B-145302, MAY 29, 1961

B-145302, MAY 29, 1961

TO MR. OSCAR HJELT, AUTHORIZED CERTIFYING OFFICER, BUREAU OF RECLAMATION:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 8, 1961, AND ITS ENCLOSURES, REQUESTING AN ADVANCE DECISION AS TO WHETHER PAYMENT PROPERLY MAY BE MADE TO THE COLUMBIAN TITLE COMPANY, AUTHORIZED AGENT FOR LAWYERS TITLE INSURANCE CORPORATION, EPHRATA, WASHINGTON, IN THE SUM OF $201.75 REPRESENTING A BALANCE CLAIMED DUE FOR CERTIFICATE OF TITLE G-2195, AND THE SUM OF $35 FOR SUPPLEMENTAL TITLE CERTIFICATE DATED NOVEMBER 10, 1960, FURNISHED UNDER CONTRACT NO. 14-06-116-5319 COVERING THE PROCUREMENT OF ABSTRACT SERVICE BY THE BUREAU OF RECLAMATION. DOUBT AS TO WHETHER THE AMOUNTS CLAIMED ARE PAYABLE UNDER THE PROVISIONS OF THE CONTRACT HAS BEEN RAISED BY THE FIELD SOLICITOR OF THE DEPARTMENT OF THE INTERIOR.

THE INFORMATION AND DATA SUBMITTED WITH YOUR LETTER SHOWS THAT THE SERVICES INVOLVED WERE REQUIRED BY THE BUREAU IN CONNECTION WITH THE ACQUISITION FROM THE HEIRS OF JOSEPH ENZLER, DECEASED, OF RIGHTS OF WAY FOR IRRIGATION CANALS AND DRAINS ON TRACT 10082 IRRIGATION BLOCKS 86 AND 87 IN GRANT COUNTY, WASHINGTON. AN OFFER TO PURCHASE THE NECESSARY RIGHTS OF WAY WAS MADE TO JOSEPH A. ENZLER ON MAY 10, 1954, AND AFTER CONSIDERABLE CORRESPONDENCE WITH ATTORNEYS FOR THE ENZLER HEIRS A CONTRACT, NO. 14-06-116-5376, SPECIFYING A CONSIDERATION OF $819 WAS SIGNED ON NOVEMBER 30, 1955, BY JOSEPH W. ENZLER AS ATTORNEY IN FACT FOR THE HEIRS. AN ORDER FOR A PRELIMINARY TITLE REPORT WAS RECEIVED BY THE COLUMBIAN TITLE COMPANY ON JULY 13, 1956, AND PRELIMINARY CERTIFICATE OF TITLE G-2195 WITH ATTACHED SCHEDULES A AND B DISCLOSING 15 SEPARATE OWNERSHIPS WAS ISSUED AUGUST 20, 1956, SPECIFYING A MAXIMUM LIABILITY OF $825 AND A PREMIUM OF ,$225--- COVERING 15 SEPARATE OWNERSHIPS $15.00 EACH MINIMUM RATE.'

THE BUREAU WAS UNABLE TO COMPLETE ACQUISITION OF RIGHTS OF WAY FROM THE ENZLERS AS CONTEMPLATED AND ON MARCH 30, 1960, THEIR ATTORNEY RECOMMENDED THAT ACQUISITION BE ACCOMPLISHED BY MEANS OF CONDEMNATION SINCE MOST OF THE LAND COVERED BY BUREAU CONTRACT NO. 14-06-116-5376 HAD BEEN DISPOSED OF BY THE ENZLERS WITHOUT RESERVING THE RIGHTS OF WAY FOR CONVEYANCE TO THE UNITED STATES AND HE HAD BEEN UNABLE TO SECURE QUITCLAIM DEEDS FROM THE NEW OWNERS. THEREAFTER THESE RIGHTS OF WAY WERE INCLUDED IN A CONDEMNATION ACTION BY THE BUREAU, CIVIL NO. 2014 NOW PENDING IN THE UNITED STATES DISTRICT COURT, SPOKANE, WASHINGTON. A CERTIFICATE OF TITLE FOR USE IN THE CONDEMNATION ACTION WAS ORDERED FROM THE COLUMBIAN TITLE COMPANY ON JUNE 24, 1960, AND FINAL CERTIFICATE NO. G-2195 WITH ATTACHED SCHEDULES A AND B OF 15 OWNERSHIPS WAS RECEIVED AUGUST 1, 1960, BEARING THE FOLLOWING NOTATION AS TO THE PREMIUM: "$225.00--- ORIGINAL REPORT ISSUED 8/20/56 CONTAINED 15 OWNERSHIPS AT $15.00 PER OWNERSHIP; UNDER 1957 CONTRACT TOTALS $225.00 PREMIUM. NO ADDITIONAL CHARGE FOR SUBJECT ADDITIONAL COMPLETE REPORT.'

