Safeco Title Ins. Co. v. Moskopoulos
Decision Date | 09 March 1981 |
Citation | 172 Cal.Rptr. 248,116 Cal.App.3d 658 |
Court | California Court of Appeals Court of Appeals |
Parties | , 18 A.L.R.4th 1301 SAFECO TITLE INSURANCE COMPANY, Plaintiff and Respondent, v. Paris MOSKOPOULOS, Defendant and Appellant. Civ. 58794. |
Gerald Lipsky Incorporated and Richard Pech, Beverly Hills, for defendant and appellant.
Tyre & Kamins and Richard J. Kamins, Los Angeles, for plaintiff and respondent.
Appellant Paris Moskopoulos appeals from a declaratory judgment determining that respondent Safeco Title Insurance Company ("Safeco") has no duty to provide a defense to appellant in an action against him, described hereafter, and awarding to Safeco attorneys' fees, costs, expenses and interest in the amount of $14,294.45.
Appellant is a licensed real estate broker and has been engaged in the real estate business for many years. He has been involved in escrow transactions and is familiar with title insurance policies. In 1974 Bea Williams ("Bea"), a licensed real estate agent, sold certain property located on Mulholland Drive, Los Angeles, to Billy Paul and Blanche Williams ("the Williamses"), who resided in Philadelphia and rented the property to others after they purchased it. The Williamses were friends of but not related to Bea. The Mulholland property was improved with a four-bedroom home overlooking the San Fernando Valley.
In late 1977 or early 1978 Bea, then an employee of appellant's company, Paris Realty Company, learned that the note secured by a first deed of trust on the Mulholland property was in default and the lender had recorded a notice of default. Bea informed the Williamses of the default and was told by them that an attorney was handling the matter. In February 1978 Bea learned that a foreclosure sale was noticed for March 9, 1978, 1 and notified appellant of the proposed sale.
On February 16 appellant made a written offer to the Williamses to purchase the Mulholland property for $110,000, all cash, with a $5,000 deposit. On February 17 Blanche Williams told appellant on the telephone that the Williamses would accept the offer and would send a confirming telegram. Appellant never received a confirming telegram or any other form of written acceptance of his offer. Appellant believed that real estate purchase agreements were required to be in writing. Both appellant and Bea tried repeatedly and unsuccessfully to obtain a written acceptance from the Williamses.
On February 17 appellant attempted to open an escrow for the purchase of the property and tendered a $5,000 deposit. The escrow company declined to accept the deposit and open an escrow without written escrow instructions signed by the sellers. Between February 18 and February 27 appellant negotiated with the Williamses through their attorney with regard to the amount of the deposit in escrow the sellers would require. On February 23 appellant received a counteroffer from the Williamses providing for a deposit of $40,000 in escrow. Appellant testified he could have accepted this counteroffer, but as a matter of principle refused to do so.
On February 27 appellant received a telegram from the Williamses revoking the counteroffer. On February 28 appellant, through his attorney, filed an action in the Superior Court, Los Angeles County, for specific performance against the Williamses and recorded a lis pendens with respect to the Mulholland property. On the same date appellant notified the Williamses by mailgram that he had filed an action against them and recorded a lis pendens, and that any agreement by them to sell the Mulholland property to a third party would result in "vigorous and appropriate legal action."
The trial court found that appellant filed the action against the Williamses and recorded the lis pendens for the specific purpose of securing the purchase of the property; that appellant was aware that the foreclosure sale was still set for March 9, and that the lis pendens would in all likelihood prevent the Williamses from selling the property to anyone else or obtaining refinancing prior to the date of the foreclosure sale; and that appellant's actions were intentional and deliberate and not the result of mistake or inadvertence.
Thereafter, further negotiations ensued between appellant and the Williamses through their attorneys, and a settlement of appellant's action was reached calling for appellant to purchase the property for $117,500 with a deposit of $10,000. Escrow closed on March 9 and the Williamses conveyed the property to appellant. On the same date Safeco issued its policy of title insurance, effective March 9, insuring appellant's title to the Mulholland property. Appellant was unaware that Safeco was in any way involved until after the escrow closed.
Appellant dismissed his action against the Williamses on July 24. On July 25, the Williamses and one Martin Klass filed an action (the "Klass action") in the Superior Court, Los Angeles County, against appellant. The complaint alleges six causes of action: interference with contractual relations; to impress a constructive trust; fraud; breach of fiduciary duty; rescission; and abuse of process. All of the causes of action are based on events leading up to appellant's purchase of the Mulholland property from the Williamses.
On August 7 appellant tendered the defense of the Klass action to Safeco. On or about September 22 Safeco agreed to provide a defense for appellant with counsel of his choice, subject to a reservation of Safeco's right to assert that it had no duty to defend appellant in the Klass action, and that it had the right to recover attorneys' fees paid by Safeco for appellant's defense. On December 13 Safeco filed the instant action against appellant seeking declaratory relief.
The issue presented is whether the Klass litigation is outside the coverage of the policy, or, if within the coverage, whether the policy exclusions relieve Safeco of any duty to defend. We conclude that Safeco had no duty to defend appellant in the Klass action for the reasons stated hereafter.
The relevant insuring clauses of the Safeco policy provide in pertinent part:
Safeco's duty to defend its insured is contained in paragraph 3(a) of the policy "Conditions and Stipulations" and provides: (P) "The Company, at its own cost and without undue delay, shall provide for the defense of an insured in litigation to the extent that such litigation involves an alleged defect, lien, encumbrance or other matter insured against by this policy."
The exclusions from coverage are contained in "Schedule B" of the policy and provide in pertinent part:
Appellant contends that the Klass causes of action for rescission of the contract of sale and to have appellant declared a constructive trustee of the property are adverse claims that amount to defects in appellant's title. Appellant contends further that the recording of a lis pendens by Klass and the Williamses rendered the title to the Mulholland property unmarketable.
The principles for determining the obligation of an insurer to its insured are set forth in Fresno Economy Import Used Cars, Inc. v. United States Fid. and Guar. Co. (1977) 76 Cal.App.3d 272, at pages 278-279, 142 Cal.Rptr. 681, hg. den., as follows: ...
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