Do class D road maps filed with the county clerk constitute public records under title insurance policies? First American Title Insurance Company v. J.B. Ranch, Inc. Explained

In First American Title Insurance Company v. J.B. Ranch, Inc., the Utah Supreme Court addressed a fundamental question about the scope of title insurance coverage when public road claims arise from documents filed with county clerks rather than recorders.

Background and Facts

J.B. Ranch purchased property in Grand and San Juan Counties with a $2 million title insurance policy from First American. The policy excepted from coverage “easements, claims of easement or encumbrances which are not shown by the public records,” defining public records as “those records which by law impart constructive notice.” Grand County later claimed certain roads crossing the property were public roads, basing this claim on class D road maps filed with the county clerk’s office in 1978 under Utah Code Ann. 27-12-26. When First American refused to defend J.B. Ranch in the county’s declaratory judgment action, J.B. Ranch successfully defended at its own expense and then sought reimbursement.

Key Legal Issues

The court addressed three primary issues: whether insurance policy exceptions must be construed against the insurer; whether the policy’s “public records” definition included records that impart inquiry notice; and whether class D road maps filed with the county clerk constitute public records that impart constructive notice.

Court’s Analysis and Holding

The court held that insurance contracts are construed against the insurer only when ambiguous, rejecting J.B. Ranch’s broad assertion of presumption favoring coverage. Regarding constructive notice, the court distinguished between notice arising from records themselves versus inquiry notice arising from knowledge of facts requiring further investigation. The policy’s definition requiring records that “by law impart constructive notice” encompassed only the former. Most significantly, the court held that absent express statutory language, records filed pursuant to statute do not impart constructive notice, following the principle that such notice is “entirely a creature of statute.”

Practice Implications

This decision establishes important boundaries for title insurance coverage and emphasizes the critical distinction between documents filed with county clerks versus recorders. Practitioners should carefully examine the specific statutory language governing any filed documents when analyzing potential title defects, as filing alone does not create constructive notice without express legislative intent.