Hansen v. Western Title Ins. Co.

CourtCalifornia Court of Appeals
Writing for the CourtDEVINE; DRAPER, P. J., and SALSMAN
Citation33 Cal.Rptr. 668,98 A.L.R.2d 520,220 Cal.App.2d 531
Decision Date20 September 1963
Parties, 98 A.L.R.2d 520 Alfred R. HANSEN and Nathan E. Bales, Cross-Complainants and Respondents, v. WESTERN TITLE INSURANCE COMPANY, Cross-Defendant and Appellant. Civ. 20931.

Page 668

33 Cal.Rptr. 668
220 Cal.App.2d 531, 98 A.L.R.2d 520
Alfred R. HANSEN and Nathan E. Bales, Cross-Complainants and Respondents,
v.
WESTERN TITLE INSURANCE COMPANY, Cross-Defendant and Appellant.
Civ. 20931.
District Court of Appeal, First District, Division 3, California.
Sept. 20, 1963.

Page 669

[220 Cal.App.2d 532] Gordon B. Turner, Maurice E. Huguet, Jr., Martinez, for appellant.

Sellar & Engleking, Concord, for respondents.

DEVINE, Justice.

Respondents, holders of a title insurance policy issued by appellant, having been sued by a third person on transactions connected with acquisition of the insured property, cross-complained against appellant on the policy and obtained judgment in amount $8,782.25. 1 This amount represents the sum paid to the third person in settlemen of his lawsuit, plus attorney's fees and costs.

Respondents, who are builders, were interested in acquiring two adjacent parcels of undeveloped land near Concord in Contra Costa County, for purposes of subdivision. One parcel was owned by Wilson, the other by Fissori. 2 Respondents dealt directly with Wilson and obtained an option to purchase his land, but because Wilson was friendly with Fissouri, it was arranged that he would obtain an option, if he could, from Fissori and assign it to respondents. This was done. The transaction involving the original Wilson property is not directly concerned in this lawsuit, but the Fissori deal is, because the title insurance policy which is sued on was issued on the Fissori parcel.

The Fissori option to Wilson contained a detailed recitation of the price per acre, the duties of the optionee to subdivide and improve, and other matters not particularly relevant; that option was for two years, but was renewable for two more. It was expressly made assignable by the optionee without consent of Fissori. The agreement was drawn by respondents' attorney. On February 24, 1955, about four months after Fissori had granted the option to Wilson, Wilson entered into a contract with respondents, which contained a grant of an option of his own property, and an assignment of the Fissori option. Here, again, the contract was prepared by respondents' attorney. The contract provided, to put it most generally, that respondents would develop the land into a subdivision, and there was set up a profit-sharing arrangement[220 Cal.App.2d 533] between Wilson and respondents. One part of this contract has given rise to this litigation, namely, paragraph 17(a) which reads, in part, as follows: 'Upon the expiration of said four year period all unimproved lots, pieces or parcels shall be reconveyed to first parties by appropriate conveyance.' The lawsuit between Wilson and respondents, which was settled before trial and which is described below, was based upon the claim of Wilson that the sentence just quoted applies to the Fissori land as well as to the Wilson property. The contract was recorded on May 2, 1955, at the request of appellant title insurance company, and at the direction of respondents

About ten weeks later, and on May 2, 1955, a holding agreement between Fissori and respondents and the title insurance company was executed. This document was prepared, not by counsel for respondents as the option had been, but by an escrow officer of the title insurance company who, it would appear from some efforts to qualify him as an expert, was not a lawyer. The holding agreement provides that the Fissori property is conveyed to the title company on instruction to convey to respondents on payment of $2,500 an acre, but if the entire price is not paid in four years, any land not paid for at the agreed price per acre shall be reconveyed to Fissori. A few days later, this was modified by a supplemental holding agreement, also prepared by

Page 670

the title company, which provides for purchase by respondents of all of the Fissori property at a price of $34,000, except one parcel, upon which respondents were to build a home for Fissori; and a deed to respondents of all but the excepted parcel was authorized on down payment of $5,000. A policy was issued to respondents, showing title vested in the title company, but this, of course, was pursuant to the holding agreement and respondents were named as the insured.

