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Name Variations that Definitely Must Be Searched
Slade Smith
   

Most experienced title searchers would probably agree that name variations often must be searched in order to perform a competent title search by name. Beyond that, however, a Colorado Supreme Court case demonstrates that in a particular state, it may be settled law that searchers must search certain types of names in a certain way.

A couple purchased a condominium and took title on the warranty deed as “T. Grady Merritt and Patrice Merritt.” A creditor obtained a judgment against the husband in another state but the judgment was obtained only in the name of “Grady Merritt.” The creditor properly filed the judgment in the county where the condominium was located, but again, the judgment was only registered under the name “Grady Merritt.”

T. Grady Merritt later conveyed his share of the property to Patrice via a quitclaim deed. Thereafter, Patrice sold the property to another party, who got title insurance. The title insurer did not include any exceptions to the policy for the judgment liens because it did not search the county records for the name “Grady Merritt.”

After that sale, the judgment creditor attempted to foreclose on their interest. Naturally, the buyers opposed the foreclosure. They claimed (through their title insurer) that they did not have notice of the judgment because the judgment under the name “Grady Merritt” was not in the chain of title of the property in the name of “T. Grady Merritt.” Litigation followed, which proceeded all the way to the Colorado Supreme Court. By the time the case got to the Colorado Supreme Court, the sole issue was whether recording a transcript of judgment with the judgment debtor named “Grady Merritt” provided constructive notice of the judgment to purchasers of property that was once owned in the name of “T. Grady Merritt.”

While the creditor had made what could be viewed as a mistake—it failed to get their judgment in all the correct names of Mr. Merritt—the Colorado Supreme Court found that the title search should have found the judgment lien. The court found that a judgment is not only valid if it is filed under the proper name of a party, but also when it is filed under a name so similar or so frequently used as a substitute for the party’s proper name that it should qualify as notice of the judgment. Therefore, a slight deviation from a proper name of a party does not defeat notice, as long as the party is substantially identified. Variations in names provide notice as long as they are spelled so that they appear in a part of the index which a title searcher must examine, and in a form that would inform the searcher that he or she needs to check that record to see if it matches the identity of the person being searched.

The court noted that traditionally, a person’s middle name had no legal importance. But the court observed that in modern times, when an individual uses an initial rather than a first name, his middle name carries more import. And by statute in Colorado, when a title insurer discovered a judgment that might encumber a property being searched, it was required to make a bona fide good faith effort to determine whether the person against whom the judgment was obtained was the same person as the person who held an interest in the property. Because of the apparent importance of a middle name when only a first initial is used, the court ruled that in that circumstance, the title searcher must also search on the middle name alone.

If the searcher had done so in this case, as the court ruled they should have done, they would have discovered the judgment against Mr. Merrritt. Therefore, the judgment was a valid and enforceable lien against the property, and the new buyer’s title insurance had to pay a claim to the buyer.



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