Title Trouble - sued by estate with lis pendes on property - can't sell

[Shashi Khatri]

Hi:

I bought a property in Atlanta from a wholesaler, site unseen for 140k. They used double closing, so I never knew who the seller was - and during the closing, I got no title reports from the closing law firm. The title insurance that they provided was limited to 140k, the purchase price - something I didn't clue into till now.

I spent 140k+ fixing the property. It's been on the market since March 2025, finally sale pending now. But during the title search, we learned some things:

There's a case filed by the estate of the deceased against me, the property and all of the intermediaries who owned the property before it got to me. Here's a timeline of events, per the case they filed:

- Owner (let's call him A) died in May 2023

- One person, let's call him B, filed no administration necessary as he was the dole heir with court in Georgia in Jan 2024, and was granted the right to sell

- The Estate of the deceased sued B in March 2024 in probate court. They also served him the papers in March

- B sold the property to C (an LLC) on July 1, via a special deed

- Late July, C sold to D (the wholesaler) who sold it to me - likely on the same day

- September of 2024, the court decided in favor of Estate, B never replied. The estate claims that there are 15+ heirs, B wasn't the only one

- August of 2025, estate filed a lawsuit against, B, C, D, me and the property.

- During the title search, it came up, and the new closing attorney said we can't sell till it clears up - with prejudice.

- I have filed a claim with my title company and they have decided to litigate - they say it's up to their discretion, they can choose whether to litigate or to settle, nothing I can do about that, they said. They further said that if I were to sell the property anyhow (by putting up a bond to remove lis pendens or something) then their duty to defend me ends. My coverage ends as well. So I further risk losing 140k, which is insured by them right now - and incur legal fees to defend myself.

It's been so frustrating dealing with this matter. I can't believe this kind of a thing can happen. My attorney, appointed by the title insurance, says that there's no way to file for any emergency injunction - because any harm to me is speculative. I could rent and when the case settles, the harm can be assessed. Civil cases like this, he insists, just can't be expedited.

The only way I saw that I could possible sell, was to put up a bond to remove lis pendens. But the title insurance's claim that I have no coverage afterwards makes that a non option.

I am looking for a way to expedite the case. The closing deadline is next week, so I don't think it's gonna happen before that, but still - if it can take less than the standard 2 years, which it might take per the lawyer - that would be a relief for me. The lawyer is looking into settlement - because he said even though the title insurer doesn't want it, he can still look into it - because he represents me.. something like that. I don't fully get it.

Who is at fault here? I feel like title insurance should settle and help me get out of this - or at least provide coverage even after the sale for this matter. The closing attorneys should have looked in the cases pending against A - are they liable for malpractice? When can I sue, after the damages are clear and quantifiable?

I am looking for  help, I reached out to some lawyers that my agent from Redfin recommended, but they have been no help. One wanted to meet in person, doesn't work with anyone that she can't meet. And the other just went silent after the initial call.

Looking for pointers, ideas on how to get the attorney to expedite this - if possible. It's possible that he's right, there's no such path?

I would greatly appreciate any help. Many thanks!

[Peter Walther]

You really need to retain separate counsel to answer your questions, but since you asked: it's hard to render an informed opinion without seeing all the documents in the chain, the pleadings and the coverage letter provided to you by the insurer.  Based on what you wrote it sounds like you're getting the coverage provided by the policy.  You might consider yourself lucky the insurer doesn't just tender you a check for $140k and leave you on your own to defend.  That may still happen if the litigation discovery shows that it likely there was in fact fraud and your title is not defendable.  The insurer could decide it doesn't make economic sense to spend the money to defend, lose, and have to pay the loss anyway.

As far as bonding, unless the estate has limited its claim to the value of the property and not the title itself, I doubt you can bond the claim off.  If you can bond the claim, it seems strange the insurer would not allow you to do it and thereby limit your potential loss.  While I believe your coverage under the policy may terminate if you sell the property, the insurer could agree to continue the coverage if they agree to the bond.  I also suspect you might have difficulty finding a buyer willing to buy knowing there is outstanding litigation could be amended to bring them into the suit.  

Keep in mind that while the attorney retained by the insurer represents you and not the company, (s)he was retained for the specific purposes outlined in the retention letter which probably is limited to defending the covered allegations in the estate's complaint and not to give you advice on any other matter.  If you want advice about whether the insurer is acting in accordance with its obligations under the policy, who else may be liable to you or what other steps you could take to mitigate your exposure, you probably need to retain separate counsel, at your expense, to answer those questions.

Have you or the estate representative filed a police report about the alleged fraud?