Bulletin: NY000166

Dear Associates:

Due to recent developments, there has been some concern among agents as to exactly what the position of Stewart Title is with regard to issuing title insurance policies in areas affected by the claim by the Oneida Indian Nation against the State of New York.

The original Oneida claim to all lands claimed to be the tribe's by aboriginal right (the "50 mile swath") is one which is of no concern, as that Oneida's petition for certiorari to the US Supreme Court was denied in 1989. The decision of the US Court of Appeals for the Second Circuit remains the rule (see 860 F.2d 1145 (1988). The areas in Madison County and Oneida County covered by Index No. 70-CV-35, and the recently amended 74-CV-187, are still a concern, however.

These include the towns of Cazenovia, Fenner, Lenox, Lincoln, Oneida, Smithfield, Stockbridge and Sullivan in Madison County, and the towns of Augusta, Vernon and Verona.

The recent move by the Oneida Nation to amend the complaint in Action No. 74-CV-187, to add a class of approximately 20,000 property owners as defendants in the lawsuit, by naming several representative owners, has created a panic in the area, as evidenced by news reports. There is no need for panic, as it is our belief that the purpose for this tactic is (a) to spur the State of New York to bring the matter to a settlement, and (b) to keep prices down for the purpose of acquisition of additional lands by private sale.

As has been the Company's position in the past, any titles insured in these towns must include an exception (NAAX01) (or the first paragraph of NAAX03 NY); The Company is willing to continue to issue policies containing the affirmative insurance of the second paragraph in NAAX03 (or the ALTA language found in NAAX02) in the claim area in Oneida and Madison counties. The affirmative insurance is for ordinary residential transactions; insurance of commercial deals must be approved on a case-by-case basis.

We have been asked about issuance of Owner-in-Possession policies for persons who already own property in the affected area. Such a practice would be a matter of taking advantage of the fears of the populace in order to enrich the Company, and is not condoned or encouraged by the Company. People who already own property in the affected area will be no better off having title insurance than not; this is a matter which the State must deal fairly with both the Oneidas and the property owners - and it is our opinion that the State would have to use eminent domain procedures to acquire any lands which would be part of the settlement.

NAAX01 ALTANon-Intercourse Act

Any right or claim, whether or not of record, including but not limited to any right of possession or claim for damages relating to the land, which has or may be asserted, by or on behalf of any Indian or Indian tribe arising out of any treaty or other transfer of land based on the Indian Non-Intercourse Act of 1790, or any similar state or federal law.

NAAX02 STGCAgreement to Reinsure

This Policy insures the insured against loss or damage which the insured may sustain by reason of any right or claim of title, whether or not of record, which has been or may be asserted, by or on behalf of any Indian or Indian tribe arising out of any treaty or any other transfer of land based on the Indian Non-Intercourse Act of 1790, or any similar state or federal law. This Policy insures against loss or damage sustained by the insured by reason of unmarketablility of title (as hereinafter described) on account of said defect. With respect to said defect the offer of any title insurance company licensed to transact business in the State of New York, including the offer by this Company to insure the title to the land herein described in the manner set forth above shall be conclusive evidence of the marketability of the title hereby insured. The Company agrees that upon request of any mortgagee or vendee of the insured, or the mortgagee of such vendee, to issue its Policy containing the same affirmative coverage set forth above, subject to same condition and policy amount. The Company shall not be liable for any loss or damage suffered by the insured by reason of a proposed purchaser, mortgagee or assignee rejecting title, or refusing to make a loan or refusing to purchase the mortgage by reason of any Indian claims, against the land, provided that insurance is available as above set forth.

NAAX03 NYNew York exception for Indian Claims, with affirmative insurance (residential policies only)

Policy excepts any loss, claim or damage which the insured may sustain by reason of any right or claim of title which has been or which may be asserted, of record or not, by or on behalf of any Indian tribe on the basis that the prior purported transfer or termination of aboriginal or other title held by the tribe was invalid by virtue of the Act of July 22, 1790, "An Act to Regulate Trade and Intercourse with the Indian Tribes" ( Stat. 137, 138), and any subsequent re-enactment of the Act or any similar federal or state law.

This policy insures against loss or damage which the insured may sustain by reason of the assertion of such rights or claims. The Policy includes insurance against loss or damage by reason of the unmarketability of title (as hereinafter defined) on account of such defect. With respect to such defect, the offer of any title insurance company licensed to transact business in the State of New York, including this Company, to insure at regular rates the title to the land herein described in the manner set forth herein shall be conclusive evidence of the marketability of the title hereby insured. The Company agrees, upon request of any mortgagee or vendee of the insured, or the mortgagee of such vendee, to issue its policy containing the same affirmative insurance coverage set forth above, but subject to the same condition.