by William J. McAuliffe, Jr.
It is interesting to note that many of the challenges the American Title Association faced from 1958 to 1968 involve things the association has worked on or revisited in the 50 years since then. This article picks up on the Historical Highlights of ALTA®’s first 50 years printed in the January/February issue.In 1958 we were called the American Title Association (our name changed from the American Association of Title Men in 1924), and we had 2,379 members who were abstracters, attorneys, law firms, or title insurance companies. Active members were members of either the Title Insurance Section, for a title insurer or a bona fide agent of a title insurer, or the Abstracters Section, for those who provided an abstracting service whether or not he was an agent of a title insurer. Each conducted separate meetings during both the Mid-Winter and Annual meetings. Not much different than today’s association makeup, although membership has grown substantially since then.
Challenges & Achievements
It would be difficult to outline every accomplishment during this decade, so I shall mention some of the top challenges and achievements and how ATA was involved.
Relations With Bar Associations
By far the biggest challenge of this decade was the desire by the American Bar Association to enter the title business. The issue of bar-related title insurance companies first surfaced at the 1959 Mid-Winter Conference when executive vice president Jim Sheridan informed the Board of Governors about “rumblings relating to investigations by state bar associations into the general subject of entrance into the field of title insurance.”
In 1960 members were concerned about the spread of title insurance companies sponsored by state bar associations. As a result, ATA President Lloyd Hughes, president of, Record Abstract & Title Insurance Company, Denver, CO, obtained counsel, Pierpont Fuller of Denver, CO., to investigate and study mutual-type bar association title insuring companies. Mr. Fuller submitted his report at the 1960 Annual Convention. He found that proponents of such companies were spreading unfavorable publicity about title insurance companies run by private companies. He recommended that the ATA establish a public relations campaign to counteract the bad publicity. Also, he urged members to work against bar association-sponsored title insurance companies. In October 1961 ATA became aware of the formation of a Special Committee on Lawyers Title Guaranty Funds by the American Bar Association. ATA also was informed that within the ABA Section of Real Property, Trust and Probate Law, another committee had been appointed on lawyers title guaranty funds. Most ATA members were concerned about the effect of such bar-sponsored funds on the future abstract and title insurance business. But a few ATA members felt that there was undue alarm over this matter.
Bar Association Committee Formed
A special committee of the ATA Board of Governors on Relations with the Bar Association and Other Groups was created. The members of the committee unanimously agreed that the purpose of the bar association-sponsored title guaranty funds was to augment the income of the lawyer. In its report to the Board of Governors the committee made a number of recommendations including:
In 1962, as the new president of the ALTA®, William H. Deatly, president of The Title Guarantee Company, New York, NY, stated that one of his objectives he hoped would be accomplished was to “take some steps to stem the tide of unfair competition in our business which presently takes the form of organized bar-sponsored or financed title insurers or guaranty funds and several other methods of captivating title business.”
He also stated that ethical and conflict of interest problems are inevitable “when the organized bar enters the title insurance business for economic gain."
Joseph H. Smith, who was the ATA Secretary and became ATA executive vice president in 1959 when Jim Sheridan died suddenly, devoted his entire report at the time of the 1962 Annual Convention to bar funds. He contended that the bar’s primary motivation to create bar funds “was economic gain.” He also believed that a fund created conflict of interest problems for a participating attorney. He stated: “It is a fundamental concept of all fund operations that the member-lawyer represents the client in all phases of a real estate transaction, and at the same time represents the fund of which he is a member in issuing its policy of title insurance.
“The interest of the insured and the insurer under a title policy are basically adverse. It is to the interest of the insurer to set up all objections to the title that would affect its liability. It is to the advantage of the insured that objections to the title be minimized and the policy coverage be as broad as possible. A fund member who represents a party to a real estate transaction and also the title insurer would always be caught between these basic conflicts.”
Still Going Strong After Six Years
Fast forward to 1966. By this time, our name had changed to the American Land Title Association® (in 1962 to be exact). The ALTA® Executive Committee met to discuss recent American Bar Association activities concerning title insurance. Some of the matters discussed included:
Subsequently a series of informal discussions were held with certain members of the ABA. At the suggestion of members of the ABA, it was agreed that the chairmen of the ALTA® Legislative and Judiciary Committees would exchange information of mutual interest with subcommittees of the ABA Section on Real Property, Probate and Trust Law.
