Appeal Court Decision
Plaintiff insured sought review of the decision of the Superior Court of Sacramento County (California), which granted defendant insurer's motion for summary judgment in plaintiff's action for tortious breach of insurance contract with regard to defendant's refusal to indemnify plaintiff under a policy of title insurance.
Overview: corporate lawyer
Plaintiff insured loaned money to the owners of a townhouse. The borrowers gave plaintiff a note secured by a second deed of trust on the townhouse. Plaintiff simultaneously purchased a title insurance policy from defendant insurer. The policy excepted from coverage the first deed of trust. Defendant failed to disclose and therefore excepted from coverage three other liens senior to plaintiff's deed of trust. Borrowers defaulted and plaintiff became aware of the three undisclosed senior liens. Plaintiff then made a claim under the title insurance policy. Plaintiff foreclosed under the deed of trust and purchased the property at the trustee's sale for $ 1, subject to senior liens. Defendant continued to refuse payment and stated that plaintiff had not yet sustained an indemnifiable loss was a result of the three undisclosed senior liens. Plaintiff then filed a complaint for damages. The court affirmed the decision of the trial court and held that Plaintiff suffered no actual loss by reason of the undisclosed senior liens. The value of the property in the hands of plaintiff, the foreclosing insured lender, was not the measure of loss under the terms of the policy.
Outcome
The court affirmed the decision of the trial court which granted summary judgment in favor of defendant insurer and against plaintiff insured because plaintiff failed to suffer any actual losses by reason of defendant's failure to except from coverage in a title policy, three senior liens. The value of the property in the hands of plaintiff, the foreclosing insured lender, was not the measure of loss under the terms of the policy.