11-055.00 JZ Harris (Zoe Harris): Street Maintenance Facility PurchaseS�an� �.
Public Works Department
11707 E Sprague Ave Suite 106 ♦ Spokane Valley WA 99206
509.921.1000 ♦ Fax: 509.921.1008 1 cityhatt@spokanevalley.org
February 9, 2011
Zoe Harris
JZ Harris, LLC
P. O. Box 757
Otis Orchards, Wa 99207
Re: Purchase Offer for:
Parcel 45121.9118
17002 E. Euclid Ave.
Spokane Valley, WA 99214
Dear Ms. Harris:
The above referenced property has been identified as an acceptable location for the City's street
maintenance operation.
A conditional offer from the City of Spokane Valley for the purchase of your property for this
project is $750,000.00. This offer is based on the Offer Summary as follows:
Total Acquisition of Land and Improvements to be conveyed by Statutory Warranty Deed:
$750,000.00
Conditions:
1. The City will require and pay for an appraisal of your property. The appraisal price must
be at or above the above listed offer.
2. The offer must be approved by the Spokane Valley City Council.
3. No significant property defects result from a detailed inspection of the property.
4. No limitations on title.
0,01 Gq5
Spokane Valley Street Maintenance Facility
Page 2
Parcel: 45121.9118
If the above conditions are met, you may expect closing and payment in sixty days from the date
you approve this agreement.
Sincerely,
Neil Kersten, Al CARB
Public Works D' ector
Spokane Valle , A 99206
509- 720 -5000
Acceptance of Offer:
Your signature below confirms that you have accepted the above offer and conditions.
Zoe Harris
Date
��//
GW,4 41 -9 - U
John K, s Date
REAL ESTATE PURCHASE & SALE AGREEMENT
March 28, 2011
Buyer: City of Spokane Valley
Seller: JZ Harris LLC
Property Tax Parcel: 45121.9118 approx 2.96 acres, Office Bldg. approx 70'x20', Shop
building — approx 50'x90'
Street Address: 17002 E. Euclid, Spokane Valley, Washington 99216
Purchase Price: $734,476.00
Earnest Money: -o-
Title Agent and Closing Agent to be Spokane Title Company. Closing Date April 1, 2011
Possession upon closing.
Closing Costs, Prorations, Charges and Assessments: Taxes for the current year,
interest and Common Area Maintenance Fees shall be pro -rated as of closing and paid by
the Seller. Buyer agrees to pay Buyer's loan costs, if applicable, including but not limited
to appraisal, credit reports, Environmental Site Assessment report fee and Lender's title
insurance, etc. Buyer also agrees to pay Seller's closing costs including Owner's Title
Insurance Policy, closing agent's fee and Washington State excise tax of
1.78 %.
Buyer agrees to purchase said property in its present on ition. Buyer has inspected the
property and is responsible for determining whether the zoning is suitable for its uses.
Environmental Phase one is completed and Buyer accepts the results as satisfactory. Any
additional inspections shall be at the buyers' expense.
Buyer may not assign this agreement.
lm
er
Bu Y 's Signature Date 3 ,o l
Neil Kersten, AIA, NCARB. P c Works Director
City of Spokane Valley
11707 E. Sprague Ave, Suite 106
Spokane Valley, WA 99206 Phone 509.921.1000
Seller's Signature Date j --) 9 - //
David John Harris, Me
Seller's Signature Date ii — o 2 J
Zoe S. Harris, Member
JZ Harris LLC
P.O. Box 757, Otis Orchards, WA 99027 Phone 509. 926.3854
OWNER'S POLICY OF TITLE INSURANCE
* ** Policy Number OX 08314641
* * Issued by Old Republic National Title Insurance Company
* * * Any notice of claim and any other notice or statement in writing required to be given to the
* yk Company under this Policy must be given to the Company at the address shown in Section 18
of the Conditions.
