Presidents Report

Cindy_GuanellDear ILTA Members,

The Pacific Northwest Land Title Convention is just around the corner on September 9-11, 2016 in Sunriver, Oregon. This convention marks my transition into the office of Past President of the Idaho Land Title Association (“ILTA”). It has been a pleasure and an honor to serve this term as ILTA President. I would like to extend my appreciation to the other sitting Board members and the ILTA Executive Director for their support, collabo-ration, professionalism, dedication and commitment as we worked together to represent the ILTA membership. I would also like to extend a huge thank you to all of the ILTA Committee Chairs and members for their dedication, time commitment, and excellent ser-vice as they donate their time and expertise at no charge for the benefit of the entire membership.

It has been a busy and productive year for the ILTA and I feel good about all that we have accomplished. The ILTA continued its success this term and is in solid financial con-dition. The Membership remains strong with 141 members consisting of 118 agents; 15 associates and 8 underwriters. The PAC Committee chaired by J.T. Jacobsen and Denise Potts collected $6,103 for the Idaho Political Action Committee (“IPAC”). ILTA contrib-uted $9,000 to the Idaho Primary and General Elections leaving a current IPAC Balance of $13,501.99.

We revamped the ILTA Education Seminar this year, starting with a new location at The Grove Hotel in Boise. The seminar was very successful with record attendance of 130 at-tendees. Several issues were addressed, including a discussion of TRID with a panel of experts; cyber security; claims, fraud and deception; case law review; e-recording; DOI rule changes to Rule 56 and closings out of county; as well as Justice Eismann’s key note on the judicial process. The happy hour, 50/50 raffle and silent auction following the first day of the seminar were also a success and raised $2,247 for IPAC. Lastly and new this year, we provided a video of the education seminar that members can view as time per-mits. The video is posted on the ILTA website through a YouTube link.

The Board voted to reinstate the legislative reception in 2017, which will follow the first night of the Education Seminar. Martin Bilbao has already booked the reception on the legislative calendar so good attendance is expected. The seminar attendees will be provid-ed with pertinent talking points to help them build relationships with elected officials. It is very important for us to make sure that legislators and all policy makers understand the benefits that consumers receive from the title insurance and settlement industry.

We continued our participation at the ALTA Federal Conference to be active with our federal legislators on discussing important issues. During this conference ILTA Board members met with Idaho Senators, Representatives and staffers to remind Congress about the unnecessary challenges and confusion brought by TRID and to educate Congress about the value of our industry.

The Board implemented a new scholarship program to increase education opportunities for the membership. The Board offered 4 scholarships of $250 each, to go toward registration and travel costs for the 2016 ILTA Education Seminar and two scholarships of $500 each, to go toward registration and travel costs for the 2016 Pacific Northwest Convention.

The Board approved an affiliation agreement with ALTA so that all ILTA members can obtain ALTA educational products at a discounted rate, such as Title 101 and Title 201. The paperwork is currently being processed and members should be eligible for discounts shortly.

The Board commented on the ALTA Best Practices amendments and sent a letter on behalf of the membership to ALTA about their proposed changes to Best Practices. A copy of this letter was provided to the membership and indi-vidual comments were encouraged to be submitted.

On the legislative front, we worked through the transition of a new full time lobbyist, Martin Bilbao at Gallatin Public Affairs. Martin did an excellent job representing ILTA and was instrumental in the successful passing of legislation that amended Idaho Code 45-1502.

Legislative Activities general summary:
· The industry issue that dominated the 2016 legislative session was the passing of legislation that amended Ida-ho Code 45-1502 to clarify the definition of “trustee” in the deed of trust statutes and to remedy the issues that arose from the Parkwest Supreme Court decision. It was only through the hard work of the ILTA Legislative Committee chaired by Hilary Vaughn and ILTA lobbyist Martin Bilbao, that this legislation passed and Gover-nor Otter signed the bill into Law on March 28, 2016. The law became effective July 1, 2016.
· An ILTA committee lead by Ric Eborall initiated communications with the Association of Counties (“AOC”) regarding flat recording fees. This is still in progress and moving forward. Draft language has been submitted to the AOC for comment.
· ILTA worked with the AOC and met with individual counties that have not implemented e-recording to en-courage all counties to participate. This is still in progress and moving forward.
· The Secretary of State’s Office e-signature/e-notary legislation continues to move forward. ILTA Legislative committee has a seat at the table and is actively reviewing and commenting on draft legislation in conjunction with the Revised Uniform Law on Notary Acts (“RULONA”).
· Changes to IDAHO ADMINISTRATIVE CODE IDAPA 18.01.56 (“Rule 56”). An ILTA committee lead by Cameron McFaddan was formed to determine necessary updates to Rule 56. The ILTA proposal was submitted to the DOI in June and the rule changes were published by the DOI as part of the negoti-ated rule making process. A hearing was held on August 17th at the DOI and was well attended both in person and via conference call. Comments and suggestions were made by Director Dean L. Cameron and the membership, and negotiated changes will be made.
· ILTA has been following proposed oil & gas legislation. This is currently quiet but ILTA will continue to monitor.
Last but not least, the ILTA hosted the final 5 state convention in Coeur d’ Alene Idaho last August. The con-vention was very successful and delivered a profit so we were able to make a distribution to all 5 state associa-tions that participated. Going forward the convention will return to a tri state convention with Idaho, Washing-ton and Oregon.

