Bates v. Chicago Title Co.
Filed 7/16/13 Bates v. Chicago Title Co. CA4/1
California Rules of Court, rule 8.1115(a), prohibits courts
and parties from citing or relying on opinions not certified for publication or
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COURT
OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION
ONE
STATE
OF CALIFORNIA
ROBERT F. BATES, as Trustee,
etc.,
Cross-complainant and Appellant,
v.
CHICAGO TITLE COMPANY,
Cross-defendant and Appellant.
D059205
(Super. Ct.
No.
37-2009-00101454-CU-OR-CTL)
APPEALS
from a judgment and order of the Superior
Court of
County, Ronald L. Styn, Judge.
Judgment reversed and remanded; cross-appeal dismissed.
Coughlin
Law Firm and Sean C. Coughlin for Cross-Complainant and Appellant.
Fidelity
National Law Group, Tao Y. Leung, Christopher D. Greinke and Jacky P. Wang for
Cross-defendant and Appellant.
Cross-complainant
Robert F. Bates, trustee of the Robert F. Bates Family Trust dated 11-29-90 (Bates) appeals a judgment
after the trial court granted the motion for summary judgment filed by
cross-defendant Chicago Title Company (CT) in his negligence cross-action
against it. Bates alleges CT was
negligent in preparing a deed of trust to replace one he had previously
reconveyed. On appeal, Bates contends
the trial court erred by concluding CT did not owe him a legal duty of due care
in preparing the replacement trust deed.
Because we conclude there are triable issues of material fact regarding
whether CT undertook to, and did, prepare the trust deed and the nature and
extent of any concomitant undertaking, we conclude the trial court erred by
granting CT's motion for summary judgment.
CT filed a
cross-appeal contending the trial court erred by denying its motion for leave
to augment its expert witness list or, in the alternative, leave to submit
tardy expert witness information.
Because that order is nonappealable, we dismiss the cross-appeal.
FACTUAL
AND PROCEDURAL BACKGROUND
On
September 17, 2002, Raytheon Development, Inc. (Raytheon), by its president,
Kevin A. Tucker, executed as trustor a deed of trust (2002 Trust Deed)
encumbering certain property it owned at 3655 Ruffin Road in San Diego
(Property) to secure a $450,000 promissory note (Note) it made payable to
Bates, the beneficiary of the 2002 Trust Deed.
On September 20, the 2002 Trust Deed was recorded in the San Diego
County Recorder's Office.
On October 25, 2002, Raytheon, by its
president (Tucker), executed a grant deed (Grant Deed) conveying its ownership
interest in the Property to Ruffin Road Venture Lot 3, a Nevada
corporation (RRV3). On November 13, the
Grant Deed was recorded in the San Diego County Recorder's Office. Bates and his son, Robert L. Bates,
apparently were unaware of the Grant Deed transferring ownership of the
Property at that time. At some point
during 2002, Bates retired and his son, Robert L. Bates, assumed most of his
duties related to servicing of the loan evidenced by the Note.
In November
or December 2003, San Diego County Credit Union (SDCCU) and RRV3 (apparently by
Tucker, its president) opened an escrow with CT, as escrow holder, for a
$1,600,000 loan to be made by SDCCU to RRV3 secured with a deed of trust
encumbering the Property. Renee Marshall,
an escrow officer with CT, handled the escrow.
CT was also the title insurer in the loan transaction. The SDCCU loan escrow apparently could not
close unless Bates reconveyed or subordinated the 2002 Trust Deed so the SDCCU
deed of trust would be first in priority.
On or about March 18, 2004,
CT sent Bates a request for demand and full reconveyance, a beneficiary's
demand, and substitution of trustee and a full reconveyance of the 2002 Trust
Deed. Tucker purportedly requested that
Bates and CT agree that if Bates reconveyed the 2002 Trust Deed, then Tucker
would execute a replacement trust deed after the SDCCU loan escrow closed.
reconveyance of the 2002 Trust Deed and submit a beneficiary demand for $0
unless CT assured him that a replacement deed of trust would be prepared,
executed, and notarized. In a telephone
conversation with Robert L. Bates, Marshall
purportedly confirmed CT would prepare a replacement deed of trust and ensure
that it was executed and notarized. On
or about March 24, Bates executed and delivered to CT a substitution of trustee
and full reconveyance of the 2002 Trust Deed and a beneficiary's demand for
$0. On April 9, apparently about the
time the SDCCU loan escrow closed, the substitution of trustee and full
reconveyance of the 2002 Trust Deed was recorded in the San Diego County
Recorder's Office. Also on April 9, a
deed of trust executed by RRV3, by its president (Tucker), encumbering the
Property as security for the $1,600,000 loan made by SDCCU, its beneficiary, was
recorded in the San Diego County Recorder's Office.
On April
23, 2004, trustor Raytheon, by its president, Tucker, executed a deed of trust
(2004 Trust Deed) encumbering the Property to secure the 2002 Note in the
amount of $450,000 it made to Bates, the beneficiary of the 2004 Trust Deed.
notarized Tucker's signature on the 2004 Trust Deed. Tucker apparently delivered the executed 2004
Trust Deed to Robert L. Bates, who later had it recorded in the San Diego
County Recorder's Office on May 17,
2004.
In December
2007, The Alliance Portfolio, a California corporation (Alliance), apparently
made a $600,000 loan to RRV3 secured by a deed of trust executed by trustor
RRV3, by its president (Tucker), encumbering the Property. In June 2009, with the 2002 Note apparently
in default, Bates recorded a notice of default under the 2004 Trust Deed. In November 2009, Alliance and other
plaintiffs filed a complaint against Bates, Raytheon, and RRV3 alleging causes of
action for quiet title, injunctive relief,
slander of title, declaratory relief, and cancellation of instrument and
damages. The complaint alleged that
at the time Raytheon executed the 2004 Trust Deed it did not have any right,
title, or interest in and to the Property and therefore the 2004 Trust Deed was
invalid and did not create a lien against the Property. The complaint sought relief enjoining the
foreclosure sale of the Property by Bates and declaring the 2004 Trust Deed
void.
Bates filed
a cross-complaint against CT, Alliance, Raytheon, RRV3 and others, alleging
causes of action for declaratory relief, negligence, indemnity, and
contribution. In his negligence cause of
action against CT, Bates alleged:
"28. While
the above-described SDCCU Escrow was pending, as described above, [CT] agreed
to act on behalf of [Bates] to properly consummate the above-described
reconveyance and re-recording transaction.
In doing so, [CT] owed a duty of care to [Bates] to properly handle the
reconveyance and re-recording transaction.
"29.