COVERED RISKS
SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B, AND THE CONDITIONS, OLD
REPUBLIC NATIONAL TITLE INSURANCE COMPANY, a Minnesota corporation (the "Company') insures, as of Date of Policy and, to the extent stated
in Covered Risks 9 and 10, after Date of Policy, against loss or damage, not exceeding the Amount of Insurance, sustained or incurred by the Insured
by reason of:
1. Title being vested other [lien as stated in Schedule A.
2. Any defect in or lien or encumbrance on the Title. This Covered Risk includes but is not limited to insurance against loss from:
(a) A defect in the Title caused by
(i) forgery, fraud, undue influence, duress. incompetency, incapacity, or impersonation;
(ii) failure of any person or Entity to have authorized a transfer or conveyance;
(iii) a document affecting Title rut pruperly created, executed, witnessed, sealed, acknowledged, notarized, or delivered;
(iv) failure to performthose acts necessary to create a document by electronic means authorized by law;
(v) a document executed under a falsified, expired, or otherwise invalid power of attorney:
(vi) a document not properly filed, recorded, or indexed in the Public Records including failure to perform those acts by electronic
means authorized by law; or
(vii) a defective judicial or administrative proceeding.
(b) The lien of real estate taxes or assessments imposed on the Title by a governmental authority due or payable, but unfraid.
(c) Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Titlp that would be disclosed by an accurate
and complete land survey of the Land. The term "encroachment" includes encroachments of existing improvements located on the Land
onto adjoining land, and encroachments onto the land of existing improvements located on adjoining land.
3. Unmarketable Title.
4. No right of access to and from the Land.
5. The violation or enforcement of any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting,
regulating, prohibiting, or relating to
(a) the occupancy, use, or enjoyment of the Land;
(b) the character, dimensions, or location of any improvement erected on the Land;
(c) the subdivision of land; or
(d) environmental protection
if a notice, describing any part of the Land, is recorded in the Public Records setting forth the violation or intention to enforce, but only to the extent
of the violation or enforcement referred to in that notice.
OLO REPUBLIC NATIONAL TITLE INSURANCE COMPANY
Issued through the office of: A Stock Company
SPOKANE COUNTY TITLE 400 Second Avenue Smith, Minneapnlis, Minnesota 55401
COMPANY (612)371 -1111
NORTHBANK BUILDING, SUITE 100
1010 N. NORMANDIE STREET
SPOKANE, WASHINGTON 99201
CounteCsigned By President
Autlwrized: officer or Agent Attest �-f✓� P ry
Sec�eta
ORT Form 4369 h,
ALTA Owners Policy of'ritle Insurance6.17 -06
nsurance
Premium
76.00
$1,456.00
2. The estate or interest in the land which is covered by this policy is:
FEE SIMPLE
3. The estate or interest in the land is vested in:
CITY OF SPOKANE VALLEY, a Washington municipal corporation
4. The land referred to in this Policy is described as follows:
Lot 18, ALTERED BINDING SITE PLAN NO. 87 -17, as per plat recorded in Volume 1 of Binding Site
Plans, Page 22A, records of Spokane County;
Situate in the City of Spokane Valley, County of Spokane, State of Washington.
Countersigned
By 4� � Qm
Authorized Office or Agent
SPOKANE COUNTY TITLE COMPANY
NORTHBANK BUILDING, SUITE 100
1010 N. NORMANDIE STREET
SPOKANE, WASHINGTON 99201
TELEPHONE (509) 326 -2626
* * * ** An Agent of
* * Old Republic National
* * y ** Title Insurance Company
*
This policy valid only if Schedule B is attached.
CITY OF SPOKANE VALLEY, a Washington municipal corporation
OWNERS POLICY
SCHEDULE B - PART I
File Number: 173639
Policy Number: OX 08314641
EXCEPTIONS FROM COVERAGE
This policy does not insure against loss or damage (and the Company will not pay costs, attorney's fees or expenses), which arise
by reason of:
STANDARD EXCEPTIONS:
1. Rights or claims of parties in possession, or claiming possession, not shown by the Public Records.
2. Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by
an accurate and complete land survey of the Land.
3. Easements, prescriptive rights, rights -of -way, liens or encumbrances, or claims thereof, not shown by the Public Records.