THE PROPRIETY OF THE PREMIUM CHARGE WAS SUBMITTED BY THE CHIEF, REAL ESTATE BRANCH, TO THE FIELD SOLICITOR OF THE DEPARTMENT OF THE INTERIOR AT EPHRATA, WASHINGTON, WHO ADVISED THAT INASMUCH AS THE UNITED STATES HAD ORDERED 1 NOT 15 PRELIMINARY REPORTS, AND SINCE THE CONTRACT MADE NO MENTION OF AN ADDITIONAL CHARGE FOR MULTIPLE OWNERSHIPS IN A TRACT AND EXPRESSLY PROHIBITED ANY ADDITIONAL CHARGE FOR NON-CONTIGUOUS LANDS, SECTION 1 (SS), THE $225 PREMIUM CLAIMED ON THE BASIS OF THE NUMBER OF OWNERSHIPS IN THE TRACT WAS NOT A PROPER CHARGE; THAT THE AMOUNT PROPERLY PAYABLE UNDER THE CONTRACT WAS $23.25, THE SCHEDULED CHARGE FOR AN $825 COVERAGE. FOLLOWING RECEIPT OF PAYMENT IN THE SUM OF $23.25 WITH A COPY OF THE SOLICITOR'S OPINION, THE CONTRACTOR SUBMITTED A VOUCHER FOR THE BALANCE OF $201.75, CLAIMED DUE UNDER ITS ORIGINAL BILLING ON THE BASIS STATED IN ITS LETTER OF NOVEMBER 3, 1960.

THE "INVITATION, BID, AND AWARD" (STANDARD FORM 33) WHICH WAS PREPARED BY THE GOVERNMENT AND UPON ACCEPTANCE BECAME THE CONTRACT REQUESTED BIDS FOR ABSTRACT SERVICES FOR TRANSACTIONS IN GRANT COUNTY, WASHINGTON, AS REQUIRED BY THE BUREAU'S COLUMBIA BASIS PROJECT FROM JULY 1, 1956, TO JUNE 30, 1957, INCLUSIVE, TO BE FURNISHED IN ACCORDANCE WITH A PRESCRIBED SCHEDULE AND SAMPLE FORMS OF ,CERTIFICATE OF TITLE" AND "SCHEDULE A AND SCHEDULE B" INCORPORATED IN THE CONTRACT. ITEMS 1, 2 AND 4 OF THE CONTRACT SCHEDULE PROVIDED IN PERTINENT PART AS FOLLOWS:

"1. PREPARATION AND DELIVERY OF PRELIMINARY TITLE REPORTS, INCLUDING CERTIFICATES OF TITLE ON PRESCRIBED FORM.

"EACH PRELIMINARY TITLE REPORT AND/OR CERTIFICATE OF TITLE SHALL BE EXECUTED AND SUBMITTED IN DUPLICATE ON THE CERTIFICATE OF TITLE FORM ATTACHED HERETO, IT BEING UNDERSTOOD THAT THE CERTIFICATES OF TITLE FURNISHED SHALL BE THOSE OF A TITLE INSURANCE COMPANY AUTHORIZED TO DO BUSINESS IN THE STATE OF WASHINGTON AND SATISFACTORY TO THE UNITED STATES, EXECUTED BY THE CONTRACTOR AS AGENT, AND HAVING THE SEAL OF SAID TITLE INSURANCE COMPANY AFFIXED THERETO BY ORIGINAL IMPRESSION.

ESTIMATED "/A) UP TO LIABILITY OF $250.00 120 EA. $15.00 $1,800.00 "/B) $251.00 TO LIABILITY OF $500.00 50 EA. $20.00 $1,000.00

