Alexander Kaay vs Chicago Title Insurance Co et al

Case Number

22CV02308

Case Type

Hearing Date / Time

Mon, 11/25/2024 - 10:00

Nature of Proceedings

Motion: Summary Judgment

Tentative Ruling

Alexander Kaay v. Chicago Title Insurance Co.       

Case No. 22CV02308          

Hearing Date: November 25, 2024                            

HEARING:              Defendant Chicago Title Insurance Company’s Motion for Summary Judgment or, in the Alternative, Summary Adjudication.

ATTORNEYS:        For Plaintiff Alexander Kaay: E. Patrick Morris, Law Offices of E. Patrick Morris

For Defendant Chicago Title Insurance Company: Christopher D. Greinke, Fidelity National Law group

TENTATIVE RULING:  

The motion of Chicago Title Insurance Company for summary judgment is granted.

Background:

Plaintiff Alexander Kaay filed his original complaint in this matter on June 20, 2022. As alleged in the original complaint, plaintiff bought undeveloped property located at 1160 Barger Canyon Road in the County of Santa Barbara (the property) from Briar Yong (Yong) in August 2014. (Complaint, ¶ 4.) Defendant Chicago Title Insurance Co. (Chicago Title) issued a policy of title insurance to plaintiff (the policy) in which it warranted that the title plaintiff was purchasing was valid and enforceable. (Id. at ¶ 4.) The title plaintiff purchased was not valid and was in question. (Id. at ¶ 6.) Chicago Title refused to clear the title to the property as requested by plaintiff. (Ibid.) The caption page of the complaint alleges a cause of action for “damages due to breach of contract”. (Id. at p. 1.)

On January 19, 2023, Chicago Title filed a demurrer to the complaint and a motion to strike the prayer for attorneys’ fees alleged in the complaint. Plaintiff did not file an opposition to the demurrer or the motion to strike.

On April 17, 2023, the court sustained the demurrer of Chicago Title with leave to amend, finding that plaintiff had not attached a copy of the policy to the complaint and failed to plead the policy by its terms or by the substance of its relevant terms. (Apr. 17, 2023, Minute Order.) The court also granted the motion to strike of Chicago Title with leave to amend, finding that the complaint failed to allege a basis for the recovery of attorneys’ fees.

On April 17, 2023, plaintiff filed his first amended complaint (FAC), for damages arising from breach of contract and breach of special relationship of insurance. The FAC expanded on the allegations of plaintiff’s purchase of the property from Yong, and his purchase of the policy from Chicago Title. The policy was attached to and incorporated into the FAC. As alleged in the FAC, under the policy, Chicago Title agreed to pay all costs, attorneys’ fees and expenses incurred in defense of the title. Plaintiff further alleged that he paid valid consideration, and has performed all things required of him under the policy.

The FAC alleged further that the title insured by Chicago Title was “unmarketable as of the date the policy was issued,” and that any competent title insurance company would have so determined before issuing the policy. Plaintiff requested that Chicago Title defend the title and, if there were damages due to the title issued, to pay those damages. Chicago Title refused to defend the claim of unmarketability, and has refused to pay any damages for loss of marketable title.

On May 30, 2023, Chicago Title filed a demurrer to the FAC on the grounds that the cause of action for breach of contract was barred by the applicable 2-year statute of limitations, and that absent any allegations to support plaintiff’s conclusion that his title is “unmarketable,” the FAC failed to state a cause of action for breach of the policy.

Also on May 30, 2023, Chicago Title filed a motion to strike the prayer for attorneys’ fees alleged in the FAC on the ground that the FAC did not allege any basis for a claim for attorneys’ fees.

On July 31, 2023, the court overruled the demurrer of Chicago Title as to the statute of limitations bar, and sustained the demurrer, with leave to amend, as to plaintiff’s failure to specifically allege facts constituting the breach of the policy. The court also granted the motion to strike the prayer for attorneys’ fees, with leave to amend to permit plaintiff one further opportunity to allege a proper basis for the attorneys’ fees claim.

On September 21, 2023, plaintiff filed a second amended complaint (SAC), with a single cause of action for breach of contract. As alleged in the SAC:

In connection with plaintiff’s purchase of the property, and in reliance on the representations of Chicago Title that it was skilled in the process of confirming valid title to real property and would use that expertise for the benefit of plaintiff by confirming the validity of the title to the property, plaintiff agreed to pay a fee to Chicago Title for it to research and make an agreement to confirm that the title being transferred was valid, marketable, and without defect, as well as to insure that marketability in connection with plaintiff paying the premium requested by Chicago Title.