In closing, if you haven’t registered for the Pacific Northwest Land Title Convention in Sunriver, Oregon, I en-courage you to do so. This is a great opportunity to collaborate with other industry professionals about the changes our industry is facing. I hope to see you in September!
Thank you all again for your support and hard work!

Best regards,
Cindy Guanell
President, ILTA

Matt Ryden, Judiciary Chair

Greetings, Members.
The following is latest installment of title-related questions recently asked and answered by the Idaho Supreme Court.

Liberty Bankers v. Witherspoon, Idaho Supreme Court Docket No. 41993 (January 6, 2016)
This case, covered extensively at the ILTA Spring Education Seminar, is worthy of inclusion here because of the potential impact of the inapplicability of Idaho Code Section 45-108 (lien for future advances) to deeds of trust.

Facts: In this case, a law firm accepted a note secured by a deed of trust for payment of attorneys’ fees owing from a developer. The firm then subordinated its security interest in the development property to a lender’s deed of trust. Several years later, the lender and developer entered into a loan modification agreement (“LMA”) where-by the lender agreed to release 3 lots from its existing deed of trust, in exchange for a new note and deed of trust covering the 3 lots. However, neither a release nor a new deed of trust was recorded.

Claim: The law firm argued that as a result of the LMA, it had priority over the lender’s security interest in the 3 lots, and the trustee’s sale purchaser took the 3 lots subject to its security interest.

Holding: The lower court agreed with the law firm, citing Idaho Code Section 45-108, whereby “a lien may be created by contract, to take immediate effect, as security for the performance of obligations.” According to the district court, under this statute, the LMA itself created a new lien and released the 3 lots from the original deed of trust.

The Idaho Supreme Court disagreed, finding that the LMA expressly contemplated further action by the parties (such as recordation of a new Deed of Trust) before the release would be complete. Additionally, the court decid-ed that 45-108 does not apply to deeds of trust, but only to other types of liens. Importantly, Section 45-108 gen-erally makes provision for the priority of future advances, permitting such advances to relate back to the recording date of the original instrument in certain cases.

If extended beyond the scope of the question asked in the case (i.e. did a release occur?), this aspect of the Liberty Mutual decision raises potential unintended consequences for construction lending.

Tiller White, LLC v. Canyon Outdoor Media , Idaho Supreme Court Docket No. 43482 (June 28, 2016)
This case examines whether a purchaser of real property was a “good faith” purchaser entitled to statutory protec-tion against unrecorded interests in the acquired property. It interprets two key provisions within Idaho’s record-ing act, Idaho Code Sections 55-606 and 55-812.

Facts: In 2003, a property owner negotiated a lease agreement with a billboard company. The lease agreement allowed the owner to sell the billboard company an access easement for a lump sum in lieu of annual payments over the first 10 years. Shortly after entering into the lease, the billboard company made a lump sum payment to the owner and the parties executed an access easement agreement. In turn, the billboard company constructed a billboard on the property. However, neither the lease nor the easement agreement contained a legal description, and neither document was recorded.

In 2006, the owner sold the property to Tiller White, LLC by warranty deed with no restrictions. During the ne-gotiations for the sale, the seller provided Tiller with a copy of the billboard lease. The seller disclosed that he had accepted a lump sum payment, whereby annual payments would commence at the expiration of the initial 10-year term. The parties did not discuss the easement agreement. At closing, Tiller was issued a title policy that did not show the unrecorded easement.

Claim: Tiller sued the billboard company seeking a declaratory judgment that the access easement was unenforce-able. The district court granted summary judgment in Tiller’s favor on the ground that he did not have actual or constructive notice of the easement when he acquired the property.

Holding: According to the Idaho Supreme Court, Idaho Code Sections 55-606 and 55-812 together provide that “an unrecorded interest in land is void against subsequent purchasers who acquire title in good faith and for valua-ble consideration.”

The court recited several components of the “good faith” standard. The critical component of “good faith” is knowledge. Actual or constructive knowledge of an unrecorded interest renders a purchaser ineligible for statuto-ry protection against that interest. (Under 55-815, unrecorded instruments are valid against (i) the parties thereto and (ii) parties who have notice thereof.) Further, a good faith purchaser must make a reasonable initial investiga-tion of the property and further investigate of any obvious inconsistent claims to title.

