Blackhawk Production Credit Ass'n v. Chicago Title Ins. Co., No. 85-0524

CourtCourt of Appeals of Wisconsin
Writing for the CourtGARTZKE
Citation400 N.W.2d 287,135 Wis.2d 324
PartiesBLACKHAWK PRODUCTION CREDIT ASSOCIATION, a foreign corporation, Plaintiff- Respondent, v. CHICAGO TITLE INSURANCE COMPANY, a foreign corporation, Defendant-Appellant.
Decision Date20 November 1986
Docket NumberNo. 85-0524

Page 287

400 N.W.2d 287
135 Wis.2d 324
BLACKHAWK PRODUCTION CREDIT ASSOCIATION, a foreign
corporation, Plaintiff- Respondent,
v.
CHICAGO TITLE INSURANCE COMPANY, a foreign corporation,
Defendant-Appellant.
No. 85-0524.
Court of Appeals of Wisconsin.
Submitted on Briefs May 23, 1986.
Opinion Released Nov. 20, 1986.
Opinion Filed Nov. 20, 1986.
Review Granted.

Page 288

[135 Wis.2d 326] Robert J. Schwab and C. Vernon Howard of Stroud, Stroud, Willink, Thompson & Howard, Madison, for defendant-appellant.

Lewis Murach of Rudolph, Kubasta, Rathjen & Murach, Wautoma, for plaintiff-respondent.

Before GARTZKE, P.J., DYKMAN and EICH, JJ.

GARTZKE, Presiding Judge.

Chicago Title Insurance Company appeals from a judgment for $85,000 plus interest in favor of Blackhawk Production Credit Association. The judgment is on an $85,000 title policy covering Blackhawk's security in real estate for its $280,000 loan to Kim Rolfe.

The basic facts are undisputed. Kim Rolfe owed Blackhawk about $280,000 on a 1979 note secured by livestock, farm products, and farm machinery. The note was also secured by irrigation equipment. Kim owned an undivided one-half interest in three parcels totaling 413.5 acres of farmland he and Philip Rolfe were buying on a land contract. The irrigation equipment was installed on that land.

In March 1980 Kim Rolfe assigned his one-half interest in the land contract to Blackhawk as additional security for his $280,000 note. The same day Chicago Title issued its $85,000 title policy to Blackhawk. The policy insures Blackhawk's security interest against "loss or damage" not exceeding $85,000 sustained by reason of "any defect in or [prior] lien or encumbrance on" Kim's one-half interest in the three parcels. The [135 Wis.2d 327] policy excepts the land contract, as well as other specified prior encumbrances not pertinent to this appeal.

Neither Blackhawk nor Chicago Title knew that Kim and Philip Rolfe had already assigned their land contract interest to First National Bank and Trust Company of Rochelle as security for their debt to that bank. Blackhawk first learned that its security was junior to Rochelle Bank's when the land contract vendors began an action to foreclose the interests of Kim and Philip Rolfe. By that time, their debt to Rochelle Bank exceeded $350,000, and Kim Rolfe's debt to Blackhawk had risen to $297,132. Blackhawk settled the foreclosure action by payments to the prior encumbrancers. Through that settlement, Blackhawk acquired clear title, including Philip Rolfe's interest, not only to the three parcels but also to an additional 41 acres. Chicago Title's policy did not cover the 41 acres. Blackhawk then sold the three parcels and the 41 acres.

The trial court concluded that by settling the foreclosure action and selling the land, Blackhawk reduced its unsecured loss from a probable $245,132 to $98,774. Blackhawk sold all the land it acquired and the irrigation equipment for $583,500, an average of $1,285 per acre. The court reasoned that

Page 289

the sale price, less $52,685 for the 41 acres, established a $530,815 value for the three parcels in the foreclosure action. The court reduced that value by $52,000 for the irrigation equipment, since Blackhawk's prior lien on the equipment would have allowed Blackhawk to remove it. The $216,560 land contract balance was superior to Blackhawk's security and the delinquent taxes totalled $9,147. Thus, the three parcels had a net value of $253,108, in which Kim Rolfe had a one-half interest. Since Kim Rolfe owed Rochelle Bank over $350,000, [135 Wis.2d 328] foreclosure would have wiped out his one-half interest in the three parcels, leaving no security for Blackhawk.

The trial court found that to obtain a release of Rochelle Bank's interest, Blackhawk paid the bank $111,250, of which $4,500 was paid to a third party and $106,750 was retained by the bank. Rochelle Bank then quitclaimed the three parcels to Blackhawk and conveyed the additional 41 acres to Blackhawk by trustee's deed. The court specifically found that the $106,750 paid to Rochelle Bank satisfied the bank's interest and that no part of that amount was paid for the 41 acres.