. . . [CT] acted negligently, in that in assisting [Bates]
with the reconveyance and re-recording transaction, and in preparing the [2002
Trust Deed] to be re-executed and re-recorded, [CT] failed to take the care
necessary and required of an escrow company in the same or similar role to
prevent exposure to [Bates] to the types of claims and allegations contained in
the Complaint filed by [Alliance].
"30. [Bates]
relied on the services of [CT] in that [CT] acted as the escrow agent for the
SDCCU transaction, knew that the obligation underlying the [2002 Trust Deed]
was not paid through the SDCCU transaction or otherwise, and assented to assist
[Bates] with the reconveyance and re-recording transaction."
CT filed a demurrer to the cross-complaint. The trial court sustained the demurrer as to
the declaratory relief, indemnity, and contribution causes of action and
overruled the demurrer as to the negligence cause of action.
CT then
filed a motion for summary judgment on Bates's negligence cause of action,
arguing it did not agree to properly consummate the re-recording transaction
and therefore did not owe Bates any duty of care. CT also argued that even if it agreed to, and
did, prepare the 2004 Trust Deed, Bates did not instruct it to verify that
Raytheon was the record title holder of the Property when the 2004 Trust Deed
was prepared, did not order a preliminary title report, and did not ask it to
insure the priority of the 2004 Trust Deed or otherwise guarantee the vesting
of the 2004 Trust Deed. In support of
its motion, CT submitted a separate statement of undisputed material facts,
Marshall's declaration, and an appendix of evidence. CT also filed a motion for leave to augment
its expert witness list and declaration or, in the alternative, leave to submit
tardy expert witness information.
Bates
opposed CT's motion for summary judgment, arguing there are triable issues of
material fact that precluded summary judgment.
He argued CT agreed to, and did, prepare a deed of trust to replace the
2002 Trust Deed and negligently prepared the 2004 Trust Deed by mistakenly
listing the wrong trustor on it. He
further argued CT owed him a duty to correctly prepare the 2004 Trust Deed and knew,
based on its handling of the SDCCU escrow, who the correct trustor was (i.e.,
RRV3 and not Raytheon). In support of
his opposition, Bates submitted a separate statement of undisputed material
facts, a declaration of Robert L. Bates, and a lodgment of exhibits. Bates also opposed CT's motion for leave to
augment its expert witness list and declaration or, in the alternative, leave
to submit tardy expert witness information.
CT filed a
reply in support of its motion for summary judgment. It argued that it fully complied with the
SDCCU escrow instructions. It argued the
undisputed facts showed a replacement trust deed was prepared because the 2004
Trust Deed contained material terms identical to those in the 2002 Trust Deed. Because the 2004 Trust Deed identified the
same trustor, the same property, and same beneficiary as in the 2002 Trust
Deed, CT argued it was a "replacement" trust deed. CT also argued it was not instructed by
Bates, either expressly or implicitly, to search the title for the Property or
otherwise verify the vesting information for the 2004 Trust Deed. Furthermore, it argued it would be
unreasonable to expect Marshall to know or recall the proper vesting for the
2004 Trust Deed based on her handling of the SDCCU escrow.
On December
23, 2010, the trial court denied CT's motion for leave to augment its expert
witness list. The court granted CT's
motion for summary judgment. On January
20, 2011, the court entered judgment for CT on Bates's cross-complaint against
it. Bates timely filed a notice of
appeal, challenging the summary judgment.
CT timely filed a notice of cross-appeal, challenging the order denying
its motion for leave to augment.
DISCUSSION
I
"On
appeal after a motion for summary judgment has been granted, we review the
record de novo, considering all the evidence set forth in the moving and
opposition papers except that to which objections have been made and
sustained." (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 334; see
Cal.4th 763, 767.) "The purpose of
the law of summary judgment is to provide courts with a mechanism to cut
through the parties' pleadings in order to determine whether, despite their
allegations, trial is in fact necessary to resolve their dispute." (Aguilar
v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843 (Aguilar).)
Aguilar clarified the standards
that apply to summary judgment motions under Code of Civil Procedure section
437c.
supra, 25 Cal.4th at pp.
843-857.) Generally, if all the papers
submitted by the parties show there is no triable issue of material fact and
the " 'moving party is entitled to a judgment as a matter of
law,' " the court must grant the motion for summary judgment. (Aguilar,
at p. 843, quoting § 437c, subd. (c).)
Section 437c, subdivision (p)(2), states:
"A defendant . . . has met his or her
burden of showing that a cause of action has no merit if that party has shown
that one or more elements of the cause of action, even if not separately pleaded,
cannot be established, or that there is a complete defense to that cause of
action. Once the defendant
. . . has met that burden, the burden shifts to the plaintiff
. . . to show that a triable issue of one or more material facts
exists as to that cause of action or a defense thereto. The plaintiff . . . may not rely
upon the mere allegations or denials of its pleadings to show that a triable
issue of material fact exists but, instead, shall set forth the specific facts
showing that a triable issue of material fact exists as to that cause of action
or a defense thereto."
Aguilar made the
following observations:
"First, and generally, from commencement to
conclusion, the party moving for summary judgment bears the burden of
persuasion that there is no triable issue of material fact and that he is
entitled to judgment as a matter of law. . . . There is a
triable issue of material fact if, and only if, the evidence would allow a
reasonable trier of fact to find the underlying fact in favor of the party opposing
the motion in accordance with the applicable standard of
proof. . . .
"Second, and generally, the party moving for
summary judgment bears an initial burden of production to make a prima facie
showing of the nonexistence of any triable issue of material fact; if he
carries his burden of production, he causes a shift, and the opposing party is
then subjected to a burden of production of his own to make a prima facie
showing of the existence of a triable issue of material
fact. . . . A prima facie showing is one that is sufficient to
support the position of the party in question. . . .
"Third, and generally, how the parties moving for,
and opposing, summary judgment may each carry their burden of persuasion and/or
production depends on which would bear
what burden of proof at
trial. . . . [I]f a defendant moves for summary judgment against
. . . a plaintiff [who would bear the burden of proof by a
preponderance of the evidence at trial], [the defendant] must present evidence
that would require a reasonable trier of fact not to find any underlying material fact more likely than
not--otherwise, he would not be
entitled to judgment as a matter of law,
but would have to present his
evidence to a trier of fact." (
Aguilar stated:
"To speak broadly, all of the foregoing discussion
of summary judgment law in this state, like that of its federal counterpart,
may be reduced to, and justified by, a single proposition: If a
party moving for summary judgment in any action . . . would prevail
at trial without submission of any issue of material fact to a trier of fact
for determination, then he should prevail on summary judgment. In such a case, . . . the 'court
should grant' the motion 'and avoid a . . . trial' rendered 'useless'
by nonsuit or directed verdict or similar device." (Aguilar,
supra, 25 Cal.4th at p. 855, italics
added.)