4. Any lien, or right to a lien, for contributions to employee benefit funds, or for state workers' compensation, or for services,
labor, or material heretofore or hereafter furnis hed, all as imposed by law, and not shown by the Public Records.
5. Taxes or special assessments which are not yet payable or which are not shown as existing liens by the Public Records.
6. Any lien for service, installation, connection, maintenance, tap, capacity, or construction or similar charges for sewer, water,
electricity, natural gas or other utilities, or for garbage collection and disposal not shown by the Public Records.
7. Unpatented mining claims, and all rights relating thereto.
8. Reservations and exceptions in the United States Patents or in Acts authorizing the issuance thereof.
9. Indian tribal codes or regulations, Indian treaty or aboriginal rights, including easements or equitable servitudes.
10. Water rights, claims or title to water.
SPECIAL EXCEPTIONS:
GENERAL REAL ESTATE TAXES (including amounts for Aquifer, Storm Water, Irrigation,
Drainage Water, and Flood Control, if any), for the second half of the year 2011 due, but not
delinquent until November 1, 2011;
Full Year Amount billed: $7,596.54
1st Half Amount paid: $3,798.27
2nd Half Amount due: $3,798.27
Tax Account No.: 45121.9118
2. LIABILITY TO ASSESSMENTS if any, by the City of Spokane Valley.
3. EASEMENT including the terms, covenants and provisions thereof, as granted by instrument;
Recorded: April 18, 1960
Recording No.: 701476B
In favor of: The Washington Water Power Company
For: A gas distribution pipe line or lines and
appurtenances thereto
Affects: This and other property
SCHEDULE B - continued
File Number: 173639 Policy No. OX 08314641
4. EXCEPTIONS AND RESERVATIONS contained in Deed;
From: The United States of America
Recorded: September 29, 1960
Recording No.: 737559B
5. RESTRICTIONS contained on the face of said plat, but omitting any covenants or restrictions,
if any, based upon race, color, religion, sex, sexual orientation, familial status, marital status,
disability, handicap, national origin, ancestry, or source of income, as set forth in applicable
state or federal laws, except to the extent that said covenant or restriction is permitted by
applicable law.
6. EASEMENT including the terms, covenants and provisions thereof, for electric transmission
and /or distribution line, together with necessary appurtenances, as granted by instrument;
Recorded: March 27, 1989
Recording No.: 8903270228
In favor of: The Washington Water Power Company, a
corporation
Affects: This and other property
The exact location and extent of said easement is not disclosed of record.
COVENANTS, CONDITIONS, AND RESTRICTIONS in Declaration of Restrictions, but omitting
any covenants or restrictions, if any, based upon race, color, religion, sex, sexual orientation,
familial status, marital status, disability, handicap, national origin, ancestry, or source of
income, as set forth in applicable state or federal laws, except to the extent that said covenant
or restriction is permitted by applicable law;
Recorded: April 12, 1989
Recording No.: 8904120064
Executed by: James L. Hatfield, Connie Hatfield, J. Kent Hatfield
and J. Lynn Hatfield
8. EASEMENT delineated on the face of said plat;
For: Drainage and utilities
Affects: The Northerly 20 feet of said premises
END OF SPECIAL EXCEPTIONS
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A PORTION OF THE N E QUARTER OF SECTION 12 TOWNSHIP 25 NORTH RANGE 44 EAST, W.M.
THIS SKETCH IS FURNISHED FOR INFORMATIONAL PURPOSES
(� j� /� ►� ONLY TO ASSIST IN PROPERTY" LOCATION. DIMENSIONS ARE
SPOKA
NE DE ACREAGE OR SHAPETTHIS COMPANY NO
COUNTY N LIABILITY FOR LOSS INCURRED BY REASON OR RELIANCE
THEREON.
TITLE SPOKANE COUNTY TITLE COMPANY
326 -2626
"Service Is The Difference"
6. An enforcement action based on the exercise of a governmental police power not covered by Covered Risk 5 if a notice of the enforcement
action, describing any part of the Land, is recorded in the Public Records, but only to the extent of the enforcement referred to in that notice.