To that end, Chicago Title made an offer to insure the title, subject to terms and conditions, all as set forth in a Preliminary Title Report prepared and presented to plaintiff prior to the purchase. Chicago Title agreed to and did insure the validity and marketability of the title being transferred, representing that it would insure against loss or damage sustained or incurred by reason of any defect in title and/or unmarketability of the title.

The SAC also alleges, that, unknown to plaintiff, the title insured by Chicago Title was “unmarketable as of the date the policy was issued,” and that any competent title insurance company would have so determined before issuing the policy. Plaintiff believes that discovery will determine that the claimed unmarketability was due to the fact that the public records of title did not readily demonstrate that the lot being insured was legally created with proper documentation of its creation. The title was in question based in part on a claim by the County of Santa Barbara that the lot was illegal.

During the time the title was in question, the balloon payment on a loan made by Yong came due. Yong commenced a non-judicial foreclosure. Plaintiff was forced to commence a lawsuit and seek a Temporary Restraining Order to stop the foreclosure, which was issued based in part on the lack of finality regarding the validity of the title conveyed by Yong. Chicago Title refused to defend the claim of unmarketability, or agree to clear the title, claiming only that the claim “did not implicate any of the Policy’s Covered Risks and is otherwise excluded from coverage by the Exclusions . . ..”

Once the title issue was resolved, plaintiff again requested that Chicago Title clear the title and pay the losses suffered by plaintiff due to lack of marketable title, but Chicago Title failed to perform its obligations under the policy.

Chicago Title demurred to the SAC. On November 27, 2023, the court overruled the demurrer and ordered Chicago Title to file its answer no later than December 7, 2023.

Chicago Title filed its answer to the SAC on December 1, 2023, setting forth a general denial and asserting 34 affirmative defenses.

Chicago Title now moves for summary judgment or, in the alternative, summary adjudication, on the grounds that: (1) Chicago Title properly denied coverage for plaintiff’s title insurance claim based on Section 1(a) of the Exclusions from Coverage of a policy of title insurance; (2) There was no potential for coverage under a policy of title insurance; (3) The two year statute of limitations bars plaintiff’s action; (4) Plaintiff cannot establish a cause of action for breach of contract or breach of special relationship of insurance; and (5) Plaintiff lacks sufficient evidence to establish a triable issue of fact as to whether there is a breach of contract or breach of special relationship of insurance.

Plaintiff opposes the motion on the grounds that Chicago Title fails to meet its burden.

Analysis:

Standard on Summary Judgment

A defendant’s motion for summary judgment asks the court to determine that the entire action has no merit, and to terminate the action without the necessity of a trial. (Code Civ. Proc., § 437c, subd. (a).) The procedure enables the court to look behind the pleadings to determine whether the party against whom the motion is directed has evidence to back up the claims. The court must determine from the evidence presented that there is no triable issue as to any material fact, and that the moving party is entitled to judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).)

The moving party “bears the burden of persuasion that that there is no triable issue of material fact and that he is entitled to judgment as a matter of law.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) Consequently, a defendant moving for summary judgment bears the burden of persuasion that one or more elements of the cause of action in question cannot be established, or that there is a complete defense thereto. (Ibid.) The motion must be supported by evidentiary facts, not merely the ultimate facts. Further, conclusions of fact or law are not sufficient to support a motion for summary judgment. (Snider v. Snider (1962) 200 Cal.App.2d 741, 751.) 

“Summary judgment law in this state no longer requires a defendant moving for summary judgment to conclusively negate an element of the plaintiff’s cause of action (e.g., if “X” is an essential element, by proving “not X”). [Citation.] Instead, a defendant may simply show the plaintiff cannot establish an essential element of the cause of action “ ‘by showing that the plaintiff does not possess, and cannot reasonably obtain, needed evidence.’ ” [Citation.] Thus, rather than affirmatively disproving or negating an element (e.g., causation), a defendant moving for summary judgment has the option of presenting evidence reflecting the plaintiff does not possess evidence to prove that element.” (Leyva v. Garcia (2018) 20 Cal.App.5th 1095, 1102.)