"[E]ven
though the court may not weigh the plaintiff's evidence or inferences against
the defendants' as though it were sitting as the trier of fact, it must
nevertheless determine what any evidence or inference could show or imply to a reasonable trier of fact. . . . In so doing, it does not decide on any
finding of its own, but simply decides what finding such a trier of fact could
make for itself." (
"[I]f the court determines that all of the evidence presented by
the plaintiff, and all of the inferences drawn therefrom, show and imply [the
ultimate fact] only as likely as
[not] or even less likely, it must
then grant the defendants' motion for summary judgment, even apart from any
evidence presented by the defendants or any inferences drawn therefrom, because
a reasonable trier of fact could not find for the plaintiff. Under such circumstances, the [factual] issue
is not triable--that is, it may not be submitted to a trier of fact for
determination in favor of either the plaintiff or the defendants, but must be
taken from the trier of fact and resolved by the court itself in the defendants'
favor and against the plaintiff." (
"On
appeal, we exercise 'an independent assessment of the correctness of the trial
court's ruling, applying the same legal standard as the trial court in
determining whether there are any genuine issues of material fact or whether
the moving party is entitled to judgment as a matter of law.' [Citation.]
'The appellate court must examine only papers before the trial court
when it considered the motion, and not documents filed later. [Citation.]
Moreover, we construe the moving party's affidavits strictly, construe
the opponent's affidavits liberally, and resolve doubts about the propriety of
granting the motion in favor of the party opposing it.' " (Seo v. All-Makes Overhead Doors (2002)
97 Cal.App.4th 1193, 1201-1202.)
II
In
California, the general rule is that all persons have a duty to use ordinary
care to prevent others from being injured as a result of their conduct. (Civ. Code, § 1714; Rowland v. Christian (1968) 69 Cal.2d 108, 112-113.) "The elements of a cause of action for
negligence are: duty; breach of duty; legal cause; and damages. [Citations.]
The existence of a duty is the threshold element of a negligence cause
of action." (Friedman v. Merck & Co. (2003) 107 Cal.App.4th 454, 463.) " 'The threshold element of a cause
of action for negligence is the existence of a duty to use due care toward an
interest of another that enjoys legal
protection against unintentional invasion.
[Citations.] Whether this
essential prerequisite to a negligence cause of action has been satisfied in a
particular case is a question of law to be resolved by the
court.' " (
Cal.4th 604, 614.) "To say that
someone owes another a duty of care ' "is a shorthand statement of a
conclusion, rather than an aid to analysis in itself. . . . '[D]uty' is not sacrosanct in itself, but
only an expression of the sum total of those considerations of policy which
lead the law to say that the particular plaintiff is entitled to
protection." [Citation.]' [Citation.]
'[L]egal duties are not discoverable facts of nature, but merely
conclusory expressions that, in cases of a particular type, liability should be
imposed for damage done.' " (
(1998) 19 Cal.4th 925, 933.) "[T]he
question of the existence and scope of a defendant's duty of care is a legal
question which depends on the nature of the . . . activity in question
and on the parties' general relationship to the activity, and is an issue to be
decided by the court, rather than the jury." (Knight
v. Jewett (1992) 3 Cal.4th 296, 313.)
considerations that should be taken into account in determining whether a legal
duty of care should be imposed in a particular case. "Rowland
enumerates a number of considerations, however, that have been taken into
account by courts in various contexts to determine whether a departure from the
general rule [i.e., that a duty of due care exists to avoid injuring others] is
appropriate: 'the major [considerations] are the foreseeability of harm to the plaintiff, the degree of
certainty that the plaintiff suffered injury, the closeness of the connection
between the defendant's conduct and the injury suffered, the moral blame
attached to the defendant's conduct, the policy of preventing future harm, the
extent of the burden to the defendant and consequences to the community of
imposing a duty to exercise care with resulting liability for breach, and the
availability, cost, and prevalence of insurance for the risk involved.' (Italics added.) [Citation.]
The foreseeability of a particular kind of harm plays a very significant
role in this calculus [citation], but a court's task--in determining 'duty'--is
not to decide whether a particular
plaintiff's injury was reasonably foreseeable in light of a
rather to evaluate more generally whether the category of negligent conduct at
issue is sufficiently likely to result in the kind of harm experienced that
liability may appropriately be imposed on the negligent party." (Ballard
v. Uribe (1986) 41 Cal.3d 564, 572-573, fn. 6.)
However,
when the alleged injury is other than physical harm, a different set of
considerations may apply in determining whether a duty of care exists. (Bily
v. Arthur Young & Co. (1992) 3 Cal.4th 370, 397.) In the absence of privity of contract,
set forth certain factors that should be considered in determining whether a
duty of care and negligence liability should be imposed in a particular
case. Biakanja stated:
"The determination whether in a specific case the
defendant will be held liable to a third person not in privity is a matter of
policy and involves the balancing of various factors, among which are the
extent to which the transaction was intended to affect the plaintiff, the
foreseeability of harm to him, the degree of certainty that the plaintiff suffered
injury, the closeness of the connection between the defendant's conduct and the
injury suffered, the moral blame attached to the defendant's conduct, and the
policy of preventing future harm."
(Id. at p. 650.)
Under
negligence principles, a person generally has no duty to protect another from
harm in the absence of a special relationship or custody or control. (Nally
v. Grace Community Church (1988) 47 Cal.3d 278, 293.) However, if a person voluntarily or
gratuitously undertakes to perform services, a duty to exercise due care in
performing those services exists.
"A person not required to perform services for another may
sometimes do so in a voluntary or gratuitous undertaking, and in that case, is
under a duty to exercise due care in performance." (6 Witkin, Summary of Cal. Law (10th ed.
2005) Torts, § 1060, p. 371.)
Alternatively stated, "[a] defendant who enters upon an affirmative
course of conduct affecting the interests of another is regarded as assuming a
duty to act, and will be liable for negligent acts or omissions [citations],
because one who undertakes to do an act must do it with care. [Citations.]
As [Prosser, Handbook of the Law of Torts (4th ed. 1971) § 56, p.
346] states: 'Where performance clearly has begun, there is no doubt that there
is a duty of care.' " (
(1984) 162 Cal.App.3d 571, 575.)
The
principle that a person may be liable for negligent performance of a voluntary
undertaking has been applied in cases involving only financial loss and without
any physical harm to persons or property.
In Valdez v. Taylor Automobile Co.
(1954) 129 Cal.App.2d 810 (Valdez), a
car dealer advertised that the purchase price of a car would include the cost
of a liability insurance policy for a car buyer. (Id.
at p. 812.) The plaintiff bought a car
and informed the salesperson he wanted full coverage insurance to protect
himself from liability in the event of an accident. (Ibid.) The salesperson stated he would obtain that
insurance and prepared documents for the sale and insurance. (Id.
at p. 813.) When the plaintiff was sued
following a car accident, he tendered his defense to the car dealer. (Id.
at p. 814.) The dealer declined and a
money judgment was entered against the plaintiff. (Ibid.) The plaintiff then filed an action against
the dealer for breach of contract, negligence, and fraud. (Id.
at p. 812.) Although the jury apparently
rejected the plaintiff's breach of contract claim, it found the dealer liable
and awarded the plaintiff $18,465. (
On appeal,
the car dealer argued that because the jury found there was no contract
obligating it to obtain insurance for the plaintiff, it had no duty to procure
that insurance and, absent such contractual duty, the plaintiff could not recover
for the dealer's negligent failure to procure that insurance. (Valdez,
supra, 129 Cal.App.2d at p.
817.) Valdez rejected that argument, stating: "It is well
established that a person may become liable in tort for negligently failing to
perform a voluntarily assumed undertaking even in the absence of a contract to
do so. A person may not be required to
perform a service for another but he may undertake to do so--called a voluntary
undertaking. In such a case the person
undertaking to perform the service is under a duty to exercise due care in
performing the voluntarily assumed duty, and a failure to exercise due care is
negligence. Dean Prosser says, '[I]f the
defendant enters upon an affirmative course of conduct affecting the interests
of another, he is regarded as assuming a duty to act, and will thereafter be
liable for negligent acts or omissions,' and '. . . [t]here is
authority that where the defendant has reason to expect such reliance to the
plaintiff's detriment, even a mere gratuitous promise will be enough to create
a duty, for the breach of which a tort action will lie.' " (Id.
at pp. 817-818.) Valdez modified the judgment awarding the plaintiff damages in tort
and affirmed the judgment, as so modified.
(Id. at p. 823.)
Cal.App.3d 209 (Aim Insurance), cited
by Bates, involved similar factual circumstances in which the defendant
allegedly failed to obtain insurance despite a voluntary undertaking to do
so. (Id.
at pp. 215-217.) Aim Insurance cited Valdez
with approval and concluded the allegations in its case "state a cause of
action for negligence based on Culcasi's alleged breach of his duty to perform
with due care the task he undertook and upon which [the plaintiff]
relied." (Aim Insurance, at p. 216; see also Cooper v. State Farm Mutual Automobile Ins. Co. (2009) 177
Cal.App.4th 876, 904 [complaint sufficiently alleged cause of action for
negligent voluntary undertaking and/or promissory estoppel based on defendant's
alleged failure to preserve tire evidence despite voluntary representation it
would preserve that evidence].)
In
California Supreme Court cited with approval Valdez's description of the duty of care arising out of a voluntary
undertaking. Artiglio stated it had previously described the negligent
undertaking theory of liability as firmly rooted in the common law of
negligence. It stated: "Thus, it is
settled law that one 'who, having no initial duty to do so, undertakes to come
to the aid of another--the 'good Samaritan' "--has 'a duty to exercise due
care in performance and is liable if (a) his failure to exercise care increases
the risk of such harm, or (b) the harm is suffered because of the other's
reliance upon the undertaking.'
([Citations]; see also BAJI No. 4.45 ['A person who is under no duty to
care for or render service to another but who voluntarily assumes such a duty,
is liable to the other for injury caused by a failure to exercise ordinary or
reasonable care in the performance of that assumed duty.'].)" (Artiglio,
at p. 613, fn. omitted.)
undertaking claim of liability to third parties requires evidence that: (1) the
actor . . . undertook, gratuitously or for consideration, to render
services to another . . . ; (2) the services rendered were of a kind
the actor should have recognized as necessary for the protection of third
persons (plaintiffs); (3) the actor failed to exercise reasonable care in the
performance of its undertaking; (4) the failure to exercise reasonable care
resulted in physical harm to the third persons; and (5) either (a) the actor's
carelessness increased the risk of such harm, or (b) the undertaking was to
perform a duty owed by the other to the third persons, or (c) the harm was
suffered because of the reliance of the other or the third persons upon the
undertaking." (Id. at pp. 613-614.) Based
on Artiglio's citation of
approval, we believe the Supreme Court intended to approve the application of
the voluntary undertaking theory of duty in negligence cases regardless of the
type of damages suffered (i.e., both cases involving physical harm to persons
or property and cases involving only economic loss). To the extent Artiglio phrased the voluntary undertaking theory as requiring
believe it did so because the plaintiffs in that case suffered physical harm
allegedly caused by silicone gel breast implants. (Id.
at pp. 610-611.) CT has not cited, and
we are unaware of, any decision by the Supreme Court involving only economic
loss that expressly holds the voluntary undertaking theory of duty under
negligence law does not apply. We
decline to restrict the application of that theory in cases in which public
policy supports its application.
III
Judgment
Bates
contends the trial court erred by granting CT's motion for summary
judgment. He asserts there is, at a
minimum, a triable issue of material fact regarding whether CT voluntarily
undertook to prepare the 2004 Trust Deed and therefore owed him a duty of due
care.
A
In moving
for summary judgment, CT argued that it did not agree to properly consummate
the re-recording transaction and therefore did not owe Bates any duty of
care. In its separate statement of
undisputed material facts, CT asserted: "Neither Tucker nor Bates asked
[CT] to 'properly consummate' the 're-recording' transaction as an accommodation." In support of that asserted undisputed fact,
CT cited Marshall's declaration in which she stated: "In connection with
my notarization of Tucker's signature to the 2004 Deed of Trust, neither Tucker
nor Bates opened an escrow with me or [CT].
They never asked me or [CT] to 'properly consummate' the 're-recording'
transaction as an accommodation."
Marshall's declaration also stated: "In December 2003, [SDCCU] and
[RRV3], through [Tucker], opened an escrow with [CT] for a $1.6 million loan by
SDCCU to RRV3 that would be secured by a deed of trust against the [Property]
(the 'SDCCU Escrow'). I was [CT]'s
escrow holder for the SDCCU Escrow. . . . Based upon my review of the escrow file,
including [the] escrow instructions, the only parties to the SDCCU Escrow were
SDCCU and RRV3. There is no evidence
that I am aware of indicating that Bates was a party to the SDCCU
Escrow." Marshall stated:
"[CT] did not record or cause to be recorded the 2004 Deed of Trust. Additionally, . . . [CT] neither
obtained a preliminary title report nor issued any title insurance policy in
connection with the 2004 Deed of Trust.
No one instructed me to perform a title search on the Property or
otherwise verify the vesting information on the 2004 Deed of Trust." Marshall further declared: "I do not
believe I had any involvement with the preparation of the 2004 [Trust Deed]
other than notarizing it. This is
because the 2004 Deed of Trust was typed on a pre-printed [stationery] form
provided by [CT] (in blank form) to its clients. When I prepare deeds of trust for recording
against real property in California, I use computer-generated forms."
In opposing
CT's motion for summary judgment, Bates argued that CT agreed to, and did,
prepare a deed of trust to replace the 2002 Trust Deed and negligently prepared
the 2004 Trust Deed by mistakenly listing the wrong trustor (i.e., Raytheon,
instead of RRV3) on it. He further
argued CT owed him a duty to correctly prepare the 2004 Trust Deed and knew,
based on its handling of the SDCCU escrow, who the correct trustor was (i.e.,
RRV3 and not Raytheon). In support of
his opposition, Bates submitted a separate statement of undisputed material
facts, in which he asserted he "was a party to the [SDCCU] escrow to the
extent that [CT] agreed that if Mr. Bates reconveyed his 2002 Deed of Trust
with a zero [pay-out] so the SDCCU Escrow could close, [CT] would ensure that
it would prepare a replacement deed of trust for Mr. Bates following the close
of the SDCCU Escrow." Bates
disputed CT's assertion that neither Tucker nor Bates asked it to
"properly consummate" the "re-recording" transaction as an
accommodation. To refute CT's asserted
fact, Bates asserted:
"While the SDCCU Escrow was still pending, Mr.
Bates, Jr.[,] called Renee Marshall to confirm that [CT] would prepare the
replacement deed of trust and ensure that it was executed and notarized soon
after the close of the SDCCU Escrow. Ms.
Marshall confirmed that this would be done.
Essentially, Ms. Marshall provided complete assurances that if Mr. Bates
submitted a zero beneficiary demand and executed the Reconveyance, she would
ensure the replacement deed of trust would be executed and notarized."
Also, refuting CT's assertion that it did not obtain a
preliminary title report in connection with the 2004 Trust Deed, Bates asserted:
"As escrow holder and title insurer for the SDCCU Escrow, [CT] was in
possession of the preliminary reports issued in connection with the SDCCU
Escrow, which closed on April 9, [2004]. [¶] . . . [¶]
. . . [CT] simply failed to correctly type in the information they
already knew, and which had not changed."
Refuting CT's assertion that no one instructed Marshall to perform a
title search on the Property or otherwise verify the vesting information on the
2004 Trust Deed, Bates asserted:
"As escrow holder and title insurer for the SDCCU
Escrow, [CT] was in possession of the preliminary reports issued in connection
with the SDCCU Escrow, which closed on April 9, [2004]. Further, [CT] knew who the owner of the
Property was on April 23, 2004, the date the [2004 Trust Deed] was
executed."
As additional disputed material
facts, Bates asserted: "In that she was the escrow officer for the SDCCU
Escrow, on April 23, [2004], Renee Marshall knew that the owner of the Property
was [RRV3]." He made further
assertions citing the declaration of Robert L. Bates, in which he declared:
"7.
. . . While the SDCCU Escrow was pending, [Tucker], the
principal of RRV3, requested that my father and [CT] enter [into] an agreement
whereby my father would reconvey his deed of trust [i.e., the 2002 Trust Deed],
and then Mr. Tucker would re-execute a replacement deed of trust after the
close of the SDCCU Escrow (the 'Bates 2004 Deed of Trust' [i.e., the 2004 Trust
Deed]).
"8. My
father would only agree to reconvey his 2002 [Trust Deed] (and submit a zero
beneficiary demand on a Note with a significant balance), if [CT] would ensure
that a replacement deed of trust transaction was consummated by 1) preparing
the replacement deed of trust and 2) having it executed and notarized.
"9. In this
regard, while the SDCCU Escrow was still pending, I called Renee Marshall to
confirm that [CT] would prepare the replacement deed of trust and ensure that
it was executed and notarized soon after the close of the SDCCU Escrow. Ms. Marshall confirmed that this would be
done. It is my understanding that the
SDCCU Escrow could not have closed unless my father reconveyed his 2002 [Trust
Deed]. Essentially, Ms. Marshall provided
complete assurances that if my father submitted a zero beneficiary demand and
executed the Reconveyance, she would ensure the replacement deed of trust would
be executed and notarized. I considered
[CT]'s agreement in this regard to be part of and in furtherance of the SDCCU
Escrow. If Ms. Marshall had not
confirmed that [CT] would handle this transaction, my father would have either
not agreed to execute the reconveyance of the 2002 [Trust Deed], or otherwise
would have instructed a third party to handle the transaction on his
behalf."
Bates further declared:
"10.
Thereafter, on or about March 18, 2004, Ms. Marshall prepared and
forwarded the following documents for my father's signature: 1) Request for Demand and Full Reconveyance
. . . ; 2) Beneficiary's Demand . . . ; [and] 3)
Substitution of Trustee and Full Reconveyance . . . . In reliance upon Ms. Marshall's confirmation
that [CT] would ensure that a replacement deed of trust would be prepared,
executed, and notarized, my father submitted a 'zero' beneficiary demand and
executed the Reconveyance.
"11. I am
informed and believe that the SDCCU Escrow closed approximately April 9,
2004. Also in April 2004, my father was
participating in another lending transaction in which he would receive two
deeds of trust recorded against 1) real property owned by Stage Coach Ventures,
LLC, an entity owned or controlled by [Tucker] (the 'Stagecoach Deed of
Trust'), and 2) residential real property owned by Theresa Tucker, Mr. Tucker's
wife (the 'Atrium Deed of Trust'). [CT]
acted as the Escrow officer and the title insurer for these transactions
[citation]. Around this time, I also
inquired with Renee Marshall regarding the status of the preparation and
execution of the replacement deed of trust on the Property. Ms. Marshall confirmed again that [CT] would
ensure that this replacement deed of trust would be prepared, executed, and
notarized.
"12. On
April 23, 2004, the same day that the replacement deed of trust on the
[Property] was to be executed, Renee Marshall faxed the drafts of the
Stagecoach and Atrium Deeds of Trust to my office for my review. [Citation.]
The draft of the Stage Coach Deed of Trust faxed by Ms. Marshall to me
was prepared on the exact same typewritten form . . . as the [2004
Trust Deed], on the same day that the [2004 Trust Deed] was presented to Mr.
Tucker for signature at Renee Marshall's office. [Citations.]
Although, prior to March 19, [2004], I had instructed Ms. Marshall to
ensure that the [replacement] deed of trust be prepared, I believe that either
Renee Marshall, one of her assistants, or another [CT] employee prepared the
[2004 Trust Deed] actually on April 23, [2004], knowing that Mr. Tucker would
be meeting with Ms. Marshall to execute the Stagecoach and the Atrium Deeds of
Trust. [¶] . . . [¶]
"14. I did
not prepare the [2004 Trust Deed]. My
father did not prepare the [2004 Trust Deed]. . . . I have no reason to believe that anyone other
than Renee Marshall, or another [CT] employee in her office, prepared this deed
of trust. In that Ms. Marshall acted as
the escrow officer for the SDCCU Escrow, I believe it was rational for me to
assume that Ms. Marshall knew who the owner of the Property was, and to my
knowledge, Ms. Marshall has never denied that she knew that [RRV3] was the
owner of the Property on April 23, [2004]."
Bates also
lodged certain documents, including excerpts from Tucker's deposition. In that deposition, Tucker stated he did not
bring any deeds of trust with him when meeting with Marshall on April 23, 2004. He stated he did not prepare the 2004 Trust
Deed and that he "got it from her [Marshall]. . . . I went to her office and picked it up and
signed it with her."
In reply,
CT argued the undisputed facts showed a "replacement" trust deed was,
in fact, prepared because the 2004 Trust Deed contained material terms identical
to those in the 2002 Trust Deed. Because
the 2004 Trust Deed identified the same trustor (i.e., Raytheon), the same
property, and same beneficiary, CT argued the 2004 Trust Deed was a
"replacement" trust deed. CT
also argued it was not instructed by Bates, either expressly or implicitly, to
search the title for the Property or otherwise verify the vesting information
for the 2004 Trust Deed. Furthermore, it
argued it would be unreasonable to expect Marshall to know or recall the proper
vesting for the 2004 Trust Deed based on her handling of the SDCCU escrow.
At oral
argument on CT's motion for summary judgment, Bates argued that "[t]he
uncontroverted evidence is that [CT] knew the correct vesting information. [Bates had] [n]o need to request that they
verify it. . . . [CT] has
never disputed . . . that they knew the correct vesting information
at the time the request was made to prepare the deed of trust. The [alleged] negligence is just failing to
insert that correct vesting information in the [2004 Trust Deed], not failing
to search title [because] they didn't need to." Bates argued CT knew the correct vesting
information (i.e., that RRV3, and not Raytheon, was the correct trustor for the
2004 Trust Deed) because "the request was made during the pendency of the
[SDCCU] transaction," which involved RRV3 as the owner of the property and
trustor of the SDCCU trust deed. In
reply, CT argued: "[T]hat's information gained from another escrow which
happened prior to the actual transaction we're talking about. . . . I don't think that would be a sensible way of
verifying vesting on a deed of trust to use information acquired from an escrow
that closed weeks ago."
The trial
court granted CT's motion for summary judgment, stating:
"Even if [Bates] establishes that [CT] agreed to
'consummate' the 2004 [Trust Deed] re-recording transaction, Bates fails to
establish that [CT] was required to verify the vesting information in the 2004
[Trust Deed]. [¶] . . . [¶]
"[CT] submits evidence that the 2004 [Trust Deed]
is identical to the 2002 [Trust Deed] -- it identifies the same trustor, trust
properties and same beneficiaries as the 2002 [Trust Deed]. [Citation.]
In essence, the 2004 [Trust Deed] is a replacement -- precisely what
[CT] allegedly agreed to provide.
"It is undisputed that the 2004 [Trust Deed]
identifies Raytheon, not RRV3[,] as the trustor
[citation]. . . . Bates
provides no authority establishing that an instruction to an escrow holder to prepare
a deed of trust 'implies' a duty to search title or verify vesting. Nor is evidence that [CT] agreed to
consummate the 2004 [Trust Deed] re-recording transaction, and [CT's]
involvement in the related 2004 SDCCU Escrow, sufficient to establish an
implied obligation to verify vesting. [¶] . . . [¶]
"By virtue of artful pleading, [Bates] seeks to
recharacterize a very informal, almost casual, arrangement into a formal legal
commitment. In doing so, he seeks to
place himself in a better position than a party who requests and relies on a
preliminary report of title. But if a
party who relies on such a report is unable to hold the title company liable as
an abstractor [citation], there would appear to be no basis on which [Bates]
can do so. [Citation.]
"Absent establishing [CT's] obligation to verify
the vesting information in the 2004 [Trust Deed], Bates'[s] claims against [CT]
fail."
Accordingly, the trial court entered judgment for CT on
Bates's cross-complaint against it.
B
Based on
our independent review of the parties' summary judgment papers, we conclude
there are triable issues of material fact that preclude summary judgment in the
circumstances of this case. First, there
are triable issues of fact regarding whether CT (by Marshall or another
employee) agreed or undertook to prepare, and did prepare, a trust deed to
replace the 2002 Trust Deed. CT asserted
that neither Tucker nor Bates asked it to "properly consummate" the
re-recording transaction as an accommodation.
CT argued that because Bates cannot show it actually agreed to prepare
the 2004 Trust Deed as an accommodation to him, CT did not owe any duty of care
to him and could not have breached any such duty. Also, Marshall stated in her declaration that
she did not believe she "had any involvement with the preparation of the
2004 [Trust Deed] other than notarizing it."
However, in
opposing CT's motion for summary judgment, Bates asserted that during the SDCCU
escrow Marshall confirmed CT would prepare a trust deed to replace the 2002
Trust Deed and would have it executed and notarized. Robert L. Bates declared that while the SDCCU
escrow was still open Marshall confirmed CT "would prepare the replacement
deed of trust and ensure that it was executed and notarized soon after the
close of the SDCCU Escrow."
Furthermore, Bates asserted that, contrary to Marshall's declaration,
she or another CT employee did, in fact, prepare the 2004 Trust Deed. Robert L. Bates declared that he did not
prepare the 2004 Trust Deed and Tucker stated at his deposition that he did not
prepare it. Tucker stated that on April
23, 2004, he went to Marshall's office, received the 2004 Trust Deed from her,
and signed it with her.
Based on
the above evidence, we conclude there are triable issues of fact whether
Marshall agreed, on behalf of CT, to prepare a deed of trust to replace the
2002 Trust Deed and whether she (or another CT employee) did, in fact, prepare
the 2004 Trust Deed. Those triable
issues, when considered together with the triable issue discussed below regarding
CT's alleged undertaking, precluded summary judgment for CT.
Second,
assuming Bates shows that CT (by Marshall or another employee) agreed to--or
undertook to--prepare, and did prepare, a trust deed to replace the 2002 Trust
Deed, there is a triable issue of fact regarding the nature and extent of that
agreement or undertaking. For Bates to
prove his negligence cause of action against CT, he must initially show CT owed
him a duty of due care in the preparation of the 2004 Trust Deed. The nature and extent of any such alleged
duty is necessarily dependent on the nature and extent of CT's actual
undertaking. However, the parties
disagree regarding the nature and extent of that alleged undertaking. CT denies it agreed to "properly
consummate" the re-recording transaction or that it was instructed to
verify the 2004 Trust Deed's vesting information. In contrast, Bates asserts CT agreed to
prepare a replacement trust deed and have it executed and notarized. Furthermore, because Marshall was the escrow
officer for the pending SDCCU escrow at the time of that agreement or
undertaking, Bates asserts she knew the identity of the correct trustor for the
replacement trust deed (i.e., RRV3 and not Raytheon). Bates further asserts that because CT was the
escrow holder and title insurer for the SDCCU escrow, CT possessed the
preliminary reports issued in connection with the SDCCU Escrow, which showed
RRV3 was the owner of the Property and therefore the correct trustor for the
replacement trust deed. Therefore, Bates
asserts that at the time CT made the alleged agreement or undertaking to
prepare the replacement trust deed, it knew the correct trustor (i.e., RRV3)
for that trust deed.
Because the
parties disagree and the evidence is conflicting (or at least unclear)
regarding the nature and extent of any alleged undertaking by CT, there is a
triable issue of material fact regarding what, if anything, CT undertook to do
for Bates. Even if it is found that CT
undertook to prepare a "replacement" trust deed, the parties disagree
on the meaning of the term "replacement" in this case. CT argues the term "replacement"
trust deed merely means a trust deed with material terms identical to those in
the 2002 Trust Deed (e.g., the same trustor, beneficiary, and property). In contrast, Bates argues the term
"replacement" trust deed means a trust deed that contains the correct
trustor and other terms to the extent they are within CT's knowledge. Bates does not argue CT was asked to perform
a title search or otherwise verify the vesting information for the replacement
trust deed.
Until these
disputed questions of fact are resolved, the question of law regarding the
existence and scope of CT's duty of due care cannot be determined. Accordingly, the trial court erred by
concluding there are no triable issues of material fact and CT was entitled to
summary judgment as a matter of law. The
court erred by concluding that, assuming CT agreed to prepare a
"replacement" trust deed, CT did not owe Bates any legal duty of due
care in preparing the 2004 Trust Deed.
Unlike other cases in which the facts underlying an alleged duty of care
are undisputed, this case involves disputed facts that preclude a court from
determining the existence and scope of any legal duty of care until certain
preliminary factual findings have been made.
Disputed questions for the trier of fact include (but are not limited
to): (1) whether CT undertook to prepare a "replacement" trust deed;
(2) if so, what does the term "replacement" mean in the context of
this case; and (3) did CT actually prepare the 2004 Trust Deed? If it is found that CT agreed or undertook to
prepare a deed of trust to replace the 2002 Trust Deed and prepared the 2004
Trust Deed, CT owed Bates a duty of due care to prepare the 2004 Trust Deed
using the knowledge it gained through the related SDCCU escrow (e.g., RRV3 was
the owner of the Property and thus the correct trustor for the 2004 Trust
Deed).
On
resolution of those factual questions, the trial court may then address the
questions of law regarding the existence and scope of any legal duty of care CT
owed to Bates. Without addressing the
merits of those questions of law in this appeal, we nevertheless direct the
trial court's attention to cases discussed above relating to a voluntary or
gratuitous undertaking by a party. "A
defendant who [voluntarily or gratuitously] enters upon an affirmative course
of conduct affecting the interests of another is regarded as assuming a duty to
act, and will be liable for negligent acts or omissions [citations], because
one who undertakes to do an act must do it with care. [Citations.]
As [Prosser, Handbook of the Law of Torts, supra, § 56, p. 346] states: 'Where performance clearly has
begun, there is no doubt that there is a duty of care.' " (Bloomberg
v. Interinsurance Exchange, supra,
162 Cal.App.3d at p. 575.)
Likewise, as Valdez stated:
"It is well established that a person may become liable in tort for
negligently failing to perform a voluntarily assumed undertaking even in the
absence of a contract to do so. A person
may not be required to perform a service for another but he may undertake to do
so--called a voluntary undertaking. In
such a case the person undertaking to perform the service is under a
voluntarily assumed duty, and a failure to exercise due care is
negligence." (Valdez, supra, 129
Cal.App.2d at p. 817, italics added; see also Aim Insurance, supra, 229
Cal.App.3d at p. 216 [citing Valdez
with approval and concluding the allegations in its case "state a cause of
action for negligence based on Culcasi's alleged breach of his duty to perform
with due care the task he undertook and upon which [the plaintiff]
relied."].) As discussed above, we
do not believe the California Supreme Court has precluded the application of
the voluntary undertaking theory of duty under negligence law to cases
involving only economic loss, as in this case.
(Cf. Artiglio v. Corning Inc.,
supra, 18 Cal.4th at pp. 613-614.)
We are not
persuaded by CT's argument that Bates cannot show it owed him a duty of care
because he did not request it to perform a title search or otherwise verify the
correct vesting information for the 2004 Trust Deed. If CT voluntarily undertook to, and did,
prepare a replacement trust deed, CT owed Bates a duty of due care even if
Bates did not ask CT to perform a title search or otherwise verify the correct
vesting information for the 2004 Trust Deed.
(Cf. Valdez,
Summit Financial Holdings, Ltd. v.
Continental Lawyers Title Co. (2002) 27 Cal.4th 705, cited by CT, is
factually inapposite and does not persuade us to reach a contrary
conclusion. In Summit, the escrow holder simply followed the parties' explicit
escrow instructions requiring it to pay off a note by disbursing the payment to
Talbert. (Id. at p. 708.) Although the
escrow holder was aware Talbert had assigned the note to the plaintiff, it did
not owe the plaintiff any duty of care to make payment to it rather than
Talbert. (Ibid.) Although
holder's obligations are 'limited to faithful compliance with [the parties']
instructions' " (id. at p.
711), the facts in that case did not involve any voluntary undertaking by the
escrow holder to make payment to the plaintiff.
Because this case involves an alleged voluntary undertaking by CT,
does not require summary judgment for CT.
Similarly,
we reject CT's argument that it cannot owe any duty to third parties to an escrow
(e.g., Bates) because escrow holders cannot be liable for any acts done outside
of escrow. Schaefer v. Manufacturers Bank (1980) 104 Cal.App.3d 70, cited by
CT, is factually inapposite and does not persuade us to reach a contrary
conclusion. That case involves a side
agreement outside of escrow between the plaintiff and a third party in which
the escrow holder had no involvement. (
instructions, the escrow holder fulfilled its duties and owed no duty to the
plaintiff based on the side agreement (of which it apparently had no
knowledge). (Id. at pp. 72-73, 78.)
agreement or undertaking by the escrow holder with the plaintiff. Because this case involves an alleged
voluntary undertaking by CT, Schaefer
is inapposite to this case and does not require summary judgment for CT.
We also
reject CT's argument that it is entitled to summary judgment because it
complied with the SDCCU escrow instructions and therefore could not have
breached any duty it owed to a nonparty to those instructions (e.g.,
Bates). However, that argument is
premised on CT's argument, discussed above, that it could not owe a third party
any duty because its duties are limited to those owed to parties to the escrow
and that arise out of explicit escrow instructions. However, as we concluded above, if CT
voluntarily agreed or undertook to prepare the 2004 Trust Deed, it owed Bates a
duty of due care even if Bates was not a party to the SDCCU escrow or if that
undertaking was not set forth in the SDCCU escrow instructions. None of the cases cited by CT are apposite to
this case or otherwise persuade us to reach a contrary conclusion. To the extent CT argues it has not breached
any duty it owed to Bates based on its voluntary undertaking, it does not
persuade us there are no triable issues of material fact regarding whether it
breached that duty and it is entitled to summary judgment as a matter of law.
Although CT
also argues it cannot be liable for negligence because Bates did not expressly
or implicitly instruct it to verify the vesting information for the 2004 Trust
Deed, Bates asserted below, and asserts on appeal, that his negligence cause of
action is not based on any request that CT verify the vesting information. Rather, Bates asserts CT's negligence
liability is based on its duty of due care owed him arising out of its
voluntary undertaking and its knowledge that RRV3, and not Raytheon, was the
correct trustor for the 2004 Trust Deed.
Therefore, the absence of any request by Bates that CT verify the
vesting information for the 2004 Trust Deed does not entitle CT to summary
judgment.
Finally, CT
argues Bates's negligence cause of action is, in effect, a title insurance
claim. Because Bates did not purchase
title insurance for the 2004 Trust Deed, CT argues he cannot recover on that
claim. Bates concedes he did not
purchase title insurance or request that CT perform a title search for the 2004
Trust Deed. Nevertheless, Bates asserts
his negligence cause of action against CT is independent of any contractual
claim he might have had he purchased title insurance or any other cause of
action he may have had had he requested that CT perform a title search. Had Bates purchased title insurance, he
presumably would have had an alternative or secondary means of obtaining relief
for the injury he suffered in addition to his negligence cause of action. A breach of contract claim and a negligence
claim generally are not, in effect, the same cause of action. To the extent the trial court concluded
otherwise, it erred.
IV
CT filed a
cross-appeal challenging the order denying its motion for leave to augment its
expert witness list or, in the alternative, leave to submit tardy expert
witness information. However, because,
as we explain below, that order is nonappealable, we dismiss the cross-appeal.
A
"The
existence of an appealable judgment is a jurisdictional prerequisite to an
appeal. A reviewing court must raise the
issue on its own initiative whenever a doubt exists as to whether the trial
court has entered a final judgment or other order or judgment made appealable
by . . . section 904.1."
(Jennings v. Marralle (1994) 8
Cal.4th 121, 126.) "A reviewing
court has jurisdiction over a direct appeal only when there is (1) an
appealable order or (2) an appealable judgment.
[Citations.] . . . [¶]
A trial court's order is appealable when it is made so by
statute." (Griset v. Fair Political Practices Com. (2001) 25 Cal.4th 688,
696.) "[A]n attempt to appeal from
a nonappealable judgment or order will ordinarily be dismissed." (Marsh
v. Mountain Zephyr, Inc. (1996) 43 Cal.App.4th 289, 297.)
Section
904.1 generally sets forth those judgments and orders that are appealable. In general, an appeal may be taken from a
judgment other than an interlocutory judgment.
(§ 904.1, subd. (a)(1).)
Accordingly, interlocutory rulings or orders, such as discovery and
evidentiary rulings, are generally not appealable. (Fraser-Yamor
Agency, Inc. v. County of Del Norte (1977) 68 Cal.App.3d 201, 207;
(2011) 200 Cal.App.4th 1424, 1432-1433; Datig
v. Dove Books, Inc. (1999) 73 Cal.App.4th 964, 984; Haro v. City of Rosemead (2009) 174 Cal.App.4th 1067, 1078-1079
[dismissing appeal from nonappealable order denying motion for leave to amend
complaint].)
However,
certain nonappealable intermediate rulings may be challenged on appeal from a
subsequent final judgment if they are directly related to the judgment being
appealed. Section 906 provides:
"Upon an appeal pursuant to Section 904.1 or 904.2,
the reviewing court may review the verdict or decision and any intermediate
ruling, proceeding, order or decision which involves the merits
order appealed from or which
substantially affects the rights of a party, . . . and may affirm,
reverse or modify any judgment or order appealed from
. . . ." (Italics
added.)
In Cahill v. San Diego
Gas & Electric Co. (2011) 194 Cal.App.4th 939 (Cahill), we stated: "[I]f a decision (e.g., final judgment) is
properly appealed pursuant to section 904.1 or 904.2, section 906 allows us to
'review' certain 'intermediate' orders or other rulings not otherwise directly
appealable." (Id. at p. 946.) There are
three circumstances in which we may review a nonappealable order pursuant to
section 906. (Id. at pp. 946-948.) The
nonappealable order must either: (1) "involve[] the merits" of the
judgment appealed from; (2) "necessarily affect[]" the judgment
appealed from; or (3) "substantially affect[] the rights of a
party." (§ 906;
"The clear import of that provision is to allow an
appellate court to review rulings, orders, or other decisions that led up to,
or directly related to, the judgment or order being appealed to the extent they
substantially affected the rights of one of the parties to the appeal. It is implicit within section 906's language
that the 'intermediate
| Description | Cross-complainant Robert F. Bates, trustee of the Robert F. Bates Family Trust dated 11-29-90 (Bates) appeals a judgment after the trial court granted the motion for summary judgment filed by cross-defendant Chicago Title Company (CT) in his negligence cross-action against it. Bates alleges CT was negligent in preparing a deed of trust to replace one he had previously reconveyed. On appeal, Bates contends the trial court erred by concluding CT did not owe him a legal duty of due care in preparing the replacement trust deed. Because we conclude there are triable issues of material fact regarding whether CT undertook to, and did, prepare the trust deed and the nature and extent of any concomitant undertaking, we conclude the trial court erred by granting CT's motion for summary judgment. |
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