January 18, 2011
CLTA was recently vindicated in a unique lawsuit that attempted to hold CLTA liable for a title insurer's rejection of an insured's title claim. In San Luis Obispo County Superior Court, Plaintiff Scott Meisterlin filed the lawsuit entitled Meisterlin v. First American Title Ins. Co., et al., against First American Title Insurance Company ("FATIC"), CLTA and multiple other defendants. Plaintiff alleged that he procured from FATIC a title insurance policy for Plaintiff's Morro Bay property in December 2001. The City of Morro Bay allegedly owned an underground easement for a water main running beneath Plaintiff's property, which was not disclosed in the title policy. Approximately six years later, the water main ruptured and caused significant damage to Plaintiff's house and property. Plaintiff tendered a title claim to FATIC, which allegedly refused to honor Plaintiff's claim. Plaintiff's suit then followed.
Plaintiff creatively tried to create liability for CLTA. Plaintiff asserted that CLTA advertised on its website misleading and false representations about title insurance and title insurers' duties to reimburse insureds for covered losses. Further, Plaintiff claimed that CLTA is a trade organization for the entire title industry and, hence, effectively conspired with FATIC to wrongfully deny Plaintiff's title claim. Plaintiff sought compensatory and punitive damages against CLTA for allegedly violating the Cartwright Act, disseminating false advertising and engaging in unfair competition.
In response, CLTA's lawyers at Green & Hall in Santa Ana, California, prepared a detailed Demurrer asserting that each of Plaintiff's claims failed as a matter of law. The Demurrer argued that under the principles of Lawrence v. Chicago Title Ins. Co. (1987) 192 Cal.App.3d 70, 74, CLTA could not be liable under an insurance policy to which CLTA was not a party. Also, FATIC and CLTA were not legally required to disclose the City of Morro Bay's easement because it was not recorded. See Contini v. Western Title Ins. Co. (1974) 40 Cal.App.3d 536, 543 (title policy did not protect against loss of acreage resulting from unrecorded judgment). Green & Hall further argued that Plaintiff could not establish an unlawful conspiracy or that CLTA's advertising was false or misleading. On November 18, 2010, the Honorable Dodie Harman adopted these arguments and sustained CLTA's Demurrer and denied Plaintiff the right to amend his complaint. CLTA is now dismissed from the Meisterlin litigation. This victory is an important step in the continued efforts to insulate the title industry (and, in this case, CLTA) from baseless lawsuits.
If you have any questions, please contact Howard D. Hall, Esq. of Green & Hall at 714-918-7000 or firstname.lastname@example.org