Once a moving defendant meets its initial burden, the burden shifts to the plaintiff to produce evidence to prove the existence of a triable issue of fact regarding that element of its cause of action or the defense at issue in the motion, and if plaintiff is unable to do so, defendant will be entitled to judgment as a matter of law. (Saelzler v. Advanced Group 400 (2001) 35 Cal.4th 763, 780-781.)

In ruling on a motion for summary judgment, the trial court must consider all of the evidence and all of the inferences reasonably drawn therefrom (Code Civ. Proc., § 437c, subd. (c)), and must view the evidence and inferences in the light most favorable to the opposing party. (Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 843.) In examining the sufficiency of the affidavits filed in connection with a summary judgment motion, those filed by the moving party are strictly construed, and those of the opposing party are liberally construed. (D’Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 20-21.)

In resolving the motion, the court may not weigh the evidence. (Binder v. Aetna Life Ins. Co. (1999) 75 Cal.App.4th 832, 840.) Rather, the role of the trial court in resolving a summary judgment motion is to determine whether issues of fact exist, not to decide the merits of the issues. (Molko v. Holy Spirit Assn. (1988) 46 Cal.3d 1092, 1107.) A triable issue of material fact exists 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. (Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 850.) Any doubts as to the propriety of granting the motion should be resolved in favor of the party opposing the motion. (Molko v. Holy Spirit Assn., supra at p. 1107.)

            Plaintiff’s Objection to Declaration of Kenneth E. Dzien

In opposition, plaintiff objects to the declaration of Chicago Title’s expert witness Kenneth E. Dzien (Dzien), arguing that “[t]he entire Dzien declaration must be disregarded, as it lacks foundation to demonstrate with any specificity or clarity (his “ ‘qualifications’ ” consist entirely of unverifiable statements by the witness) his background training or experience, he has failed to identify with any specificity the evidence he relies upon, and he fails to qualify to render legal opinions.” (Opp., p. 2, l. 25 - p. 3, l. 1.)

Plaintiff cites no legal authority for his objections to the Dzien declaration.

“(a) A person is qualified to testify as an expert if he has special knowledge, skill, experience, training, or education sufficient to qualify him as an expert on the subject to which his testimony relates. Against the objection of a party, such special knowledge, skill, experience, training, or education must be shown before the witness may testify as an expert.

“(b) A witness’ special knowledge, skill, experience, training, or education may be shown by any otherwise admissible evidence, including his own testimony.” (Evid. Code, § 720.)

To establish his qualifications, Dzien declares: “I am experienced in the area of real property. I have over 50 years of experience handling complex, high liability title and escrow claims. I was a Claim Center Manager for a title insurer. I was annually responsible for 3,000 pending claims, the opening and analysis of 1,500 new title and escrow claims, and the resolution of 2,000 pending claims. In 1969, I received formal training in search and examination of land title. From 1969 through 2008, I was employed with various title, escrow and title insurance companies as a title examiner, litigation department attorney, assistant general counsel, associate general counsel, office counsel, underwriter, divisional claims manager, general counsel, and chief underwriter. Since 2008, I have worked as a title insurance, escrow and real property consultant.” (Dzien Decl., ¶ 2.)

Dzien declares that he has “reviewed the documents in the chain of title/recorded documents for the Property, including the documents referenced in the Request for Judicial Notice and attached to the Appendix of Evidence filed concurrently herewith.” (Dzien Decl., ¶ 5.)

The definitive criteria in guidance of trial court’s determination of qualifications of an expert witness rest primarily on occupational experience. (Huffman v. Lindquist (1951) 37 Cal.2d 465, 478.)

“ ‘Expertise, in other words, ‘ “is relative to the subject,” ’ and is not subject to rigid classification according to formal education or certification.’ ” [Citation.] Rather, an expert’s qualifications can be established in any number of different ways, including “ ‘a showing that the expert has the requisite knowledge of, or was familiar with, or was involved in, a sufficient number of transactions involving the subject matter of the opinion.’ ” [Citation.]” (ABM Industries Overtime Cases (2017) 19 Cal.App.5th 277, 294.)

Dzien has sufficiently testified as to his training and experience in real estate title matters to qualify as an expert. He has also sufficiently described the documents that he relied on in forming his opinions. As such, plaintiff’s objection is overruled.

           

Separate Statement and Application of the Facts

“(1) The Separate Statement of Undisputed Material Facts in support of a motion must separately identify:

“(A) Each cause of action, claim for damages, issue of duty, or affirmative defense that is the subject of the motion; and

“(B) Each supporting material fact claimed to be without dispute with respect to the cause of action, claim for damages, issue of duty, or affirmative defense that is the subject of the motion.

