Judge: Olivia Rosales, Case: 20NWCV00408, Date: 2022-10-06 Tentative Ruling

Case Number: 20NWCV00408    Hearing Date: October 6, 2022    Dept: SEC

FIRST AMERICAN TITLE INSURANCE COMPANY v. PEREZ

CASE NO.:  20NWCV00408

HEARING:  10/06/22

#5

TENTATIVE ORDER

Plaintiff FIRST AMERICAN TITLE INSURANCE COMPANY’s Motion for Summary Judgment is GRANTED. The Alternative Motion for Summary Adjudication is MOOT.

Moving Party to give Notice.  

Plaintiff’s Request for Judicial Notice is GRANTED. (Cal. Ev. Code §452.)

This action was filed by Plaintiff FIRST AMERICAN TITLE INSURANCE COMPANY (“Plaintiff”) on July 28, 2020. The relevant facts, as summarized by Plaintiff in its moving papers, are as follows: “[Plaintiff] paid $290,000 to satisfy a judgment lien against Defendant Perez which encumbered two of [Plaintiff’s] properties. Because Defendant Perez failed to disclose the existence of the judgment lien, funds to pay off that lien were not deducted from his seller’s proceeds at the close of the escrows for his sales of the Hermosa and Lomita Properties. This resulted in Defendant Perez receiving sale proceeds from the Hermosa and Lomita escrows in amounts greater than that to which he was entitled. [Plaintiff] now seeks to recover those overpayments from Defendant Perez, because those funds should have been used to pay off the judgment lien instead of [Plaintiff] being required to pay it off.” (Motion 6:15-22.)

The operative Complaint asserts the following causes of action: (1) Unjust Enrichment; (2) Money Paid; (3) Breach of Written Contract – Subrogation; (4) Breach of Implied Warranty (Subrogation) (Cal. Civ. Code §111).

Plaintiff moves for summary judgment, or alternatively summary adjudication of all of its causes of action. Plaintiff argues that it is entitled to subrogation from Defendant for payment of Defendant’s undisclosed judgment lien.  

In Opposition, Defendant ALEXANDER PEREZ (“Defendant”) argues the following: “Perez owned a business that failed. His landlord got a judgment against him for damages under the lease. Perez filed bankruptcy and the judgment was discharged, but the abstract of judgment was not removed from (underwater) properties he owned. He sold one of the properties and the judgment came up. He paid a few thousand dollars, and received a release of the lien. What he did not realize was that the release was only for the property being sold, and did not remove the lien from other properties. When he was in escrow to sell the Hermosa property, the lien showed up again. He presented his ‘release’ to [Plaintiff] and [Plaintiff] agreed that the lien had been released. Escrow closed without paying the lien. Subsequently, Perez sold the Lomita property…and [Plaintiff] against insured the title without listing the lien as an exception. Strangely, shortly after the two escrows closed, the almost ten-year old judgment was assigned to a collection agency which renewed the judgment and demanded payment from [Plaintiff]. [Plaintiff] paid the creditor and filed this action against Perez…. [¶] Had [Plaintiff] simply read the release Perez showed it, it would have realized that the release did not affect any proprieties other than the one being sold at the time the release was given. While perhaps not obvious to Perez, the clear language of the release should have been obvious to [Plaintiff]…. [¶] Plaintiff created this situation through its own negligence, and seeks to hand Perez the bill. This is not right.” (Opp. 2:8 – 3:7.)

First Cause of Action – Unjust Enrichment

Plaintiff argues that Defendant was unjustly enriched as a result of the Plaintiff’s pay-off of the Defendant’s debt. Defendant received excess proceeds at the close of escrow that should have been applied to pay off the Defendant’s debt.

In Opposition, Defendant argues that he should not be responsible for Plaintiff’s error. Plaintiff—a title insurance company—should not have relied on Defendant to disclose whether liens have been cleared.

“[O]ne who is compelled, by reason of legal liability therefor, to pay an obligation which another in equity and good conscience should pay, may recover from that other the money so paid…. [I]n cases the law implies a request on the part of such other person, and a promise to repay.” (Pioneer Title Ins. Co. v. Guttman (1959) 175 Cal.App.2d 116, 120 [superseded by statute on other grounds as recognized in Pamela W. v. Millsom (1994) 25 Cal.App.4th 950.])

Summary adjudication of the first cause of action is GRANTED. It is undisputed that Plaintiff had a contractual obligation to its insureds under the title policies, to pay Defendant’s debt. Plaintiff issued title insurance policies to the Meza’s and the Nguyen’s. Defendant represented that the subject judgment lien had been released. Any error/negligence on Plaintiff’s part does not support shifting Defendant’s debt to Plaintiff. In Pioneer Title Ins. Co., supra, 175 Cal.App.3d at 120-121, the defendants were liable for unjust enrichment, even though the plaintiff escrow holder’s own clerical error was the reason that plaintiff incurred a legal obligation make a payment for the defendant’s benefit to a third party. Thus, pursuant to Pioneer Title, even if Plaintiff knew about the lien and, through inadvertence or mistake, failed to discharge it before the close of escrow, Defendant would still be liable to Plaintiff for the funds expended by Plaintiff for Defendant’s benefit. “[D]efendant’s retention of any consideration they received would amount to unjust enrichment. This latter consideration clearly weights the balance of the equities in favor of American’s right to subrogation.” (American Title Co. v. Anderson (1975) 52 Cal.App.3d 255, 260.)

Based on the foregoing, Plaintiff’s motion for summary adjudication of its second, third, and fourth causes of action for money paid, breach of written contract (subrogation), and breach of implied warranty (subrogation) is MOOT because Plaintiff seeks the same relief on all causes of action.

Summary judgment is GRANTED.

Plaintiff’s Evidentiary Objections to the Declaration of Alexander Perez filed in Opposition:

Nos. 1-16. Overruled