Such an interpretation is unreasonable. (See, Conway v. Title Ins. Co. (1973) 291 Ala. 76 [ 277 So.2d 890]; In re Wiltse Brothers Corporation (6th Cir. 1966) 357 F.2d 190.) With regard to the term "created" the court in Hansen v. Western Title Ins. Co. (1963) 220 Cal.App.2d 531, 535-536 [ 33 Cal.Rptr. 668, 98 A.L.R.2d 520], in interpreting a title policy, said, ". . .
Other courts have considered similar clauses and have held that this type of clause insulates the insurer from liability where the alleged loss resulted from the insured's own intentional misconduct or inequitable dealings. See Taussig v. Chicago Title Trust Co., 171 F.2d 553 (7th Cir. 1948); Conway v. Title Ins. Co., 291 Ala. 76, 277 So.2d 890 (1973); Brick Realty Corporation v. Title Guarantee Trust Co. 161 Misc. 296, 291 N.Y.S. 637 (1936). By failing timely to raise the issue of the discrepancy between the piece of land they intended to buy and the piece of land they in fact bought, the plaintiffs agreed to receive a defective deed.
Valley Bank cites a number of cases in support of its proposition. See, e.g., American Sav. Loan Ass'n v. Lawyers Title Ins. Corp., 793 F.2d 780 (6th Cir. 1986); Brown v. St. Paul Title Ins. Corp., 634 F.2d 1103 (8th Cir. 1980); Taussig v. Chicago Title Trust Co., 171 F.2d 553 (7th Cir. 1948); Conway v. Title Ins. Co., 291 Ala. 76, 277 So.2d 890 (1973); Ginger v. American Title Ins. Co., 29 Mich. App. 279, 185 N.W.2d 54 (1971); Feldman v. Urban Commercial, Inc., 87 N.J. Super. 391, 209 A.2d 640 (1965). After reviewing these cases, we find they are all either factually distinguishable from this case, or do not support Valley Bank's proposition. For instance, in American Savings and Loan, the Sixth Circuit Court of Appeals declared that an insured "creates" a defect if the lien "`resulted from some intentional misconduct or . . . the insured either expressly or impliedly . . . agreed to the defects . . . in the course of purchasing the property involved.'"
On the other hand, where the insured has been involved in a fraudulent or unconscionable scheme, recovery should be denied based on similar policy language. See, e.g., Keown v. West Jersey Title and Guaranty Company, 161 N.J. Super. 19, 390 A.2d 715 (1978); Conway v. Title Insurance Co., 291 Ala. 76, 277 So.2d 890 (1973); Feldman v. Urban Commercial, Inc., 87 N.J. Super. 391, 209 A.2d 640 (1965); Taussig et al. v. Chicago Title Trust Co., 171 F.2d 553 (7th Cir. 1948); First Nat'l Bank Trust Co. v. New York Title Insurance Company, 171 Misc. 854, 12 N.Y.S.2d 703 (1939). The precise meaning of the phrase "created, suffered, assumed or agreed to" has been considered in the recent case of Arizona Title Insurance Trust Company v. Smith, supra.
' Accord, Conway v. Title Insurance Co., 291 Ala. 76, 277 So.2d 890; Glickman v. Home Title Guaranty Co., 15 Misc.2d 167, 178 N.Y.S.2d 281, affirmed, 8 A.D.2d 629, 185 N.Y.S.2d 756. The trial court found that the defendant had made a search of the record and from that search had determined that there was a cloud on the title of defendant's property.
First National Bank Trust Co. v. New York Title Ins. Co., 171 Misc. 854, 12 N.Y.S.2d 703 (Sup.Ct. 1939), cited in Annotation, 98 A.L.R.2d 527, 530 (1964). All the other cases that were found interpreting this clause involved some fraudulent or inequitable behavior by the insured and, accordingly, he was found to have created the defect: Ginger v. American Title Ins. Co., 29 Mich. App. 279, 185 N.W.2d 54, 56 (Ct.App. 1970) (insured took title fraudulently to assist in evasion of grantors creditors); Conway v. Title Ins. Co., 291 Ala. 76, 277 So.2d 890, 892 (Sup.Ct. 1973) (insured kept occupant of property from discovering how to clear his title and she knew of this defect); Lawyers Title Ins. Corp. v. Research Loan Invest. Corp., 361 F.2d 764, 769 (8 Cir. 1966) (insureds had knowledge of specific improvements made to the property by previous owners and should have assumed there were encumbrances from the financing of them and insureds by deed assumed all encumbrances); Taussig v. Chicago Title T. Co., 171 F.2d 553 (7 Cir. 1948), cited in Annotation, 98 A.L.R.2d 527, 528 (1964) (insured cotrustee had acted in bad faith and managed to become the sole beneficiary of one trust); Rosenblatt v. Louisville Title Co., 218 Ky. 714, 292 S.W. 333 (Ct.App. 1927), cited in Annotation, 98 A.L.R.2d 527, 528 (1964) (insured had used undue influence and fraud to gain title); Brick Realty Corp. v. Title Guarantee Trust Co., 161 Misc. 296, 291 N.Y.S. 637 (N.Y.C. Ct. Sp. Term 1936), cited in Annotation, 98 A.L.R.2d 527, 529 (1964) (insured had allegedly been involved
It was there held that the defect in title was due to an illegal act of the insured, grantee, and the risk was not covered by the title policy. Other cases holding in similar fashion include Conway v. Title Ins. Co., 291 Ala. 71, 277 So.2d 890 (1973) (intentional concealment and oppression of creditor); Ginger v. American Title Ins. Co., 29 Mich. App. 279, 185 N.W.2d 54 (App.Ct. 1971) (fraud); Parker v. Title Trust Co., 233 Fd. 505 2d (9 Cir. 1956) (entrapment and conspiracy). On the other hand, a defect which is brought about by some accidental or innocent conduct of the insured and which was not intended to have the effect of casting a cloud upon his title has not been considered as having been "created or suffered" by the insured.