7. The exercise of the rights of eminent domain if a notice of the exercise, describing any part of the Land, is recorded in the Public Records.
8. Any taking by a governmental body that has occurred and is binding on the rights of a purchaser for value without Knowledge.
9. Title being vested other than as stated in Schedule A or being defective
(a) as a result of the avoidance in whole or in part, or from a court order providing an alternative remedy, of a transfer of all or any part of
the title to or any interest in the Land occurring prior to the transaction vesting Title as shown iii Schedule A because that prior transfer
constituted a fraudulent or preferential transfer under federal bankruptcy, state insolvency, or similar creditors' rights laws; or
(b) because the instrument of transfer vesting Title as shown in Schedule A constitutes a preferential transfer under federal bankruptcy,
state insolvency, or similar creditors' rights laws by reason of the failure of its recording in the Public Records
(i) to be timely, or
(ii) to impart notice of its existence to a purchaser for value or to a
judgment or lien creditor.
10. Any defect in or lien or encumbrance on the Title or other matter included in Covered Risks 1 through 9 that has been created or attached or has
been filed or recorded in the Public Records subsequent to Date of Policy and prior to the recording of the deed or other instrument of transfer in the
Public Records that vests Title as shown in Schedule A.
The Company will also pay the costs, attorneys' fees, and expenses incurred in defense of any matter insured against by this Policy, but only to the
extent provided in the Conditions.
EXCLUSIONS FROM COVERAGE
The following matters are expressly excluded from the coverage of
this policy, and the Company will not pay loss or damage, costs,
attorneys' fees, or expenses that arise by reason of:
(a) Any law, ordinance, permit, or governmental regulation
(including those relating to building and zoning) restricting,
regulating, prohibiting, or relating to
(i) the occupancy, use, or enjoyment of the Land;
(ii) the character, dimensions, or location of any
improvement erected on the Land;
(iii) the subdivision of land; or
(iv) environmental protection;
or the effect of any violation of these laws, ordinances, or govern-
mental regulations. This Exclusion 1(a) does not modify or limit the
coverage provided under Covered Risk 5.
(b) Any governmental police power. This Exclusion 1(b) does not
modify or limit the coverage provided under Covered Risk 6.
(b) not Known to the Company, not recorded in the Public
Records at Date of Policy, but Known to the Insured Claimant
and not disclosed in writing to the Company by the Insured
Claimant prior to the date the Insured Claimant became an
Insured under this policy;
(c) resulting in no loss or damage to the Insured Claimant;
(d) attaching or created subsequent to Date of Policy
(however, this does not modify or limit the coverage provided
under Covered Risk 9 and 10); or
(e) resulting in loss or damage that would not have been
sustained if the Insured Claimant had paid value for the Title.
4. Any claim, by reason of the operation of federal bankruptcy, state
insolvency, or similar creditors' rights laws, that the transaction
vesting the Title as shown in Schedule A, is
(a) a fraudulent conveyance or fraudulent transfer, or
(b) a preferential transfer for any reason not stated in Covered
Risk 9 of this policy.
7.. Rights of eminent domain. This Exclusion does not modify or limit
the coverage provided under Covered Risk 7 or 8.
3. Defects, liens, encumbrances, adverse claims, or other matters
(a) created, suffered, assumed, or agreed to by the Insured
Claimant;
5. Any lien on the Title hir real estate taxes or assessments imposed
by governmental authority and created or attaching between Date
of Policy and the date of recording of the deed or other instrument
of transfer in the Public Records that vests Title as shown in
Schedule A.
Page 2
CONDITIONS AND STIPULATIONS
1. DEFINITION OF TERMS purchase, lease, or lend if there is a contractual condition requiring
The following terms when used in this policy mean: the delivery of marketable title.
(a) "Amount of Insurance ": The amount stated in Schedule A, as may
be increased or decreased by endorsement to this policy, increased
by Section 8(b), or decreased by Sections 11 and 12 of these Conditions.
(b) "Date of Policy ": The date designated as "Date of Policy" in
Schedule A.
