WHEN ALL THOSE CORNERS WERE ITCHING FOR BANKS Coming soon to a courthouse near you: Ponderosa Land Development Co. and the bank corner that got away: “Ponderosa bought nearly an acre in Sugar Land three years ago from Gateway Financial for a price of $1.8 million. The land at the corner of State Highway 6 and Settlers Way was purchased for development of a JP Morgan Chase Bank branch. Over the past five years, Ponderosa has built about 50 bank branches in Texas for Chase Bank. [Ponderosa’s James] Chang says Ponderosa had already secured a long-term ground lease with the bank, and an investor was lined up to buy the property once the building was complete. Shortly after the land acquisition closed in April 2007, Ponderosa demolished a gas station that was operating on the site to prepare for construction of the bank branch. In the process, Ponderosa learned that the Sugar Land site carries a deed restriction prohibiting construction of a financial institution. The alleged oversight on the part of AmeriPoint [Title] in conducting a title search put the brakes on development. ‘Missing the restriction was kind of an important miss,’ says Chang. Stewart Title wrote a title insurance policy based on AmeriPoint’s work. . . . Ponderosa filed suit in July 2008 to recover the $1.8 million land purchase price. The firm is also seeking $1.6 million for three years of lost profits. Ponderosa tried to collect on the firm’s $1.8 million title insurance policy, but Chang says Stewart Title claims the diminished value of the land is $200,000.” [Houston Business Journal]
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Title companies are legally protected scourges of the worst degree, peddling an incompetently administered service for extortionate rates. I hope they get the pants sued off them, and then some.
Ponderosa tried to collect on the firm’s $1.8 million title insurance policy, but Chang says Stewart Title claims the diminished value of the land is $200,000.â€
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Imagine what would happen if every homeowner went back to the lender and claimed the “diminished value” of their property meant they didn’t have to pay any more than what the home was now worth.
Next I suppose the insurance companies will tell widows that even though the policy says the death benefit is $1 million, they have determined that the “diminished value” of the deceased was really just $100,000.
You wonder how these schmucks manage to sleep at night. I guess they sleep quite well. Dreaming about who they can rip off next.
Oh and I forgot to add how many of these schmucks are also pillars of the community.
Title insurnce is worthless. Anything you could possibly want title insurance for is discliamed as “exceptions to title”; like boundary line variations or “undisclosed interests in the land”.
I hope Ponderosa wins the case. I am sure one of the issues will be whether or not the title company disclaimed consequential damages.
Good luck Chang!