* * * * * * * "/SS) ADDITIONAL CHARGE FOR

CERTIFICATE OF TITLE

COVERING NON-CONTIGUOUS

LAND IN THE SAME SECTION

OR BLOCK IN A TOWN PLAT. 2 EA. $ 0.00 $ 00.00 "/TT) ADDITIONAL CHARGE IF THERE

IS, SUBSEQUENT TO THE

PRELIMINARY REPORT, ONE

OR MORE TRANSFERS OF

OWNERSHIP PRIOR TO THE

ISSUANCE OF THE FINAL

CERTIFICATE OF TITLE. 240 EA. $ 0.00 $ 00.00

* * * * * * * "2. FURNISHING TRACT OWNERSHIP

DATA REPORT. REPORT SHALL

INCLUDE LEGAL DESCRIPTIONS

AND THE NAME AND ADDRESS OF

THE LAST GRANTEE IN THE CHAIN

OF TITLE, AND IF THAT

ADDRESS IS NOT OBTAINABLE,

THE NAME AND ADDRESS OF THE

PARTY PAYING TAXES THEREON AS

SHOWN BY THE RECORDS IN THE

OFFICE OF THE COUNTY

TREASURER. A TRACT SHALL MEAN

CONTIGUOUS LAND IN ONE

OWNERSHIP IN ONE SECTION OR

IN ONE BLOCK, IN CASES WHERE

THE LAND HAS BEEN SURVEYED

OR MAPPED AND CONVEYED BY

LOTS AND BLOCKS. 20 REPORT $ 1.00 $ 20.00" "4. PREPARATION AND DELIVERY OF

SUPPLEMENTAL TITLE REPORTS.

FURNISH SUPPLEMENTAL TITLE

REPORTS PRIOR TO DELIVERY

OF A CERTIFICATE OF

TITLE: "/A) WITHIN SIX (6) MONTHS

FROM THE DATE OF THE

PRELIMINARY TITLE

REPORT 10 EA. $ 2.50 $ 25.00 "/B) SUBSEQUENT TO SIX (6)

MONTHS FROM THE DATE

OF THE PRELIMINARY TITLE

REPORT. 2 EA. $ 2.50 $ 5.00"

IN ITS LETTER OF NOVEMBER 3, 1960, TRANSMITTING THE VOUCHER THE CONTRACTOR STATED THAT PRIOR TO THE ISSUANCE OF THE PRELIMINARY TITLE REPORT "IT WAS POINTED OUT THAT THIS ORDER WAS IN REALITY AN ORDER FOR FIFTEEN SEPARATE CERTIFICATES AS THE PROPERTY COVERED WAS IN FIFTEEN SEPARATE OWNERSHIPS INVOLVING FIFTEEN SEPARATE DESCRIPTIONS AND FIFTEEN SEPARATE SCHEDULES B, ALL CONSOLIDATED IN ONE.' ADVICE WAS RECEIVED FROM THE LAND DIVISION, IT IS STATED IN THE LETTER, THAT "THEY STILL WANTED ONLY ONE CERTIFICATE AS THEY HOPED BY USE OF POWERS OF ATTORNEY TO CONSOLIDATE THIS FILE SO ONLY ONE SUBMISSION TO THE DEPARTMENT OF JUSTICE WOULD BE REQUIRED.' ON THIS BASIS A PRELIMINARY CERTIFICATE WAS PREPARED SETTING OUT THE SEPARATE OWNERSHIPS BY PARCELS AND RELATING THE PARAGRAPHS OF THE SCHEDULE B TO THE PARCELS. AFTER THE ORIGINAL PRELIMINARY CERTIFICATE WAS ISSUED, HOWEVER, IT BECAME APPARENT THAT THE FILE COULD NOT BE CONSOLIDATED FOR COMPLETION BY PURCHASE ON JUNE 24, 1960, AND A NEW REQUEST WAS RECEIVED FOR A CERTIFICATE TO BE USED IN A CONDEMNATION ACTION. THE CONTRACTOR ALLEGES THAT THE REPORTS AND THE CERTIFICATE OF TITLE CONTEMPLATED BY THE CONTRACT RELATE TO THE OWNERSHIPS BY AN INDIVIDUAL; THAT THE PREMIUM IS THEN RELATED TO THE AMOUNT OF THE LIABILITY AND THE ADDITIONAL CHARGES ARE FOR ADDITIONAL SERVICES; THAT ESTABLISHED PRACTICE AND THE STANDARD FORM OF THE CERTIFICATE "AS WELL AS THE SPECIAL PARAGRAPH OF THE BID, ALL BEAR THIS OUT.' THE CONTRACTOR STATED IN ADDITION THAT "THE BID AND THE CONTRACT ARE DRAWN WITH PROPER REGARD TO THE SCHEDULE OF INSURANCE RATES FILED WITH THE INSURANCE COMMISSIONER, A COPY OF WHICH IS ATTACHED, AND WHILE THIS RATE SCHEDULE WILL NOT ALTER THE TERMS OF THE CONTRACT, IT WILL SERVE TO INDICATE THE THINKING AND INTENTIONS OF THE PARTIES AND WILL AID THE INTERPRETATION OF THE CONTRACT ON DISPUTED ITEMS.' IT IS URGED BY THE CONTRACTOR THAT IF THIS WERE NOT SO,"THE BUREAU COULD REQUEST ONE CERTIFICATE ON ALL THE LAND IN GRANT COUNTY AND PAY ONLY ONE PREMIUM BASED ONLY ON THE TOTAL AMOUNT OF INSURANCE ISSUED.'

