Filed 9/30/13 Yen v. Chicago Title Co. CA4/3
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION THREE
ANN CHI YEN,
Plaintiff and Appellant, G047455
v. (Super. Ct. No. 30-2011-00502362)
CHICAGO TITLE INSURANCE OPINION
COMPANY,
Defendant and Respondent.
Appeal from a judgment of the Superior Court of Orange County, Linda S.
Marks, Judge. Affirmed.
Roberts and Roberts and Theodore K. Roberts for Plaintiff and Appellant.
Fidelity National Law Group and Kevin R. Broersma for Defendant and
Repsondent.
* * *
Appellant contends the trial court erred in sustaining a demurrer without
leave to amend. Finding no error, we affirm.
I
FACTS
The verified first amended complaint alleges appellant Ann Chi Yen
purchased a condominium unit located at 2516 North Tustin Avenue in Santa Ana on
August 23, 2010. On that same day, she “took out a buyer‟s policy of Title insurance”
from respondent Chicago Title Insurance Company.
According to her pleading, after appellant made the purchase, she
“discovered that there was a lawsuit pending in the Orange County Superior Court in case
#05CC00047 concerning this property. [¶] . . . This lawsuit and subsequent judgment
increased the homeowner‟s assessment on said condominium from $42-48 per month to
$2,000 per month, leaving the condominium with no economic value whatsoever. [¶]
. . . The Preliminary Title Report from the Defendants, and each of them, did not disclose
the fact that litigation was pending concerning this property.”
Other allegations in appellant‟s first amended complaint state: “Plaintiff
ANN CHI YEN now has a property which is unsalable because of the defect in title and
worthless because the $2,000 monthly lease amount is greater than the fair market rent on
the property, rendering Plaintiff ANN CHI YEN with a total loss;” and, “Defendants, and
each of them, breached this policy by not indemnifying Plaintiff ANN CHI YEN from
the losses she sustained due to a lawsuit (OCSC Case #05CC00047) which destroyed all
value to the property purchased.”
Respondent demurred to the first amended complaint. Attached to both the
first amended complaint and the demurrer is a copy of the insurance policy, which states:
“In addition to the Exclusions, You are not insured against loss, costs, attorneys‟ fees and
the expenses resulting from: [¶] . . . [¶] 5. A lease with certain terms, covenants,
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conditions and provisions set forth therein. [¶] Lessor: JOHN ROHRS AND VERA B.
ROHRS, AS TRUSTORS UNDER DATE OF MAY 16, 1961 [¶] Lessee:
WARMINGTON DEVELOPMENT, INC., [¶] Recorded: MAY 9, 1975 IN BOOK
11397 PAGE 783 OF OFFICIAL RECORDS [¶] AN AGREEMENT TO AMEND OR
MODIFY CERTAIN PROVISIONS OF SAID LEASE, AS SET FORTH THEREIN: [¶]
LESSOR: WARMINGTON DEVELOPMENT INC., A CALIFORNIA
CORPORTATION [¶] LESSEE: L.GLENN STURGIS AND MARY E. STURGIS,
HUSBAND AND WIFE AS JOINT TENANTS [¶] RECORDED: JANUARY 21, 1976,
IN BOOK 11625 PAGE 1649, OFFICIAL RECORDS [¶] The present ownership of the
leasehold created by said lease and other matters affecting the interest of the lessee are
not shown herein.”
During the hearing on the demurrer, the court noted, “. . . and now the lease
assessment goes up to $2,000 a month, but it doesn‟t go to title — that issue does not go
to title; that issue goes to value of the property.” The trial court sustained the demurrer
without leave to amend, and ordered the action dismissed with prejudice.
II
DISCUSSION
A trial court‟s action sustaining a demurrer presents a pure question of law
which we review de novo. (Farm Raised Salmon Cases (2008) 42 Cal.4th 1077, 1089,
fn. 10.) “„A demurrer tests only the legal sufficiency of the pleading. [Citation.] It
“admits the truth of all material factual allegations in the complaint . . . ; the question of
plaintiff‟s ability to prove these allegations, or the possible difficulty in making such
proof does not concern the reviewing court.”‟ [Citation.]” (Quelimane Co. v. Stewart
Title Guaranty Co. (1998) 19 Cal.4th 26, 47.) We independently examine the complaint
to determine whether the facts alleged state a cause of action under any legal theory.
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(McCall v. PacifiCare of Cal., Inc. (2001) 25 Cal.4th 412, 415.)1
Appellant states in her brief that “[a] title insurer‟s task is to comb the
record to determine whether recorded or filed legal documents create a cloud on their
insured‟s title,” but cites no authority to support her statement. She also argues some
language in “Attachment One” to the title policy “provides coverage for risks created by
litigation affecting the insured property, provided that no lis pendens has been recorded.”