(c) "Entity ": A corporation, partnership, trust, limited liability
company, or other similar legal entity.
(d) "Insured': The Insured named in Schedule A.
(i) The term 'Insured' also includes
(A) successors to the Title of the Insured by operation of law as
distinguished from purchase, including heirs, devisees, survivors,
personal representatives, or next of kin;
(B) successors to an Insured by dissolution, merger, consolidation,
distribution, or reorganization;
(C) successors to an Insured by its conversion to another kind of
Entity;
(D) a grantee of an Insured under a deed delivered without
payment of actual valuable consideration conveying the Title
(1) if the stock, shares, memberships, or other equity
interests of the grantee are wholly -owned by the
named Insured,
(2) if the grantee wholly owns the named Insured,
(3) if the grantee is wholly -owned by an affiliated
Entity of the named Insured, provided the affiliated
Entity and the named Insured are both wholly -owned
by the same person or Entity, or
(4) if the grantee is a trustee or beneficiary of a trust
created by a written instrument established by the
Insured named in Schedule A for estate planning
purposes.
(ii) With regard to (A), (B), (C), and (D) reserving, however, all rights
and defenses as to any successor that the Company would have had
against any predecessor Insured.
(e) "Insured Claimant ": An Insured claiming loss or damage.
(f) "Knowledge" or "Known": Actual knowledge, not constructive
knowledge or notice that may be imputed to an Insured by reason of
the Public Records or any other records that impart constructive
notice of matters affecting the Title.
(g) "Land ": The laird described in Schedule A, and affixed improvements
that by law constitute real property. The term "Land" does not
include any property beyond the lines of the area described in
Schedule A, nor any right, title,'interest, estate, or easement in
abutting streets, roads, avenues, alleys, lanes, ways, or waterways,
but this does not modify or limit the extent that a right of access to
and from the Land is insured by this policy.
(h) 'Mortgage ' : Mortgage, deed of trust, trust deed, or other security
instrument, including one evidenced by electronic means authorized
by law.
(i) "Public Records': Records established under state statutes at
Date of Policy for the purpose of imparting constructive notice of
matters relating to real property to purchasers for value and without
Knowledge. With respect to Covered Risk 5(d), "Public Records"
shall also include environmental protection liens filed in the records
of the clerk of the United States District Court for the district where
the Land is located.
(j) "Title ": The estate or interest described in Schedule A.
(ki "Unmarketable Title ": Title affected by an alleged or apparent
matter that would permit a prospective purchaser or lessee of the
Title or lender on the Title to be released from the obligation to
CONTINUATION OF INSURANCE
The coverage of this policy shall continue in force as of Date of
Policy in favor of an Insured, but only so long as the Insured retains
an estate or interest in the Land, or holds an obligation secured by
a purchase money Mortgage given by a purchaser from the Insured,
or only so long as the Insured shall have liability by reason of
warranties in any transfer or conveyance of the Title. This policy
shall not continue in force in favor of any purchaser from the
Insured of either (i) an estate or interest in the Land, or (ii) an
obligation secured by a purchase money Mortgage given to the
Insured.
NOTICE OF CLAIM TO BE GIVEN BY INSURED CLAIMANT
The Insured shall notify the Company promptly in writing (i) in case
of any litigation as set forth in Section 5(a) of these Conditions, (ii)
in case Knowledge shall come to an Insured hereunder of any claim
of title or interest that is adverse to the Title, as insured, and that
might cause loss or damage for which the Company may be liable
by virtue of this policy, or (iii) if the Title, as insured, is rejected as
Unmarketable Title. If the Company is prejudiced by the failure of
the Insured Claimant to provide prompt notice, the Company's
liability to the Insured Claimant under the policy shall be reduced
to the extent of the prejudice.
PROOFOFLOSS
In the event the Company is unable to determine the amount of
loss or damage, the Company may, at its option, require as a condition
of payment that the Insured Claimant furnish a signed proof of loss.
The proof of loss must describe the defect, lien, encumbrance, or
other matter insured against by this policy that constitutes the
basis of loss or damage and shall state, to the extent possible, the
basis of calculating the amount of the loss or damage.
