2018-00229164-CU-FR

Mihaela Badea-Mic vs. Augustin Detres

Nature of Proceeding: Hearing on Demurrer to Complaint

Filed By: Self, Markus D.

*** If oral argument is requested, the parties must at the time oral argument is requested notify the clerk and opposing party of the specific discovery requests that will be addressed at the hearing. The parties are also reminded that pursuant to local court rules, only limited oral argument is permitted on law and motion matters. ***

Defendant Orange Coast Title Co.’s (“OCT”) demurrer to Plaintiff Mihaela Badea-Mic’s complaint is ruled upon as follows.

This is an action regarding the unlawful sale of Plaintiff’s property. Plaintiff alleges that after she and her husband, Augustin Detres (“Detres”), separated, Detres executed a quit claim deed transferring all rights and interest in the property. The judgment of divorce was entered in March 2013, giving the property to Plaintiff. However, in November 2015, Detres and other individual defendants, coerced Plaintiff into signing a stipulation to sell the property. In July 2017, Detres obtained an order from family court directing the sale of the property. The individual buyer defendants offered to buy the property at a price significantly below the appraised value. Placer Title Company had initially been engaged to act as the escrow and title company, but withdrew after learning of the facts. OCT thereafter elected to proceed with the sale. In September 2017, the elisor for the family law court signed over the property to Defendants Ngo and Nguyen.

Both parties’ requests for judicial notice are granted. In taking judicial notice of these documents, the court accepts the fact of their existence, not the truth of their contents. (See Professional Engineers v. Dep’t of Transp. (1997) 15 Cal.4th 543, 590 [judicial notice of findings of fact does not mean that those findings of fact are true]; Steed v. Department of Consumer Affairs (2012) 204 Cal.App.4th 112, 120-121.)

OCT demurs to the following causes of action which are alleged against it:

Negligence, Slander of Title, Negligent Infliction of Emotional Distress, and Quiet Title.

Negligence

Plaintiff alleges that OCT owed a general duty of care to Plaintiff as the escrow and title company, and that it owed a duty of good faith and fair dealing with Plaintiff as owner of the property.

OCT demurs on the ground that Plaintiff fails to sufficiently allege a duty.

The duty of an escrow holder is to comply strictly with the instructions of his principal. It is generally held that no liability attaches to the escrow holder for his failure to do something not required by the terms of the escrow or for a loss incurred while obediently following his escrow instructions. (Axley v. Transamerica Title Ins. Co.

(1978) 88 Cal.App.3d 1, 8-9.)

Here, Plaintiff fails to allege that OCT failed to comply with the parties’ escrow instructions. Moreover, it is unclear whether Plaintiff was a party to the escrow instructions given that the elisor for the family law court signed over the property to Defendants Ngo and Nguyen. Plaintiff’s allegation and argument that OCT breached its duty of good faith and fair dealing is unavailing. Here, there is no contract alleged between OCT and Plaintiff such that a duty of good faith and fair dealing is imposed. The case upon which Plaintiff relies, Seeley v. Seymour (1987) 190 Cal.App.3d 844, does not assist her. In Seeley, Safeco Title Insurance Company agreed to record a Memorandum of Agreement regarding a ground lease of which the plaintiff had no knowledge. The court recognized that an escrow officer’s duty is limited, but explained that “[n]o party has cited, nor have we found, any case which directly discusses the liability of a title company, not acting as escrow agent, for the negligent recordation of a nonrecordable document.” (Seeley v. Seymour (1987) 190 Cal.App.3d 844, 860.) Therefore, the court applied that Biakanja factors to determine whether a duty exists.

Here, there are no allegations that OCT acted as anything other than an escrow officer or that it recorded a “nonrecordable” document.

The demurrer is SUSTAINED with leave to amend.

Slander of Title

OCT argues that Plaintiff lacks standing, there was no false publication, and that the recording of the grant deed is absolutely privileged. Plaintiff’s opposition fails to respond to the merits of these arguments and merely recited the elements of the cause of action. The Court construes Plaintiff’s failure to oppose the arguments as a concession on the merits.

The demurrer is SUSTAINED with leave to amend.

Negligent Infliction of Emotional Distress

The demurrer is SUSTAINED with leave to amend because Plaintiff fails to sufficiently allege duty.

Quiet Title

The demurrer is SUSTAINED with leave to amend. Plaintiff fails to allege that OCT has an adverse interest in the property.

Leave to amend is granted as this is OCT’s first challenge to the complaint.

Where leave to amend is granted, Plaintiff may file and serve a first amended

complaint (“FAC”) by no later than July 5, 2018, Response to be filed and served within 30 days thereafter, 35 days if the FAC is served by mail. (Although not required by any statute or rule of court, Plaintiff is requested to attach a copy of the instant minute order to the FAC to facilitate the filing of the pleading.)

The minute order is effective immediately. No formal order pursuant to CRC Rule 3.1312 or further notice is required.