“(2) The separate statement should include only material facts and not any facts that are not pertinent to the disposition of the motion.” (Cal. Rules of Court, rule 3.1350(d)(1-2).)

“If the opposing party contends that additional material facts are pertinent to the disposition of the motion, those facts must be set forth in the separate statement. The separate statement should include only material facts and not any facts that are not pertinent to the disposition of the motion. Each fact must be followed by the evidence that establishes the fact. Citation to the evidence in support of each material fact must include reference to the exhibit, title, page, and line numbers.” (Cal. Rules of Court, rule 3.1350(f)(3).)

Here, Chicago Title sets forth 84 facts which it contends are undisputed (UMFs). (Note: There are actually 42 different UMFs, rather than 84 different UMFs, due to a repetition of them to comply with the requirements above.)

Plaintiff has provided his separate statement (PSS), either admitting facts as undisputed or disputing facts. Plaintiff does not set forth any additional material facts.

Chicago Title objects to PSS arguing that it does not comply with California Rules of Court, rule 3.1350, on the basis that plaintiff “simply asserted improper and baseless opinions and arguments.” While it is true that plaintiff did include some improper argument in response to the UMFs, he does state whether the UMF is disputed and, if disputed, references evidence he claims supports his position. The objection is overruled. However, some of the UMFs are not reasonably disputed by plaintiff as the responses merely contain legal argument that is not supported by an expert opinion or other admissible evidence.

In reply, plaintiff objects to Chicago Title’s appendix of evidence on the grounds that it lacks sufficient book marking or internal pagination. The objection is overruled. Plaintiff also objects to Chicago Title’s UMFs, arguing that the statement “often combines multiple facts into a single item, making analysis and response unreasonably time consuming.” That objection is also overruled.

“Separate statements serve a laudable purpose. As explained in Weil & Brown, California Practice Guide (The Rutter Group 1996) Civil Procedure Before Trial, paragraph 10:94.1, pp. 10–31, 10–32, these documents are ‘intended to permit the judge to determine quickly whether the motion is supported by sufficient undisputed facts. If the opposing statement disputes an essential fact alleged in support of the motion, the judge merely has to review the evidence cited in support of that fact. This saves the judge from having to review all the evidentiary materials filed in support of and in opposition to the motion.’ ” (Kulesa v. Castleberry (1996) 47 Cal.App.4th 103, 113.)

The following relevant facts are either undisputed or not reasonably disputed:

Plaintiff is the owner of real property commonly known as 1160 Barger Canyon Road, Santa Barbara. (PSS, ¶ 1.) Plaintiff purchased the property from Yong in August 2014. (PSS, ¶ 3.) On August 28, 2014, a grant deed was recorded with the Santa Barbara County Recorder’s Office conveying the property from Yong to plaintiff. (PSS, ¶ 4.)

In connection with plaintiff’s purchase of the property, he obtained a policy of title insurance underwritten by Chicago Title. (PSS, ¶ 5.) Plaintiff is the named insured under the policy. (PSS, ¶ 6.) The date of policy for the title insurance policy is August 27, 2014. (PSS, ¶ 7.)

“No notice of the enforcement of a violation of a law, ordinance or governmental regulation affecting the Property or a notice of a defect, lien, or encumbrance resulting from a violation or alleged violation affecting the Property had been recorded in the public records, as defined in Section 1(h) of the Conditions and Stipulations of the Policy, as of August 27, 2014.” [Not reasonably disputed as plaintiff’s response is merely counsel’s argument regarding the legal meaning of documents that were prepared after the date referenced in the UMF, and plaintiff has provided no expert declaration, or other evidence, refuting the UMF.] (PSS, ¶ 8.)

“On or about August 21, 2017, the County of Santa Barbara concluded the following concerning the Property: “ ‘The subject parcel was created by a Gift Deed recorded February 3, 1967 recorded in Book 2189 of Official Records at Page 154. The exception described in this deed created a new parcel and thereby making both the exemption and the subject parcel illegally created. This conveyance was made in violation of Santa Barbara County Ordinance 1722 as amended by Ordinance 1751 in effect at the time.’ ” (PSS, ¶ 9.)