DEFENSE AND PROSECUTION OF ACTIONS
(a) Upon written request by the Insured, and subject to the options
contained in Section 7 of these Conditions, the Company, at its
own cost and without unreasonable delay, shall provide for the
defense of an Insured in litigation in which any third party asserts
a claim covered by this policy adverse to the Insured. This obligation
is limited to only those stated causes of action alleging matters
insured against by this policy. The Company shall have the right to
select counsel of its choice (subject to the right of the Insured to
object for reasonable cause) to represent the Insuied as to those
stated causes of action. It shall not be liable for and will not pay
the fees of any other counsel. The Company will not pay any fees,
costs, or expenses incurred by the Insured in the defense of those
causes of action that allege matters not insured against by this policy.
(b) The Company shall have the right, in addition to the options
contained in Section 7 of these Conditions, at its own cost, to
institute and prosecute any action or proceeding or to do any
other act that in its opinion may be necessary or desirable to
establish the Title, as insured, or to prPvPnt or redone loss or
damage to the Insured. The Company may take any appropriate
action under the terms of this policy, whether or not it shall be
liable to the Insured. The exercise of these rights shall not be an
admission of liability or waiver of any provision of this policy.
If the Company exercises its rights under this subsection, it must
do so diligently.
(c) Whenever the Company brings an action or asserts a defense
as required or permitted by this policy, the Company may pursue
the litigation to a final determination by a court of competent
jurisdiction, and it expressly reserves the right, in its sole
discretion, to appeal any adverse judgment or order.
Page 3
CONDITIONS AND STIPULATIONS (con't)
6. DUTY OF INSURED CLAIMANT TO COOPERATE
(a) In all cases where this policy permits or requires the Company
to prosecute or provide for the defense of any action or proceeding
and any appeals, the Insured shall secure to the Company the right
to so prosecute or provide defense in the action or proceeding,
including the right to use, at its option, the name of the Insured for
this purpose. Whenever requested by the Company, the Insured,
at the Company's expense, shall give the Company all reasonable
aid (i) in securing evidence, obtaining witnesses, prosecuting or
defending the action or proceeding, or effecting settlement, and
(ii) in any other lawful act that in the opinion of the Company may
be necessary or desirable to establish the Title or any other matter
as insured. If the Company is prejudiced by the failure of the
Insured to furnish the required cooperation, the Company's obligations
to the Insured under the policy shall terminate, including any
liability or obligation to defend, prosecute, or continue any litigation,
with regard to the matter or matters requiring such cooperation.
(b) fhe Company may reasonably require the Insured Claimant to
submit to examination under oath by any authorized representative
of the Company and to produce for examination, inspection, and
copying, at such reasonable times and places as may be designated
by the authorized representative of the Company, all records, in
whatever medium maintained, including books, ledgers, checks,
memoranda, correspondence, reports, e- mails, disks, tapes, and
videos whether bearing a date before or after Date of Policy, that
reasonably pertain to the loss or damage. Further, if requested by
any authorized representative of the Company, the Insured Claimant
shall grant its permission, in writing, for any authorized representative
of the Company to examine, inspect, and copy all of these records
in the custody or control of a third party that reasonably pertain to
the loss or damage. All information designated as confidential by
the Insured Claimant provided to the Company pursuant to this
Section shall not be disclosed to others unless, in the reasonable
judgment of the Company, it is necessary in the administration of
the claim. Failure of the Insured Claimant to submit for examination
under oath, produce any reasonably requested information, or
grant permission to secure reasonably necessary information from
third parties as required in this subsection, unless prohibited by
law or governmental regulation, shall terminate any liability of the
Company under this policy as to that claim.
7 OPTIONS TO PAY OR OTHERWISE SETTLE CLAIMS;
TERMINATION OF LIABILITY
In case of a claim under this policy, the Company shall have the
following additional options:
(a) To Pay or Tender Payment of the Amount of Insurance.
