Bryan Knight (left) and Sherri Buda, Knight Johnson LLC, Atlanta. (Photos: John Disney/ALM)

A nine-year litigation battle over a title insurance claim that the lead lawyer described as "not very sexy" has finally concluded in a way that made him happy nonetheless—with a $4.5 million payment.

"I'm more happy about the results for the client," said Bryan Knight of Knight Palmer, who along with Sherri Buda represented a real estate investment group called RM Kids. "They actually stood up to the insurance company where many people would have bowed out years ago."

At the heart of the case was an oil spill from the 1990s that contaminated the land and groundwater in the area off Ga. 316 near Sugarloaf Parkway in Gwinnett County—which in that era had become known as the fastest growing suburb in the country.

In 2007, a deal was made by a developer to buy 151 acres there for $11.4 million, with plans for a residential subdivision. Peachtree Bank provided the loan, then later sold the loan to Knight's client.

"After they bought the note, it became apparent there was a title defect," Knight said. "The defect became known in the years of litigation that followed as Exhibit C, which was a document disclosing the oil spill. It required 'notice to all subsequent landowners' of petroleum contamination from an underground pipeline affecting groundwater and surface water. The damage has been mediated and monitored since and will require continued monitoring, according to the document. Restrictions include but are not limited to 'drinking, bathing, cleaning, irrigation or installation of wells.'"

The original lender's real estate closing attorney left Exhibit C out of the paperwork. He later blamed the omission on his paralegal. But they were not the defendants. The defendant was Old Republic National Title Insurance Co., which declined to cover the defect.

In 2010, RM Kids sued Old Republic over the omission, alleging it amounted to a title defect.

In 2015, RM Kids won a $7.1 million verdict based on the difference between the land value with and without contamination. Old Republic appealed. The Georgia Court of Appeals reversed on an issue of first impression, ruling that the value of the property had to be set as of the date of foreclosure, which was at a post-recession low in 2012, not the date of the sale, which was in 2007, before the real estate bubble burst.

In 2018, the case was tried again, this time with a $4.2 million verdict. Old Republic appealed again, saying the judge should have granted the defense a directed verdict.

In October, the Court of Appeals issued another opinion, this time affirming the verdict.

"We conclude that the easements and restrictions constituted defects in title that are covered by the policy, and there was sufficient evidence to establish damages," Judge Todd Markle wrote for a panel that included Presiding Judge Sara Doyle and Judge Chris Coomer. "The trial court properly denied the motion for directed verdict."

Gwinnett County Superior Court Judge Tom Davis, now retired, heard the case the first time. Magistrate Judge Robert Walker presided over the second trial.

Last week, Knight said, Old Republic paid RM Kids the full amount of the verdict plus $300,000 in post-judgment interest, for a total of $4.5 million.

Old Republic was represented by William Brown of Heyman & Sizemore along with Ed Wasmuch Jr. and Ed Burch Jr., both of Smith, Gambrell & Russell. They did not have an immediate comment.

"At the end of the day, Old Republic should be very happy with their counsel," Knight said. "They were able to reduce the amount they owed by $3 million and hold the money for nine years. They probably made more from investing it than they paid."

Knight had an extra reason to celebrate—thanks to a gamble he made along the way.

"I typically do most of my cases on hourly. I did the first trial hourly. But it took my clients five years to get a trial," Knight said. Then the verdict was overturned. RM Kids were tapped.

"They came to me and said, 'Do you want to take the second trial on contingency?'" Knight said.

His answer?

"Yeah, let's do it."

Knight wouldn't disclose the percentage of his contingency agreement. But he did have this to say about the story's conclusion: "I feel pretty good about it."