Having failed to support her points with legal authority, these arguments are forfeited.
(Roden v. AmerisourceBergen Corp. (2010) 186 Cal.App.4th 620, 648.)
Appellant contends she is entitled to coverage under three sections of her
title policy. Under the section entitled “COVERED RISKS,” there are 32 risks listed.
Item 2 states: “Someone else has rights affecting Your Title because of leases, contracts,
or options.” Item 13 states: “Your Title is lost or taken because of a violation of any
covenant, condition or restriction, which occurred before You acquired Your Title, even
if the covenant, condition or restriction is excepted in Schedule B.” Item 29 states:
“Your Title is unmarketable, which allows someone else to refuse to perform a contract
to purchase the Land, lease it or make a Mortgage loan on it.”
Analysis of a written contract starts with an examination of its language.
(Civil Code § 1639.) The first issue is whether the claim falls within the scope of the
basic coverage of the policy, and the insured bears the burden to prove that issue.
(Golden Security Thrift & Loan Assn. v. First American Title Ins. Co. (1997) 53
Cal.App.4th 250, 255.) “[E]xclusionary clauses are interpreted narrowly, whereas
clauses identifying coverage are interpreted broadly.” (Garvey v. State Farm Fire &
Casualty Co. (1989) 48 Cal.3d 395, 406.)
1 We note the trial court permitted appellant to file an amended complaint when
respondent filed a demurrer to the original complaint. We further note, there has been no
request from appellant to amend her pleading again, nor any showing what another
amendment might accomplish.
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“„The words “good title” import that the owner has the title, legal and
equitable, to all the land, and the words “defective title” mean that the party claiming to
own has not the whole title, but some other person has title to a part or portion of the
land.‟ [Citations.]” (Hocking v. Title Ins. & Trust Co. (1951) 37 Cal.2d 644, 649.) In
Hocking, the plaintiff alleged she purchased two unimproved lots and received a grant
deed therefor. A month later, she purchased a title insurance policy. (Id. at pp. 645-646.)
As it turned out, plaintiff was not able to use the lots in the way she intended. The
California Supreme Court noted it is elementary that “„[o]ne can hold perfect title to land
that is valueless; one can have marketable title to land while the land itself is
unmarketable.‟” (Id. at p. 651.) The high court concluded: “Although it is unfortunate
that plaintiff has been unable to use her lots for the building purposes she contemplated, it
is our view that the facts which she pleads do not affect the marketability of her title to
the land, but merely impair the market value of the property. She appears to possess fee
simple title to the property for whatever it may be worth; if she has been damaged by
false representations in respect to the condition and value of the land her remedy would
seem to be against others than the insurers of the title she acquired. It follows that
plaintiff has failed to state a cause of action under the title policy.” (Id. at p. 652.)
In Lick Mill Creek Apartments v. Chicago Title Ins. Co. (1991) 231
Cal.App.3d 1654, the plaintiff purchased land contaminated by hazardous substances.
The California Department of Health ordered the property owner to remedy the toxic
contamination. (Id. at p. 1657.) That court also ruled against the plaintiff, concluding:
“We find no ambiguity in the insuring clause: defendants are obligated to insure plaintiffs
against unmarketability of title on the subject property. Because marketability of title and
the market value of the land itself are separate and distinct, plaintiffs cannot claim
coverage for the property‟s physical condition under this clause of the insurance
policies.” (Id. at p. 1662.)
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“An insurance company may limit the coverage of a policy issued by it.
When it has done so, the plain language of the limitation must be respected. [Citation.]”
(Safeco Title Ins. Co. v. Moskopoulos (1981) 116 Cal.App.3d 658, 666.) Any limitation
on coverage must be “conspicuous, plain and clear.” (Travelers Property Casualty Co. of
America v. Superior Court (2013) 215 Cal.App.4th 561, 575.)
Here the first page of the policy states: “The Policy insures You against
actual loss resulting from certain Covered Risks. These Covered Risks are listed
beginning on page 3 of the Policy. The Policy is limited by: [¶] Provisions of Schedule
A [¶] Exceptions in Schedule B.” The limitation concerning the lease at issue here is
listed on the first page of schedule B. No reasonable construction of this policy could
yield the conclusion the limitation of coverage for the lease is anything but conspicuous,
plain and clear.
III
DISPOSITION
The judgment is affirmed. Respondent shall recover its costs on appeal.
MOORE, ACTING P. J.
WE CONCUR:
ARONSON, J.
THOMPSON, J.
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