The resolve portions of the resolution of the ABA Committee on Lawyers’ Title Guaranty Funds were rewritten to request the ABA Bar Foundation to consider making a comprehensive study of title insurance and to provide that the Committee be authorized to conduct a public relations program on the essential services rendered by an independent legal counsel in real estate transactions. The ABA House of Delegates adopted the amended resolution.
At its March 1966 meeting, the ALTA® Board of Governors gave the president authority to appoint a special committee to work with a committee of the ABA, provided the ABA invited ALTA® to do so and further provided that the ABA committee “is a high level committee representative of all responsible groups in the American Bar Association.”
The following year the American Bar Association House of Delegates by a vote of 90 to 87 adopted a resolution approving, in principle, the formation of a National Bar-Related Title Assurance Corporation. The ABA also approved the creation of the National Conference of Lawyers, Title Insurers and Abstracters. Shortly thereafter at the ALTA® Annual Convention, the ALTA® Board of Governors authorized the president to select and retain counsel to oppose the ABA resolution. Thomas S. Jackson of Washington, D.C., was chosen. He submitted a written statement to the ABA Board of Governors and presented oral arguments. As a result, the ABA Board of Governors deferred any action to implement the National Bar-Related Title Assurance Corporation. In 1968 at a joint meeting of the ABA Special Committee on Lawyers’ Title Guaranty Funds and a three-man subcommittee of the ABA Board of Governors, Hewen A. Lasseter, vice president of American Title Insurance Company, submitted a plan whereby Continental Insurance Companies would capitalize a national bar-related title insurance company in the amount of from two to five million dollars. The company would operate exclusively through lawyers.
That same year the ABA Board of Governors by a vote of 10 to 8 adopted the Continental Insurance Companies’ proposal to create a National Bar-Related Title Insurance Company. This approval was subject to ratification by the ABA House of Delegates at its next meeting in August.
ALTA® Takes Action
ALTA® took a number of steps in an effort to persuade the ABA not to form such a company, with the support and assistance of David Maxwell, former president of the ABA. He and Tom Jackson, ALTA®’s attorney, prepared a 16-page paper that was sent to the 281 members of the ABA House of Delegates in opposition to the proposed company. In addition, William F. Simon, a prominent anti-trust lawyer in the District of Columbia, provided a 60-page antitrust opinion in which he concluded that the operation of the company under certain circumstances might be subject to prosecution under the antitrust laws. Thereafter, the ABA requested the Antitrust Division of the Department of Justice to provide an antitrust opinion on the proposed company.
At the 1968 ABA Annual Meeting its Board voted, 11 to 6, to recommend approval of the company to the House of Delegates. The ABA president spoke in favor of it. The ABA House of Delegates debated the proposed company for an hour and forty-five minutes. Tom Jackson was given special permission to address the House of Delegates for ten minutes to present ALTA®’s views on this subject. At the time of this debate the ABA had not received any “clearance” from the Antitrust Division for the proposed company. By a vote of 112 to 104 the ABA House of Delegates deferred the Continental Insurance Company proposal for a year.
The Battle Ends
In 1969 the battle with the ABA over the National Bar-Related Title Assurance Corporation ended. Early in that year, Continental Insurance Company withdrew its offer to underwrite the proposed Corporation. At the August 1969 meeting of the ABA House of Delegates, the request that the proposal to create a National Bar-Related Title Insurance Company be withdrawn was approved. The company was never created.
At a meeting of the National Conference of the ABA and ALTA® in 1969, six representatives from each association approved a “Statement of Principles Relating to Real Estate Transactions” involving the functions of lawyers, title insurance companies and abstracters in real estate transactions. In August of that year the ABA House of Delegates adopted the Statement. In September the ALTA® Board of Governors approved it. The Statement provided as follows:
The principles involving the functions of lawyers, title insurance companies and abstracters in real estate transactions have been approved by the National Conference of the American Bar Association and the American Land Title Association®. If approved by their respective governing bodies, this statement was to be circulated to the members of each association and to state and local bar associations, title associations, and abstracter associations as a recommended guide.
First Owner’s Policy Approved
At the 1957 Mid-Winter Conference, George C. Rawlings, chair of the Title Insurance Section, stated that he had appointed a Forms Committee, and the committee was producing an Owner’s policy. He said that creation of such a policy was stimulated by suggestions made by life insurance counsel at the 1957 ATA Convention.