“A letter from the County of Santa Barbara Public Works Department to . . . Kaay’s surveyor, dated August 28, 2017, states, among other things: “ ‘We have determined, based on the information submitted and consultation with County Counsel, that he subject parcel . . . was created by an illegal land division in 1967 by a gift deed . . ..’ ” “ ‘Santa Barbara County Ordinance 1722 as amended by Ordinance 1751 was in effect,’ ” “ ‘documentation provided indicates the gift deed recorded in 1967 did not comply with said ordinance,’ ” “ ‘an unconditional Certificate of Compliance cannot be issued on this parcel. . . .’ ” and “ ‘you must apply or a Conditional Certificate of Compliance for this parcel.’ ” (PSS, ¶ 10.)

On May 3, 2018, plaintiff submitted an application for a Conditional Certificate of Compliance for the property. (PSS, ¶ 12.) Santa Barbara Planning and Development responded to plaintiff’s application by letter dated June 1, 2018. (PSS, ¶ 13.)

A letter from Santa Barbara Planning and Development to plaintiff’s surveyor, dated June 1, 2018, states, among other things: “Based on our preliminary review of your application, we put forth the following advisory statements: 1. Project Conditions. The property was created as an illegal land division in 1967 by a gift deed . . . and was transferred to [plaintiff] in 2014. According to County Surveyor Records, [plaintiff] has no responsibility for the subdivision that created the property . . ..” (PSS, ¶ 14.)

The Santa Barbara Public Works Department performed a supplemental review of the project for compliance with State Law and Local Ordinances based on additional information submitted on May 8, 2019. [Not reasonably disputed.] (PSS, ¶ 15.)

“On or about May 14, 2019, the County of Santa Barbara concluded the following concerning the Property: “ ‘The subject parcel was crated by a Gift Deed recorded February 3, 1967. . .. This deed finalized Lot Split #465 approved in June of 1957. This conveyance was made in compliance with Santa Barbara County Ordinance 791 as amended by Ordinance 796, 834 and 878 in effect at the time. Based on the supplemental documentation submitted, . . . I believe the subject parcel can be issued an UNCONDITIONAL Certificate of Compliance.” (PSS, ¶ 16.)

On June 5, 2019, a Certificate of Compliance for the Property was recorded with the Santa Barbara County Recorder’s Office, which states: “Notice is hereby filed, as a public record, that [plaintiff’s] property . . . and the division crating said real property comply with the applicable provisions of the State Subdivision Map Act and County Ordinances enacted pursuant thereto. This certificate relates only to issues of compliance or noncompliance with the Subdivision Map Act and local ordinances enacted pursuant thereto. The parcel described herein may be sold, leased, or financed without further compliance with the Subdivision Map Actor any local ordinance enacted pursuant thereto. Development of the parcel may require issuance of a permit or permits, or other grants of approval.” (PSS, ¶¶ 17, 18.)

On February 11, 2021, plaintiff filed an action against Yong, Case No. 21CV00591, alleging causes of action for injunctive relief, expungement of notice of default, damages due to breach of contact to sell title, and damages due to breach of contract to sell undamaged property. (PSS, ¶ 20.)

On October 22, 2019, plaintiff, by way of a letter, tendered a title insurance claim to Chicago Title, and Chicago title received the letter on October 29, 2019. (PSS, ¶¶ 25, 26.) The letter states that “the lot is lacking a Certificate of Compliance or equivalent documentation certifying that it is a legal lot,” “the lot is illegal as it was allegedly created by an illegal land division by gift deed in 1957, and therefore needs a new certificate of [compliance] with a de novo review of the lot split” and it is the “County’s belief that the property is an illegal lot.” (PSS, ¶ 27.)

On June 19, 2020, by way of a letter, Chicago Title denied coverage for the claim under the policy. (PSS, ¶ 28.)

“Section 1(a) of the Exclusions from Coverage of the Policy provides that “ ‘[t]he following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys’ fees or expenses with arise by reason of: 1. (a) Any law, ordinance or governmental regulation (including but not limited to building or zoning laws, ordinances, or regulations) restricting, regulating, prohibiting or relating to (i) the occupancy, use, or enjoyment of the land; (ii) the character, dimensions or location of any improvement now or hereafter erected on the land, (iii) a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part; or (iv) environmental protection, or the effect of any violation of these laws, ordinances or governmental regulations, except to the extent that a notice of the enforcement thereof or a notice of a defect, lien, or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy.” (PSS, ¶ 36.)

