31A-41-301. Procedure for making a claim against the fund.
(1) (a) To bring a claim against the fund a person shall notify the department within 30
business days of the day on which the person files an action against a title insurance licensee
alleging the following related to a title insurance transaction:
(i) fraud;
(ii) misrepresentation; or
(iii) deceit.
(b) The notification required by Subsection (1)(a) shall be:
(i) in writing; and
(ii) signed by the person who provides the notice.
(c) Within 30 days of the day on which the department receives a notice under
Subsection (1)(a), the department may intervene in the action described in Subsection (1)(a).
(2) (a) Subject to the other provisions in this section, a person who provides the notice
required under Subsection (1) may maintain a claim against the fund if:
(i) in an action described in Subsection (1), the person obtains a final judgment in a court
of competent jurisdiction in this state against a title insurance licensee;
(ii) all proceedings including appeals related to the final judgment described in
Subsection (2)(a)(i) are at an end; and
(iii) the person files a verified petition in the court where the judgment is entered for an
order directing payment from the fund for the uncollected actual damages included in the
judgment and unpaid.
(b) A court may not direct the payment from the fund of:
(i) punitive damages;
(ii) attorney fees;
(iii) interest; or
(iv) court costs.
(c) Regardless of the number of claimants or parcels of real estate involved in a single
real estate transaction, the liability of the fund may not exceed:
(i) $15,000 for a single real estate transaction; or
(ii) $50,000 for all transactions of a title insurance license.
(d) A person shall:
(i) serve the verified petition required by Subsection (2)(a) on the department; and
(ii) file an affidavit of service with the court.
(3) (a) A court shall conduct a hearing on a petition filed with the court within 30 days
after the day on which the department is served.
(b) The person who files the petition may recover from the fund only if the person shows
all of the following:
(i) the person is not a spouse of the judgment debtor or the personal representative of the
spouse;
(ii) the person complied with this chapter;
(iii) the person has obtained a final judgment in accordance with this section indicating
the amount of the judgment awarded;
(iv) the amount still owing on the judgment at the date of the petition;
(v) (A) the person has had a writ of execution issued under the judgment, and the officer
executing the writ has returned showing that no property subject to execution in satisfaction of
the judgment could be found; or
(B) that the amount realized upon the execution levied against the property of the
judgment debtor is insufficient to satisfy the judgement;
(vi) the person has made reasonable searches and inquiries to ascertain whether the
judgment debtor has any interest in property, real or personal, that may satisfy the judgment; and
(vii) the person has exercised reasonable diligence to secure payment of the judgment
from the assets of the judgment debtor.
(4) If the person described in Subsection (3) satisfies the court that it is not practicable
for the person to comply with one or more of the requirements in Subsections (3)(b)(v) through
(vii), the court may waive those requirements.
(5) (a) A judgment that is the basis for a claim against the fund may not have been
discharged in bankruptcy.
(b) If a bankruptcy proceeding is still open or is commenced during the pendency of the
claim, the person bringing a claim against the fund shall obtain an order from the bankruptcy
court declaring the judgement and debt to be nondischargeable.
Enacted by Chapter 220, 2008 General Session
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Last revised: Thursday, May 28, 2009