Tait

BACKGROUND

In 2016, the Taits purchased a residential property in Danville for $1.25 million. Commonwealth issued the Taits an American Land Title Association (ALTA) Homeowner’s Policy of Title Insurance for the property. The policy insures the Taits against “actual loss” arising from certain defined covered risks, which include someone else having an easement on the property. The policy limits Commonwealth’s liability for an unknown easement to the lesser of the Taits “actual loss” or the policy limit of $1.25 million. The policy does not define “actual loss.” The policy excepts from coverage certain building and subdivision restrictions recorded by the Town of Danville (town) and a recorded irrevocable offer of dedication of a drainage easement. The building restrictions prohibit further subdivision of the property and the construction of any building within the area of the offered drainage easement. As they had intended upon purchasing the property, the Taits proceeded with plans to subdivide the property into two lots. Between May 2016 and February 2017, the Taits engaged in informal talks with the town’s development services coordinator, Fred Korbmacher, about their proposed…