Title Insurance Coverage: Appeal While Case Still Pending

In certain cases a litigant in Texas may, with permission of the trial court, appeal a decision of the court while the case is still pending. This is called an “interlocutory appeal” and allowed in narrow circumstances.

Section 51.014(d) of the Texas Civil Practice and Remedies Code provides an exception to the general rule, allowing interlocutory appeal if (1) the order to be appealed involves a controlling question of law as to which there is a substantial ground for difference of opinion; and (2) an immediate appeal from the order may materially advance the ultimate termination of the litigation.

This occurred in the case of Stewart Title Guar. Co. v. Vantage Bank Texas, 04-15-00228-CV, 2015 WL 2124802 (Tex. App.—San Antonio May 6, 2015, no. pet. h.) where a lender filed suit to determine whether coverage existed under a mortgagee’s title insurance policy for losses incurred by the insured. The trial court found coverage after ruling on cross motions for summary judgment.

Stewart Title sought permission to appeal the interim decision that the trial court made and the trial court agreed to the appeal. The “controlling question of law” related to what the term “Public Records” meant with reference to a “February Notice” filed by a city not referenced in the opinion.

On appeal the San Antonio Court of Appeals held that the record must reflect the trial court’s determination of the specific legal issue presented for the appellate court to decide. . McCroskey v. Happy State Bank, 2014 WL 869577, at *1 (Tex.App.– Amarillo Feb. 28, 2014, no pet.) (mem.op.); Corp. of the President of the Church of Jesus Christ of Latter–Day Saints v. Doe, 2013 WL 5593441, at *2 (Tex.App.–Corpus Christi Oct. 10, 2013, no pet.) (mem.op.); Double Diamond Del, Inc. v. Walkinshaw, 2013 WL 5538814, at *2 (Tex. App.–Dallas Oct. 7, 2013, no pet.) (mem.op.) (“Inherent in these jurisdictional requirements is that the trial court make a substantive ruling on the specific legal question presented on appeal.”); Guzman, 390 S.W.3d at 597–98 (holding there must be something in record showing the trial court made a substantive ruling on any legal issues the court of appeals is asked to decide).

The court denied the interlocutory appeal because the trial court’s order and record on appeal was silent as to the specific basis for the trial court’s ruling and the court could not find the specific legal issue presented to the court for determination.

The court found that “[W]ithout a substantive ruling by the trial court on the specific ‘controlling question of law’ this court is asked to determine, this court must deny Stewart Title’s petition for permission to appeal.”

While not successful this case leaves open the possibility that in certain title insurance coverage questions there could be an immediate appeal if the trial court and opposing side agree and the parties provide sufficient record on appeal for the court to decide the issue.