Facts

Plaintiff Liberty National Enterprises, LP (Liberty) purchased a commercial building known as the Broadway Trade Center (BTC) and a title insurance policy from Chicago Title Insurance Company (Chicago). When two individuals who claimed that they owned part of that building sued Liberty, Liberty asked Chicago to defend the litigation. Chicago declined, stating that the claim was not covered under the title policy. Liberty settled the action, and then sued Chicago.

The action was trifurcated. In the first phase, the court determined that Chicago had a duty to defend.

In the second phase, the court found Liberty's damages for breach of the duty to defend to be just over $1 million.

In the third phase, the issue was whether Chicago's denial of the defense and handling of the claim was in bad faith.

PLAINTIFF'S CONTENTIONS:
Liberty contended that Chicago's refusal to defend the underlying action was in bad faith, and that Chicago's denial of the defense rendered title "unmarketable" and prevented Liberty from selling the building at the top of the market - a lost opportunity worth approximately $45 million.

DEFENDANT'S CONTENTIONS:
Chicago contended that its denial of the defense and its handling of the claim was reasonable. Chicago claimed that Liberty's alleged damages were the result of the real estate market downturn and Liberty's own decisions, not anything caused by Chicago.

Damages

Liberty claimed $45 million in consequential damages for diminished value of the property, plus interest and punitive damages.

Result

Defense verdict. The jury found that Chicago Title did not breach its good faith obligation in denying a defense to Liberty in the underlying action.

Other Information

Chicago Title's motion for new trial was denied. Motion for costs of proof sanctions against Liberty for unreasonably denying requests for admission was denied. Chicago filed an appeal on phases 1 and 2. Liberty filed a cross-appeal on phase 3. FILING DATE: Nov. 5, 2007.

Deliberation

two days

Poll

12-0

Length

17 days