To pay or tender payment of the Amount of Insurance under this
policy together with any costs, attorneys' fees, and expenses
incurred by the Insured Claimant that were authorized by the
Company up to the time of payment or tender of payment and that
the Company is obligated to pay.
Upon the exercise by the Company of this option, all liability and
obligations of the Company to the Insured under this policy, other
than to make the payment required in this subsection, shall terminate,
including any liability or obligation to defend, prosecute, or contin-
ue any litigation.
(b) To Pay or Otherwise Settle With Parties Other Than the Insured
or With the Insured Claimant.
(i) To pay or otherwise settle with other parties for or in the
name of an Insured Claimant any claim insured against under this
policy. In addition, the Company will pay any costs, attorneys' fees,
and expenses incurred by the Insured Claimant that were authorized
by the Company up to the time of payment and that the Company is
obligated to pay; or
(ii) To pay or otherwise settle with the Insured Claimant the loss
or damage provided for under this policy, together with any costs,
attorneys' fees, and expenses incurred by the Insured Claimant that
were authorized by the Company up to the time of payment and that
the Company is obligated to pay.
Upon the exercise by the Company of either of the options provided
for in subsections (blli) or (ii), the Company's obligations to the Insured
under this policy for the claimed loss or damage, other than the
payments required to be made, shall terminate, including any liability
or obligation to defend, prosecute, or continue any litigation.
8. DETERMINATION AND EXTENT OF LIABILITY
This policy is a contract of indemnity against actual monetary loss or
damage sustained or incurred by the Insured Claimant who has suffered
loss or damage by reason of matters insured against by this policy.
(a) The extent of liability of the Company for loss or damage under
this policy shall not exceed the lesser of
(i) the Amount of Insurance; or
(ii) the difference between the value of the Title as insured and the
value of the Title subject to the risk insured against by this policy
(b) If the Company pursues its rights under Section 5 of these
Conditions and is unsuccessful in establishing the Title, as insured,
(i) the Amount of Insurance shall be increased by 10 %, and
(ii) the Insured Claimant shall have the right to have the loss or
damage determined either as of the date the claim was made by
the Insured Claimant or as of the date it is settled and paid.
(c) In addition to the extent of liability under (a) and (b), the Compary
will also pay those costs, attorneys" fees, and expenses incurred in
accordance with Sections 5 and 7 of these Conditions.
9. LIMITATION OF LIABILITY
(a) If the Company establishes the Title, or removes the alleged
defect, lien, or encumbrance, or cures the lack of a right of access
to or from the Land, or cures the claim of Unmarketable Title, all as
insured, in a reasonably diligent manner by any method, including
litigation and the completion of any appeals, it shall have fully
performed its obligations with respect to that matter and shall not
be liable for any loss or damage caused to the Insured.
(b) In the event of any litigation, including litigation by the Company
or with the Company's consent, the Company shall have no liability
for loss or damage until there has been a final determination by a
court of competent jurisdiction, and disposition of all appeals,
adverse to the Title, as insured.
(c) The Company shall not be liable for loss or damage to the
Insured for liability voluntarily assumed by the Insured in settling
any clairr or suit without the prior written consent of the Company.
10. REDUCTION OF INSURANCE; REDUCTION OR TERMINATION
OF LIABILITY
All payments under this policy, except payments made for costs,
attorneys' fees, and expenses, shall reduce the Amount of Insurance
by the amount of the payment.
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CONDITIONS AND STIPULATIONS (con't)
11. LIABILITY NONCUMULATIVE
The Amount of Insurance shall be reduced by any amount the Company
pays under any policy insuring a Mortgage to which exception is taken
in Schedule B or to which the Insured has agreed, assumed, or taken
subject, or which is executed by an Insured after Date of Policy and
which is a charge or lien on the Title, and the amount so paid shall be
deemed a payment to the Insured under this policy.
12. PAYMENT OF LOSS
When liability and the extent of loss or damage have been definitely
fixed in accordance with these Conditions, the payment shall be made
within 30 days.
