A Fulton County jury found in favor of New Freedom Mortgage Corporation on its contractual indemnification claim against Lawyers Title Insurance Company. Lawyers Title appeals, contending that a new trial is necessary because the trial court gave erroneous jury instructions on misrepresentation and concealment, causation, and confidential relationships. Lawyers Title further contends that the trial court erroneously granted in part New Freedom’s motion in limine preventing Lawyers Title from introducing certain causation evidence. Because the jury instruction on misrepresentation and concealment was legally erroneous and harmful, we conclude that Lawyers Title is entitled to a new trial. The record reflects that New Freedom is a residential mortgage lender, while as Lawyers Title is in the business of issuing title insurance policies to residential home buyers and lenders. In an effort to induce New Freedom to purchase title insurance, Lawyers Title issued to New Freedom an indemnification agreement known in the insurance industry as a “closing protection letter” “CPL”.
Under the CPL, Lawyers Title agreed to indemnify New Freedom under certain circumstances for actual losses New Freedom incurred in connection with residential real estate closings conducted by an agent authorized to issue title insurance on behalf of Lawyers Title an “issuing agent”. Among other things, the CPL provided that Lawyers Title would reimburse New Freedom when its actual loss “arises out of” 1 the issuing agent’s failure to follow New Freedom’s written closing instructions relating to the collection and payment of funds due to New Freedom, or 2 the issuing agent’s “fraud or dishonesty . . . in handling New Freedom’s funds or documents in connection with such closings.”