The trial court concluded that by acquiring and selling the three parcels and settling with Rochelle Bank, Blackhawk reduced its "net unsecured loss" to an amount which nevertheless exceeded the $85,000 policy limit. Since that loss would not have occurred but for the Rochelle Bank lien and the amount paid to settle it, the court granted judgment against Chicago Title for $85,000. The court's computations are as follows: 1

The pertinent law is that applicable to policies (commonly known as "mortgage policies") issued to [135 Wis.2d 329] creditors insuring the titles to land in which the creditors hold security interests against title defects and prior liens or encumbrances. As a general rule, "[A] title policy insuring a mortgagee insures only the title to the land securing his debt and not the debt, obligating the insurer to indemnify the mortgagee against loss or damage resulting from defects in his title as mortgagee but neither...

To continue reading

Request your trial
4 practice notes
  • Blackhawk Production Credit Ass'n v. Chicago Title Ins. Co., No. 85-0524
    • United States
    • United States State Supreme Court of Wisconsin
    • January 13, 1988
    ...Justice. This is a review of a published decision of the court of appeals, Blackhawk Production Credit Ass'n v. Chicago Title Ins. Co., 135 Wis.2d 324, 400 N.W.2d 287 (Ct.App.1986), which reversed a judgment of the circuit court for Waushara county, Circuit Judge Frederic W. Fleishauer of P......
  • Griepentrog v. Griepentrog
    • United States
    • Court of Appeals of Wisconsin
    • November 19, 1987
    ...to support the findings that were made, rather than those which may have been made but were not. Blackhawk Credit v. Chicago Title Ins., 135 Wis.2d 324, 331, 400 N.W.2d 287, 290 (Ct. App. Ronald argues first that it was improper to value his one-fourth interest at one-fourth the net value o......
  • Schmidt v. Schmidt
    • United States
    • Court of Appeals of Wisconsin
    • January 28, 1988
    ...erroneous standard of review, we search the record for evidence which supports this finding. Blackhawk Credit v. Chicago Title Ins., 135 Wis.2d 324, 331, 400 N.W.2d 287, 290 (Ct. App. 1986), reversed on other grounds, no. 85-0524 It is permissible for a trial court to value a corporation's ......
  • Reed v. Pelkola
    • United States
    • Court of Appeals of Wisconsin
    • May 19, 1987
    ...656, 151 N.W.2d 630, 632 (1967). We decide such questions without deference to the trial court. Blackhawk Credit v. Chicago Title Ins., 135 Wis.2d 324, 332, 400 N.W.2d 287, 290-91 (Ct. App. Pelkola did not own the car. Lundgren was the owner under Wisconsin law because he retained title to ......
4 cases
  • Blackhawk Production Credit Ass'n v. Chicago Title Ins. Co., No. 85-0524
    • United States
    • United States State Supreme Court of Wisconsin
    • January 13, 1988
    ...Justice. This is a review of a published decision of the court of appeals, Blackhawk Production Credit Ass'n v. Chicago Title Ins. Co., 135 Wis.2d 324, 400 N.W.2d 287 (Ct.App.1986), which reversed a judgment of the circuit court for Waushara county, Circuit Judge Frederic W. Fleishauer of P......
  • Griepentrog v. Griepentrog
    • United States
    • Court of Appeals of Wisconsin
    • November 19, 1987
    ...to support the findings that were made, rather than those which may have been made but were not. Blackhawk Credit v. Chicago Title Ins., 135 Wis.2d 324, 331, 400 N.W.2d 287, 290 (Ct. App. Ronald argues first that it was improper to value his one-fourth interest at one-fourth the net value o......
  • Schmidt v. Schmidt
    • United States
    • Court of Appeals of Wisconsin
    • January 28, 1988
    ...erroneous standard of review, we search the record for evidence which supports this finding. Blackhawk Credit v. Chicago Title Ins., 135 Wis.2d 324, 331, 400 N.W.2d 287, 290 (Ct. App. 1986), reversed on other grounds, no. 85-0524 It is permissible for a trial court to value a corporation's ......
  • Reed v. Pelkola
    • United States
    • Court of Appeals of Wisconsin
    • May 19, 1987
    ...656, 151 N.W.2d 630, 632 (1967). We decide such questions without deference to the trial court. Blackhawk Credit v. Chicago Title Ins., 135 Wis.2d 324, 332, 400 N.W.2d 287, 290-91 (Ct. App. Pelkola did not own the car. Lundgren was the owner under Wisconsin law because he retained title to ......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT