GRISELDA L. GILLARD v. FIDELITY NATIONAL INSURANCE COMPANY, as Sucessor to Lawyers Title Insurance Corporation, Commonwealth Land Title Insurance Company.
San Diego Superior Court, 37-2010-00062020-CU-IC-NC
Date of Verdict:
Facts and Background:
Plaintiff Griselda Gillard purchased a single family residence in Fallbrook, California in 2004. Unbeknownst to Gillard, the seller falsified the name of his wife on an Interspousal Transfer Grant Deed, which purported to grant the wife’s community property interest in the property to her husband, as his sole and separate property. In order to accomplish the falsification without detection, the seller falsified the Notary Acknowledgment prepared in connection with the Interspousal Transfer Grant Deed. The seller later falsified the name of his wife on a Quit Claim Deed, which purported to release her community property interest in the property to her husband, as his sole and separate property. The seller again falsified the Notary Acknowledgment prepared in connection with the Quit Claim Deed. The seller also falsified the Notary Acknowledgment prepared in connection with the Grant Deed which vested the property in Gillard’s name.
Due to these falsifications, title to the property is defective, rendering the property totally unmarketable. When Gillard learned of the defective deeds she made a claim against her title policy asserting that she did not receive the fee simple absolute title that she was insured and paid for. However, Fidelity repeatedly denied Gillard’s claims, and refused to fulfill its obligations under the title insurance policy.
Defendants contended this case is little more than a case of buyer’s remorse. Defendants disputed Plaintiff’s claims that title is defective. Defendants further argued that statutory law and recorded instruments invalidate Plaintiff’s allegations that the Spousal Deeds are defective. The ability to challenge to the validity of the Spousal Deeds expired on October 31, 2003 and March 17, 2005, respectively, under Family Code section 1105(d), and there was no challenge by the seller’s wife. Additionally, any purported defects in the Spousal Deeds were cured by operation of law pursuant to Civil Code Section 1207.Defendants argued that in the absence of any defect to Gillard’s title, there is no justiciable case or controversy as to whether Fidelity breached a contract or the covenant of good faith and fair dealing.
Trial was bifurcated. Phase One proceeded as a bench trial on the issues of (1) whether the policy covered Ms. Gillard’s claims, and (2) whether the deeds where defective and/or void. The Court ruled in Ms. Gillard’s favor and issued a written opinion. The Court ruled in favor of defendant on a remaining declaratory relief issue of whether the loans and trust deeds on the property were void due to the invalid and void title. The Phase 2 jury trial commenced thereafter on the issues of (1) breach of contract and (2) breach of the implied covenant of good faith and fair dealing. Jury Poll, 11-1 on breach of contract; 9-2 on breach of the implied covenant of good faith and fair dealing; Deliberation, 12 hours.
$1,450.000: Breach of Contract, $890,000; Breach of the Implied Covenant of Good Faith and Fair Dealing, $560,000.