After two years of work by the Committee on Title Insurance Standard Forms, the ATA Standard Owner’s Policy was approved at the 1959 Annual Convention. There were two identical policy forms in effect except that one insured against loss resulting from unmarketability of title and the other did not. Benjamin J. Henley, chairman of the committee and chairman of the board of California Pacific Title Insurance Company, believed that the title industry would long benefit from the Owner’s policy. He commented on the adoption of these forms as follows:
"Discussions of standard policy forms in the ATA, including both owner’s and loan, commenced almost at the beginning of the life of the association. Now, after the lapse of approximately fifty years, the final goal of approved policies for both transactions has been reached. It seems like a long time to work on a project of this character, and it is a long time. The result, however, offers proof that perpetual effort and wisely applied persistence will move mountains."
Other forms completed by the committee were the American Title Association Standard Loan Policy and the American Title Association Standard Loan Policy, Additional Coverage.
Promoting the Owner’s Policy
At the Board of Governors meeting at the 1958 Mid-Winter Conference, George Rawlings, Chair, Title Insurance Section, reported that his section had under consideration producing one and perhaps two motion pictures for the promotion and use of title insurance. This suggestion triggered considerable debate about improving relations between the abstracters and title insurance companies. Abstracters said they should be consulted in any new motion picture venture. It was suggested that a joint committee composed of members of the two sections be created to serve as a coordinating committee or as a committee on cooperation between the members of the sections.
Under the direction of ATA’s director of public relations, James Robinson, a film entitled “A Place Under the Sun” was produced and shown for the first time at the 1960 Annual Convention. The film was suited for television audiences, service organizations, high school assemblies, and women’s clubs. The concluding words of the movie were:
“A purchaser should insist upon an Owner’s title insurance policy. Only then can he be confident that he has found his own Place Under the Sun.”
In 1961 at the American Film Festival in New York, the nation’s highest award for a documentary film in the field of economics was presented to Robert K. Maynard, chairman of ATA’s Public Relations Committee and director of advertising and public relations, Lawyers Title Insurance Corporation, Richmond, VA, for his production of “A Place Under The Sun.”
Industry Image Problems
At the 1962 Annual Convention, the Advertising and Public Relations Committee reported to the Board of Governors that “historically the ATA has devoted extremely limited funds in the interest of public relations.” The committee also stated “any contemplated program of national advertising should be preceded by a comprehensive public opinion survey.” As a result, the Board of Governors directed the committee to make a comprehensive study of the title industry to determine whether or not any public relations program should be undertaken on a national basis. In addition the Board of Governors authorized the institution of a national public relations program if the committee and Executive Committee jointly determined that that was necessary and desirable.
In December 1963 Reader’s Digest published an article entitled “Closing Costs: A Booby Trap for Unwary Home-Buyers.” It was stated in this article that “most critics of closing costs regard the title companies as the main enemy.” At a special meeting of the Board of Governors it was decided that steps should be taken to counteract this unfavorable publicity. One step was to direct the ALTA® staff to prepare a letter of protest over the signature of President Clem Silvers to the Reader’s Digest managing editor. Over the next year the ALTA® Public Relations Committee under the chairmanship of Carroll R. West, vice president, Title Insurance and Trust Company, Los Angeles, CA, studied the problem of ALTA®’s image; the related problem of bad publicity; and public misinformation. At the 1964 Annual Convention the Board of Governors approved the committee’s recommendations concerning these matters. They included a campaign of national advertising in the Saturday Evening Post and a drastic increase in the tempo of the association’s public relations activity.
In order to finance these and other activities, the Board of Governors increased the minimum dues of underwriting companies from $100 to $125; abstracters and title agents from $15 to $25; attorneys and law firms to $20 and $30 respectively; and all other members 23%. In his report at the 1964 Annual Convention Carroll West stated that a basic problem of the title industry is that it has no real public image. He said:
“Generally speaking, the public accepts us blandly as a necessary evil. This is the root of the trouble we have with the press. Authors do not know what we are or what we do so anyone, anywhere, can attribute his closing cost headaches to the title industry and get away with it. Public ignorance through misinformation, or lack of information, is actually damaging to our industry.
“Controlled-business companies would not get off the ground if the public understood the conflict-of-interest involved. Distorted stories of the title industry’s part in ‘high closing costs’ can rapidly disappear if we use the tools that are available to us.
“Yes, we have a story to tell. Our industry is made up of two segments — search and the insurer. Within our industry, the search may be made by the independent abstracter or by the insurer through its own plant. In either case, the search process is independent of the insuring process except insofar as the underwriting is based on the search. In all cases, both segments, either singly or combined are worth their while, we know it but the public does not.”
