Nelson (plaintiff) contracted to sell his home to Anderson (defendant). Nelson was to deliver a warranty deed conveying marketable title, free and clear of all encumbrances except those mentioned in the contract. The title insurance company’s report revealed that the property violated a restrictive covenant that required all the lots in that subdivision to be set back at least ten feet from the property lines of adjoining owners. Nelson obtained written assurances from the title insurance company that it would insure the violation for Anderson and subsequent purchasers. Anderson nevertheless refused to close and bought another property instead. Nelson sold to another buyer but at a lower price. Nelson sued for damages. Anderson counterclaimed for recovery of the deposit. The trial court granted Anderson summary judgment, holding that Nelson failed to deliver unencumbered title. Nelson appealed.