13. RIGHTS OF RECOVERY UPON PAYMENT OR SETTLEMENT
(a) Whenever the Company shall have settled and paid a claim
under this policy, it shall be subrogated and entitled to the rights of
the Insured Claimant in the Title and all other rights and remedies
in respect to the claim that the Insured Claimant has against any
person or property, to the extent of the amount of any loss, costs,
attorneys' fees, and expenses paid by the Company. If requested
by the Company, the Insured Claimant shall execute documents to
evidence the transfer to the Company of these rights and remedies.
The Insured Claimant shall permit the Company to sue, compromise,
or settle in the name of the Insured Claimant and to use the name
of the Insured Claimant in any transaction or litigation involving
these rights and remedies.
If a payment on account of a claim does not fully cover the loss of
the Insured Claimant, the Company shall defer the exercise of its
right to recover until after the Insured Claimant shall have recovered
its loss.
(b) The Company's right of subrogation includes the rights of the
Insured to indemnities, guaranties, other policies of insurance, or
bonds. notwithstanding any terms or conditions contained in those
instruments that address subrogation rights.
14. ARBITRATION
Either the Company or the Insured may demand that the claim or
controversy shall be submitted to arbitration pursuant to the Title
Insurance Arbitration Rules of the American Land Title Association
( "Rules "). Except as provided in the Rules, there shall be no joinder
or consolidation with claims or controversies of other persons.
Arbitrable matters may include, but are not limited to, any controversy
or claim between the Company and the Insured arising out of or relating
to this policy, any service in connection with its issuance or the breach
of a policy provision, or to any other controversy or claim arising out of
the transaction giving rise to this policy. All arbitrable matters when
the Amount of Insurance is $2,000,000 or less shall be arbitrated at the
option of either the Company or the Insured. All arbitrable matters
when the Amount of Insurance is in excess of $2,000,000 shall be
arbitrated only when agreed to by both the Company and the Insured.
Arbitration pursuant to this policy and under the Rules shall be binding
upon the parties. Judgment upon the award rendered by the Arbitrator(s)
may be entered in any court of competent jurisdiction.
policy, this policy shall be construed as a whole.
(b) Any claim of loss or damage that arises out of the status of the
Title or by any action asserting such claim shall be restricted to this
policy.
(c) Any amendment of or endorsement to this policy must be in
writing and authenticated by an authorized person, or expressly
incorporated by Schedule A of this policy.
(d) Each endorsement to this policy issued at any time is made a
part of this policy and is subject to all of its terms and provisions.
Except as the endorsement expressly states, it does not (i) modify
any of the terms and provisions of the policy, (ii) modify any prior
endorsement, (iii) extend the Date of Policy, or (iv) increase the
Amount of Insurance.
16. SEVERABILITY
In the event any provision of this policy, in whole or in part, is held
invalid or unenforceable under applicable law, the policy shall be
deemed not to include that provision or such part held to be invalid, but
all other provisions shall remain in full force and effect.
17. CHOICE OF LAW, FORUM
(a) Choice of Law: The Insured acknowledges the Company has
underwritten the risks covered by this policy and determined the
premium charged therefor in reliance upon the law affecting interests
in real property and applicable to the interpretation, rights, remedies,
or enforcement of policies of title insurance of the jurisdiction
where the Land is located.
Therefore, the court or an arbitrator shall apply the law of the
jurisdiction where the Land is located to determine the validity of
claims against the Title that are adverse to the Insured and to
interpret and enforce the terms of this policy. In neither case shall
the court or arbitrator apply its conflicts of law principles to deter-
mine the applicable law.
(b) Choice of Forum: Any litigation or other proceeding brought by
the Insured against the Company must be filed only in a state or
federal court within the United States of America or its territories
having appropriate jurisdiction.
18. NOTICES, WHERE SENT
Any notice of claim and any other notice or statement in writing
required to be given to the Company under this policy must be given to
the Company at 400 Second Avenue South, Minneapolis,
Minnesota 55401 -2499.
15. LIABILITY LIMITED TO THIS POLICY; POLICY ENTIRE CON-
TRACT
(a) This policy together with all endorsements, if any, attached to it
by the Company is the entire policy and contract between the
Insured and the Company. In interpreting any provision of this
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