It was testified by the former officer of the title company who had drawn the holding agreements (he was, at trial time, in the construction business) that he knew of the option of February 24, 1955, when he was preparing the holding agreements, that he obtained the consent of Wilson to both of these agreements (Wilson consented in writing to each of them), that he considered that the interest created by the Fissori option merged on conveyance of the property to the title company, and that as a result the policy does not list among the exceptions any interest or encumbrance of Wilson.

The title insurance policy contains the following exclusion[220 Cal.App.2d 534] from coverage among its stipulations: '(c) defects, liens, encumbrances, or other matters created or suffered by the insured claiming such loss or damage.' The policy also contains an agreement of the company to defend against loss or damage not exceeding $34,000, by reason of any defect or any lien or encumbrance upon the title to the insured existing...

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31 practice notes
  • RNT Holdings, LLC v. United Gen. Title Ins. Co., B250089
    • United States
    • California Court of Appeals
    • October 7, 2014
    ...conduct to provoke the owners' tort action against him, or knew that the action would occur. Hansen v. Western Title Ins. Co. (1963) 220 Cal.App.2d 531, 33 Cal.Rptr. 668, upon which RNT relies, is distinguishable. There, some developers obtained the right to develop real property under a co......
  • RNT Holdings, LLC v. United Gen. Title Ins. Co., B250089
    • United States
    • California Court of Appeals
    • October 7, 2014
    ...conduct to provoke the owners' tort action against him, or knew that the action would occur. Hansen v. Western Title Ins. Co. (1963) 220 Cal.App.2d 531, 33 Cal.Rptr. 668, upon which RNT relies, is distinguishable. There, some developers obtained the right to develop real property under a co......
  • RNT Holdings, LLC v. United Gen. Title Ins. Co., B250089
    • United States
    • California Court of Appeals
    • October 7, 2014
    ...conduct to provoke the owners' tort action against him, or knew that the action would occur.Hansen v. Western Title Ins. Co. (1963) 220 Cal.App.2d 531, 33 Cal.Rptr. 668, upon which RNT relies, is distinguishable. There, some developers obtained the right to develop real property under a con......
  • National Mortg. Corp. v. American Title Ins. Co., No. 7815SC587
    • United States
    • North Carolina Court of Appeal of North Carolina (US)
    • June 19, 1979
    ...Arizona Title Insurance & Trust Company v. Smith, 21 Ariz.App. 371, 519 P.2d 860 (1974); Hansen v. Western Title Insurance Company, 220 Cal.App.2d 531, 33 Cal.Rptr. 668 (1963). On the other hand, where the insured has been involved in a fraudulent or unconscionable scheme, recovery shou......
  • Request a trial to view additional results
31 cases
  • RNT Holdings, LLC v. United Gen. Title Ins. Co., B250089
    • United States
    • California Court of Appeals
    • October 7, 2014
    ...conduct to provoke the owners' tort action against him, or knew that the action would occur. Hansen v. Western Title Ins. Co. (1963) 220 Cal.App.2d 531, 33 Cal.Rptr. 668, upon which RNT relies, is distinguishable. There, some developers obtained the right to develop real property under a co......
  • RNT Holdings, LLC v. United Gen. Title Ins. Co., B250089
    • United States
    • California Court of Appeals
    • October 7, 2014
    ...conduct to provoke the owners' tort action against him, or knew that the action would occur. Hansen v. Western Title Ins. Co. (1963) 220 Cal.App.2d 531, 33 Cal.Rptr. 668, upon which RNT relies, is distinguishable. There, some developers obtained the right to develop real property under a co......
  • RNT Holdings, LLC v. United Gen. Title Ins. Co., B250089
    • United States
    • California Court of Appeals
    • October 7, 2014
    ...conduct to provoke the owners' tort action against him, or knew that the action would occur.Hansen v. Western Title Ins. Co. (1963) 220 Cal.App.2d 531, 33 Cal.Rptr. 668, upon which RNT relies, is distinguishable. There, some developers obtained the right to develop real property under a con......
  • National Mortg. Corp. v. American Title Ins. Co., No. 7815SC587
    • United States
    • North Carolina Court of Appeal of North Carolina (US)
    • June 19, 1979
    ...Arizona Title Insurance & Trust Company v. Smith, 21 Ariz.App. 371, 519 P.2d 860 (1974); Hansen v. Western Title Insurance Company, 220 Cal.App.2d 531, 33 Cal.Rptr. 668 (1963). On the other hand, where the insured has been involved in a fraudulent or unconscionable scheme, recovery shou......
  • Request a trial to view additional results

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