A bank’s title insurance policy does not cover losses due to misappropriated lien funds when the insurer was not involved in the transfer of funds, the Pennsylvania Superior Court has ruled.
In a Jan. 20 opinion, the Superior Court affirmed a ruling of the Butler County Court of Common Pleas, which concluded that Northwest Savings Bank was not entitled to coverage after The Closing Company of PA misappropriated funds it received from Northwest to satisfy liens against a refinanced property. The trial court had granted a motion for summary judgment to Fidelity National Title Insurance Co., Northwest’s insurer.
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