PR Program Stepped Up
In 1965 ALTA® hired a professional writing team of David and Deane Heller to assist ALTA®’s director of public relations. They worked with the staff to develop a press release announcing a new brochure, “Seven Traps for Unwary Home Buyers,” and offered to prepare a specially written article for any newspaper or magazine. As a result ALTA® prepared articles on the subject of title insurance and home ownership for several newspapers and magazines.
The first ALTA® Saturday Evening Post advertisement appeared in the February 27, 1965, issue. Its emphasis was on the title search. Five more half-page ALTA® advertisements appeared the same year. The second, third, and fourth advertisements emphasized the value of title insurance. The fifth and sixth carried a coupon offering a reader a free booklet. Those who requested the booklet were provided with “ALTA® Answers Some Important Questions.”
Between the 1965 Annual Convention and the 1966 Mid-Winter Conference, the public relations activities of ALTA® were very successful. They involved consumer advertising, trade journal advertising, articles for magazines, radio and television appearances, telecasting of the ALTA® movie, requests from the public for ALTA® literature, and a public relations manual for members.
In 1966 the Washington Post published three articles over three consecutive days critical of title insurance as offered in the Washington, DC, area. The headline of the second article was “Loss Ratio Is Infinitesimal - Title Insurance A Riskless Business.” Subsequently, E. Spencer Fitzgerald, president, District of Columbia Realty Title Insurance Company, and ALTA® executive vice president, appeared on a DC radio station and answered questions for 1½ hours concerning title insurance.
ALTA® Moves to Washington In 1959 ALTA® President, Ernest J. Loebbecke, president of, Title Insurance and Trust Company, Los Angeles, CA, was instructed by the Board of Governors to make a study of the association office, its functions, services, and location and to submit his recommendations at the 1959 Annual Convention of any reorganization that was indicated. At the Annual Convention that year he presented these recommendations of his committee, which were approved by the Board:
Mid-Winter Conference Meets in Washington
The 1961 Mid-Winter Conference was held in Washington, DC, for the first time. Thirty-one senators and representatives, as well as other government officials and distinguished guests attended the reception during the conference. Many members visited the new ALTA® offices and were very impressed. ALTA® continues this tradition today with the Federal Conference, which meets in Washington each spring.
ALTA® & Membership
As mentioned earlier, ATA became the American Land Title Association® in 1962. Some changes to the bylaws were also put into effect at that time. Some dealt with ALTA® membership qualifications for attainment and responsibilities in its maintenance. Without impinging on the rights of affiliated state associations to limit applicants for ALTA® membership, these changes allowed ALTA® to decide which applicants met its membership standards and to discipline as well any who failed to maintain such standards.
Another change provided that affiliated state title associations may, at their option, require as a condition for membership in ALTA® that a prospective member, having his or its principal place of business in the state or territory represented by such associations, be or become a member of both associations. As of March 1963, 16 state secretaries had informed ALTA® that they would require membership in their state associations before a member became eligible for membership in the ALTA®.
In addition, the Constitution and Bylaws were amended as follows:
All applicants for active membership shall have had a continuous experience in the business of title evidencing for at least five years immediately prior to the date of application; provided however, that such requirement may be waived by the Board of Governors if the applicant, or the principals thereof, are deemed by said Board to have acquired otherwise the equivalent of such continuous business experience.
Communicating with Members
To help communicate more effectively with members, the magazine Title News was introduced in 1958. At that time Title News was published monthly and was 5-1/2 inches x 8 ½ inches in size and consisted of from 22 to 40 pages. It contained articles on the business of abstracting and on the Annual Convention and Mid-Winter Conference. Today Title News is an award-winning, bimonthly, 4-color magazine that still focuses on topics members need to know to run their businesses and keep up to date on what is happening in the industry.
The first ATA newsletter dealing with federal legislation and other related matters entitled “Capital Comment” was distributed to all members in 1961. Over the years, it became “ALTA® Advocate.” Today the ALTA® home page features government news; there is a special section in Title News for government news, and our weekly email newsletter, "ALTA® News You Can Use," highlights government news as well.
If you missed a decade during the year, you can find all of the history on ALTA®’s Web site under the special 100th Anniversary Section.
|William J. McAuliffe, Jr. was executive vice president of ALTA® from 1965-1984. He is serving as historian and advisor to ALTA® during the 100th anniversary celebration. He can be reached at email@example.com.|