BY A FURTHER STATEMENT DATED NOVEMBER 10, 1960, THE CONTRACTOR SUBMITTED ITS BILL OF $35 ALSO DETERMINED ON THE BASIS OF OWNERSHIP,I.E., 14 OWNERSHIPS AT $2.50 EACH, COVERING SUPPLEMENTAL CERTIFICATE NO. 2, ISSUED AT THE REQUEST OF THE UNITED STATES ATTORNEY FOR USE IN THE PENDING CONDEMNATION ACTION.

A CONTRACT FOR GUARANTEEING A TITLE IS ONE OF INSURANCE AND AS POINTED OUT IN PRUDENTIAL V. BENJAMIN (1946), 328 U.S. 408, BY THE PASSAGE OF THE MCCARRAN ACT, 15 U.S.C. 1011, ET SEQ., CONGRESS HAS GIVEN SUPPORT TO STATE SYSTEMS FOR REGULATING THE BUSINESS OF INSURANCE. CF. AMERICAN HOSPITAL AND LIFE INSURANCE COMPANY V. FEDERAL TRADE COMMISSION, C.C.A. 5, 1957, 243 F.2D 719. IT IS ALMOST UNIVERSALLY RECOGNIZED THAT IN THE EXERCISE OF ITS POWER A STATE HAS THE RIGHT TO PRESCRIBE REASONABLE CONDITIONS PREREQUISITE TO CARRYING ON THE BUSINESS OF INSURANCE INCLUDING THE POWER TO REGULATE INSURANCE RATES AND, GENERALLY SPEAKING, INSURANCE CONTRACTS ARE GOVERNED BY THE SAME RULES OF CONSTRUCTION AS OTHER CONTRACTS. SEE 29 AM.JUR., INSURANCE, SECTIONS 14, 31, 49, 58, AND 245; ALSO DE CARLI V. O- BRIEN, OREGON SUPREME COURT, 1935, 41 P.2D 411; WILLINGHAM V. LIFE AND CASUALTY INSURANCE COMPANY, C.C.A. 5, 1954, 216 F.2D 226; BOEING AIRPLACE CO. V. FIREMEN'S FUND INDEMNITY CO., WASHINGTON SUPREME COURT, 1954, 268 P.2D 654, AND THE OTHER CASES COLLECTED IN THE ANNOTATIONS 63 A.L.R. 771 AND 100 A.L.R. 1458.

THE REVISED CODE OF WASHINGTON, CHAPTER 48.29, TITLE INSURERS, SECTION 49.29.140, RELATING TO PREMIUM RATES PROVIDES AS FOLLOWS:

"48.29.140 PREMIUM RATES. (1) PREMIUM RATES FOR THE INSURING OR GUARANTEEING OF TITLES SHALL NOT BE EXCESSIVE, INADEQUATE, OR UNFAIRLY DISCRIMINATORY.

"/2) EACH TITLE INSURER SHALL FORTHWITH FILE WITH THE COMMISSIONER A SCHEDULE SHOWING THE PREMIUM RATES TO BE CHARGED BY IT. EVERY ADDITION TO OR MODIFICATION OF SUCH SCHEDULE OR OF ANY RATE THEREIN CONTAINED SHALL LIKEWISE BE FILED WITH THE COMMISSIONER, AND NO SUCH ADDITION OR MODIFICATION SHALL BE EFFECTIVE UNTIL EXPIRATION OF FIFTEEN DAYS AFTER DATE OF SUCH FILING.

"/3) THE COMMISSIONER MAY ORDER THE MODIFICATION OF ANY PREMIUM RATE OR SCHEDULE OF PREMIUM RATES FOUND BY HIM AFTER A HEARING TO BE EXCESSIVE, OR INADEQUATE, OR UNFAIRLY DISCRIMINATORY. NO SUCH ORDER SHALL REQUIRE RETROACTIVE MODIFICATION. (1947 C. 79 SEC. .29.14; REM.SUPP. 1947 SEC. 45.29.14)"

EXAMINATION OF THE SCHEDULE OF INSURANCE RATES WHICH THE CONTRACTOR HAS STATED WERE FILED WITH THE STATE INSURANCE COMMISSIONER DISCLOSES THAT THESE RATES ARE SUBSTANTIALLY THE SAME AS THOSE SET OUT IN THE CONTRACT. ADDITIONAL PROVISIONS MATERIAL TO THE APPLICATION OF THE RATES WERE INCLUDED IN THIS SCHEDULE BUT WERE NOT INCLUDED IN THE CONTRACT, HOWEVER, AS FOLLOWS:

