of Dsnton County, Tsxss, and shown en survsy dsted Maroh 22,2008 by Mark Palne, RPL8 #6078.

I Easement sst out In Deed from Murray Duncan Duvall to Murray Duncan Duvall,Tme^ dated August 27.1881, recorded In Volume 8084. pege 208. Real PropertyRooords, Denton County, Texae, and ehewn on eurvey dated Maroh 22, 2008 byMark Palna,RPL8 #6078.

I Easement executed by Murray Dunean DuvaD, to City of Highland Village, datsdJ> FeSSSS Fvm?«« March 24, 1883, rseorded Infunder Clerk's File No. 83-

R0018288 of ths Real Propsrly Rwords of Denton County, Texas, and shown onsurvsy datsd Maroh 22,2008 by Mark Palne, RPL8 #6078.

k euament exoouted by Dunean Duvall. to Upper Trinity Regional Water Dletrtot,K WeTMaUT^/rosdtorohT rSoordsd In/under Volume 4062, page

1287 of the Real Propsrty Rseords of Dsnton County, Tsxss, and shown on surveydated March 22,2008 by Mark Pains, RPtS 66078.

i Easement sxscutsd by Ouncsn Duvall. to City of Highland VUlsgs, dated NovsmbsrSTSRSsSanf23,2001. rseordsd In/undsr Volums 4768, psgo 80 of IhsRsalPropsrty Rsoords ofbenton County, Tsxas, and shown on survsy dstsd Msrch 22,2008 by Mark Pains, RPL8 #6078.

to CKy of Highland Village, dstsd July 8,

Real Property Records of Denton County, Tsxas,82,2008 by Mark Pains, RPL8 #6078.

n. Fsnose off propsrty Dnss, dsck over pfoperty line es shown on survsy by MarkPains, R.P.L.8. No. 6078, dated March 22,2008.

a Reservation of oil, gas, sulphur and other minerals In Dsed executed by DuneanSSvaVandw»VS Louisa DuvaD to Doubletree Partner., LJ, •"Tex«JbnttedÛ^pTdVtsd April 1,2008, filed April 13,20»B, recordedj^"^'**""?No. 2006V43B22 of the Real Property Records of OENTON Coun^V"^JwSi

DOUBLETREE PrdCUi .

00588

APP 000246USCA52S81

163 163 of 165

1


aald Warwt not ehaekad aubaaquant to data of aforawld Inrtrumont

LANDAMERICA' TITLE COMPANY

Pagt«

DOUBLETREE Prdctn

00888

APP 000247IISCA52S82

164 164 Of 165