Applying the foregoing legal tests, the court found Tiller was a good faith purchaser without knowledge of the easement, despite his awareness of the billboard, review of the lease agreement and knowledge of the lump sum payment. The billboard company argued that Tiller’s failure to further investigate these facts rendered Tiller ineli-gible for the protections afforded “good faith” purchasers. The court found insufficient evidence to conclude that Tiller knew that the lump sum payment was made in exchange for the easement agreement. Instead, the seller’s representation that the lump sum was a prepayment, together with the clear title report, gave Tiller reason-able basis to conclude that the property was not encumbered by an easement.

It is encouraging to see the Idaho Supreme Court strictly interpreting the recording statutes, rather than expanding exceptions to recording requirements. In this case, the billboard company had opportunity to protect its interest by recording an easement agreement.

2016 Idaho Primary Election Report

Martin Bilbao, Gallatin PA
ILTA Lobbyist
The 2016 legislative interim has once again been active for the Idaho Land Title Association. Along with issues such as oil and gas leases, electronic recording in all Idaho counties and potential electronic signature legislation, the ILTA has been actively working with the Idaho Association of Counties regarding legislation that would make for flat recording fees in the state. The ILTA legislative committee and board continues to work with the Coun-ties to ensure the legislation works for all parties involved. The proposed legislation will be introduced during the 2017 Idaho State Legislative Session.

Tuesday, November 8 is the 2016 General Election. All Idaho state legislators will be on the ballot on November 8. The 2016 Idaho Primary Election proved to be very successful for the ILTA as a majority of the candidates we supported were victorious.

The ILTA has once again provided campaign contributions to several key legislators and supporters of the indus-try. Following please find the list of legislators we are supporting during the 2016 General Election:

Sen. Kelly Anthon (R) District 27, Burley
Sen. Grant Burgoyne (D) District 16, Boise
Sen. Bart Davis (R) District 33, Idaho Falls
Sen. Maryanne Jordan (D) District 17, Boise
Sen. Patti Anne Lodge (R) District 11, Huston
Sen. Bob Nonini (R) District 3, Coeur d’Alene
Sen. Mary Souza (R) District 4, Coeur d’Alene
Rep. Robert Anderst (R) District 12, Nampa
Rep. Tom Dayley (R) District 21, Boise
Rep. Sage Dixon (R) District 1, Ponderay
Rep. John Gannon (D) District 17, Boise
Rep. Clark Kauffman (R) District 25, Filer
Rep. Lynn Luker (R) District 15, Boise
Rep. Luke Malek (R) District 4, Coeur d’Alene
Rep. Patrick McDonald (R) District 15, Boise
Rep. Christy Perry (R) District 11, Nampa
Rep. John Rusche (D) District 6, Lewiston
Rep. Janet Trujillo (R) District 33, Idaho Falls

Every election cycle has its own surprises and this year’s general election will be no different, especially considering it is a Presidential election and the nature of politics around the nation. It is always important that Idaho citizens vote during every election. This year is no different and the ILTA asks you to remember to vote, whether at the polls or by absentee ballot, to help support those candidates that support our industry. For more information about this year’s election or to request an absentee ballot, please visit the Idaho Secretary of State’s website at

Liaison and Convention Business Meeting

The next Liaison and Convention Business Meeting is Friday September 9 at 3:00 at the Sunriver Resort during convention. An important part of the convention is IPAC Fundraising. Your donations of silent auction items and cash donations are appreciated to ensure we have funds to support our legislative efforts.

Another important segment of the Friday, September 9 ILTA Business Meeting is the election of officers to serve for the coming year. If you are not able to attend and wish to vote in the election, you may do so by email-in vote. The nominated candidate list follows. If you wish to write in a non-listed candidate in any of the officer slots, please type the name in the indicated area.

The nominated slate of officers:
President – JT Jacobsen, Coeur d’ Alene ______
Write In Candidate – (Name) ____________________________
VP Southeast – Daryl Olsen, Idaho Falls ______
Write In Candidate – (Name) ____________________________
VP Southwest – Cameron McFaddan, Boise ______
Write In Candidate – (Name) _____________________________
VP Panhandle – Heather Wichman, Coeur d’ Alene ______
Write In Candidate – (Name) _____________________________
Sec/Treasurer – John Holt, Eagle ______
Write In Candidate – (Name) _____________________________
Past President – Cindy Guanell, Boise _____________________
Please remember that votes are per business membership. If you vote by Email-in, please sign below (typed signature) to certify your authorization to vote for your office membership.
Signature ______________________________

Another option to voting is to fill in the ballot and sign certifying authorization and have someone hand deliver the ballot to the business meeting prior to 3:00pm on Friday, Septem-ber 9, 2016.

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