"-SPECIFIC APPLICATION OF RATES'

"NON-CONTIGUOUS PROPERTY AND DIFFERENT OWNERSHIPS:

"WHEN THE POLICY IS TO COVER PROPERTY CONSISTING OF TWO OR MORE PARCELS OF LAND NOT ADJOINING, OR IS TO COVER TWO OR MORE ADJOINING PARCELS NOT IN ONE OWNERSHIP AT THE TIME OF APPLICATION OR EXAMINATION OF TITLE, EACH OF SUCH PARCELS SHALL BE RATED SEPARATELY, PROVIDED THE FOLLOWING SHALL BE RATED AS ONE PARCEL:

"/A) IMPROVED LOTS IN THE SAME ADDITION, SEPARATED BY AN ALLEY, BUT OTHERWISE CONTIGUOUS AND IMPROVED PARCELS IN THE SAME SECTION OR DONATION CLAIM SEPARATED BY AN ALLEY, BUT OTHERWISE CONTIGUOUS AND AT THE TIME OF APPLICATION OR EXAMINATION OF TITLE IN THE SAME OWNERSHIP;

"/B)UNIMPROVED LOTS IN THE SAME ADDITION, OR UNIMPROVED PARCELS IN THE SAME SECTION OR DONATION CLAIM, AND AT THE TIME OF APPLICATION IN THE SAME OWNERSHIP;

"/C) PROPERTY NOT ADJOINING, BUT AT THE TIME OF APPLICATION IN THE SAME OWNERSHIP AND USED IN CONNECTION WITH ONE RESIDENCE OR ONE FARM IN THE SAME ADDITION, AND/OR SECTION, AND/OR DONATION CLAIM; "/D) UNPLATTED LANDS IN THE SAME SECTION OR DONATION CLAIM INTERSECTED BY PUBLIC ROADS AND/OR RIGHTS OF WAY, BUT OTHERWISE CONTIGUOUS, AND IN THE SAME OWNERSHIP AT THE TIME OF APPLICATION.'

THUS, WHILE THE CONTRACT ITSELF DOES NOT INCLUDE PROVISIONS WHICH ADEQUATELY DESCRIBE THE APPLICATION OF THE STIPULATED FORMULA FOR DETERMINING THE PREMIUM CHARGES, NEVERTHELESS, CAREFUL CONSIDERATION OF THE PRESCRIBED STANDARD FORMS AND THE OTHER PROVISIONS OF THE CONTRACT AS A WHOLE IN THE LIGHT OF THE PREMIUM RATES AND THE PROVISIONS FOR THEIR APPLICATION CONTAINED IN THE SCHEDULE FILED WITH THE STATE INSURANCE COMMISSIONER, IN OUR OPINION, AMPLY SUPPORTS THE CONTRACTOR'S CONTENTIONS THAT THE PREMIUMS WERE TO BE BASED ON THE VALUATION OF EACH PARCEL HELD IN ONE OWNERSHIP AT THE TIME OF APPLICATION OR EXAMINATION OF THE TITLE. CF. 29 COMP. GEN. 180. THE ALLEGATIONS OF THE CONTRACTOR THAT THE PROPERTY INVOLVED WAS IN 15 SEPARATE OWNERSHIPS WHEN THE ORDER FOR THE PRELIMINARY TITLE REPORT WAS ISSUED BUT THAT ONE CONSOLIDATED CERTIFICATE WAS REQUESTED ARE NOT DISPUTED, AND IT THEREFORE SEEMS REASONABLE TO CONCLUDE THAT THE PREMIUM CLAIMED OF $15 ON EACH PARCEL SEPARATELY OWNED HAVING A VALUATION UP TO $250 AS SPECIFIED IN ITEM 1 (A), OR A TOTAL PREMIUM OF $225 FOR THE 15 PARCELS COVERED BY THE ORDER, IS DUE UNDER THE CONTRACT. FOR SIMILAR REASONS WE BELIEVE THAT A PREMIUM OF $35 IS DUE FOR SUPPLEMENTAL CERTIFICATE NO. 2 WHICH CONSOLIDATED 14 SEPARATELY OWNED PARCELS.

YOU ARE ACCORDINGLY ADVISED THAT PAYMENT OF THE SUMS CLAIMED IN THE AMOUNTS OF $201.75 AND $35, OR A TOTAL OF $236.75, IS AUTHORIZED IF OTHERWISE CORRECT.