Title Insurance Only Insures Real Property

By Barry Zalma on October 13, 2026

When a Seller Advised it Could Not Obtain Title to the Home Fraud Can’t be Proved

A Manufactured Home is Personal Property Until it Becomes Real Property

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In Dale Johnson and Rose Johnson, Husband and Wife v. Stewart Title Guaranty Co., and Lennar Mortgage, LLC; Low Va Rates, LLC; Sandpoint Title Insurance, Inc.; Village Capital & Investment, LLC; and David Cassel, Engineer Agent; and Unknown Does 1-50, inclusively, No. 53126, Court of Appeals of Idaho (October 9, 2026) Dale and Rose Johnson purchased Idaho real property in 2012 with a manufactured home on it. Their purchase addendum acknowledged that the seller could not obtain title to the home, that evidence of title and an ALTA-7 endorsement might not be available, and that they accepted the home “as is.”

In 2020, after a HELOC application was denied, the Johnsons learned that the home had been wrecked and decertified in 2004 and that its 2006 conversion to real property relied on an invalid Manufacturer’s Certificate of Origin and decertified HUD labels.

Stewart Title denied coverage because its policy insured title to real property, not personal property, and Schedule B expressly excepted losses arising from the 2006 Statement of Intent. The district court granted Stewart Title summary judgment and dismissed or denied the Johnsons’ remaining claims and motions.

LAW

Summary judgment is proper when no genuine issue of material fact exists and the movant is entitled to judgment as a matter of law. Under Idaho Code § 63-304, a manufactured home remains personal property unless statutory requirements for conversion to real property are satisfied, including recording a valid statement of intent.

Fraud must be pleaded with particularity. Declaratory relief requires a definite, concrete dispute between parties with adverse legal interests, and appellate issues generally must be preserved below and supported by argument and authority.

DISCUSSION

The Johnsons argued that disputed facts precluded summary judgment, that the policy covered fraud and forgery affecting the home, that omitted underwriting language made the policy ambiguous, and that an ALTA endorsement should have supplied coverage.

They also sought declaratory relief concerning the home’s property status, challenged dismissal of fraud, alleged judicial bias, and requested leave to pursue constructive fraud. Stewart Title responded that the policy covered only the described land and legally qualifying improvements, that the home never became real property because the 2006 conversion was invalid.

ANALYSIS

The record, when reviewed as a whole, supports the district court’s conclusion that Stewart Title demonstrated there was no genuine issue of material fact regarding the Johnsons’ breach of contract claim and request for declaratory relief. The burden of proof then shifted to the Johnsons to present facts that would create a genuine issue of material fact on those remaining claims (rather than on previously dismissed claims). The Johnsons failed to do so.

The Court of Appeals held that the policy was unambiguous and afforded no coverage on two independent grounds. First, the Johnsons’ own theory—that the 2006 conversion was legally invalid—meant the manufactured home remained personal property, outside a policy covering the land and affixed improvements that by law constitute real property.

The district court properly found two bases to conclude that the Johnsons failed to establish a genuine issue of material fact on their breach of contract claim.

The district court noted that, at the time of purchase, the Johnsons signed an addendum acknowledging that the seller could not obtain title to the manufactured home and that evidence of title and title insurance . may not be available nor issued on the manufactured home. The district court concluded that because the policy covered real property, and not personal property, there was no coverage for the Johnsons’ claims.

The Johnsons’ identified no defect in that title. Second, even if the home had become real property, the policy broadly excluded losses arising “by reason of” the 2006 Statement of Intent, and the claimed loss depended entirely on that instrument and its supporting documents.

The fraud claim was inadequately particularized and, alternatively, abandoned when omitted from the amended pleading.

CONCLUSION

The Court of Appeals affirmed summary judgment for Stewart Title, the denial of Rule 60(b) relief, and the denial of reconsideration.

The Court of Appeal affirmed the district court’s judgment granting summary judgment in favor of Stewart Title, the denial of the Johnsons’ I.R.C.P. 60(b) motion, and the denial of the Johnsons’ motion to reconsider. Costs and attorney fees on appeal are awarded to Stewart Title.

ZALMA OPINION

Title insurance is a special kind of insurance and only insures real property and the rights to that property. To sue a title insurer there must be an unknown defect in title. In this case the plaintiffs were advised of the lack of title and bought the property as is with full knowledge and then tried to sue the insurer for not protecting them from their as is purchase. The district court concluded that because the policy covered real property, and not personal property, there was no coverage for the Johnsons’ claims.

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