“Section 1(h) of the Conditions and Stipulations of the Policy defines public records as follows: “ ‘ “public records” ’: records established under state statutes at Date of Policy for the purpose of imparting constructive notice of matters relating to real property to purchasers for value and without knowledge.’ “ (PSS, ¶ 37.)

“Section 7 of the Conditions and Stipulations of the Policy provides, in pertinent part, that “ ‘[t]his policy is a contract indemnity against actual monetary loss or damage sustained or incurred by the insured claimant who has suffered loss or damage by reason of matters insured against by this policy and only to the extent herein described.’ ” (PSS, ¶ 38.)

“Section 1(i) of the Conditions and Stipulations of the Policy defines unmarketability of title as follows: “ ‘ “unmarketability of the title” ‘: an alleged or apparent matter affecting the title to the land, not excluded or excepted from coverage, which would eliminate a purchaser of the estate or interest described in Schedule A or the insured mortgage to be released from the obligation to purchase by virtue of a contractual condition requiring the delivery of marketable title.’ ” (PSS, ¶ 39.)

“An illegal land division and/or a violation of the Subdivision Map Act has no potential to affect title to property.” [Not reasonably disputed as plaintiff’s response is merely counsel’s legal argument, and plaintiff has provided no expert declaration, or other evidence, refuting the UMF.] (PSS, ¶ 40.)

“An illegal land division and/or a violation of the Subdivision Map Act does not represent a third person’s claim to an interest in the property or otherwise cast doubt on who owns the property.” [Not reasonably disputed as plaintiff’s response is merely counsel’s legal argument, and plaintiff has provided no expert declaration, or other evidence, refuting the UMF.] (PSS, ¶ 41.)

Plaintiff has had marketable title to the property since he purchased it. [Not reasonably disputed as plaintiff’s response is merely counsel’s legal argument, and plaintiff has provided no expert declaration, or other evidence, refuting the UMF.] (PSS, ¶ 42.)

            Denial of Coverage for Plaintiff’s Claim

As noted, plaintiff’s action is for breach of contract.

“To prevail on a cause of action for breach of contract, the plaintiff must prove (1) the contract, (2) the plaintiff’s performance of the contract or excuse for nonperformance, (3) the defendant’s breach, and (4) the resulting damage to the plaintiff.” (Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186.)

“In California, “ ‘ “[t]itle insurance is a contract for indemnity under which the insurer is obligated to indemnify the insured against losses sustained in the event that a specific contingency, e.g., the discovery of a lien or encumbrance affecting title, occurs. [Citations.] [¶] Accordingly, when the contingency insured against under the policy occurs, the title insurer is not, by that fact alone, liable to the insured for damages in contract or tort, but rather is obligated to indemnify the insured under the terms of the policy. . . .’ ” [Citation.]” (First American Title Ins. Co. v. XWarehouse Lending Corp. (2009) 177 Cal.App.4th 106, 113.)

“The law clearly states that a title insurance policy is a contract of indemnity, not one of guarantee. The insurer does not represent that title is in any particular condition, but only agrees to indemnify to the extent the insured suffers a loss caused by defects in the title or encumbrances on the title.” (Karl v. Commonwealth land Title Ins. Co. (1993) 20 Cal.App.4th 972, 978.)

“A title insurance policy is interpreted under “ ‘the well-established rules on interpretation of insurance agreements.’ ” [Citation.] “ ‘In general, interpretation of an insurance policy is a question of law and is reviewed de novo under settled rules of contract interpretation. [Citations.] ‘ “The fundamental rules of contract interpretation are based on the premise that the interpretation of a contract must give effect to the “ ‘mutual intention’ ” of the parties. “ ‘Under statutory rules of contract interpretation, the mutual intention of the parties at the time the contract is formed governs interpretation. (Civ. Code, § 1636.) Such intent is to be inferred, if possible, solely from the written provisions of the contract. [Citation.] The ‘ “clear and explicit” ’ meaning of these provisions, interpreted in their ‘ “ordinary and popular sense,” ’ unless ‘ “used by the parties in a technical sense or a special meaning is given to them by usage” ’ [citation], controls judicial interpretation. [Citation.]” ‘ ” [Citation.]’ ” [Citation.]” (Dollinger DeAnza Associates v. Chicago Title Ins. Co. (2011) 199 Cal.App.4th 1132, 1145-1146.)

Title insurers “may opt to limit their potential liability by declining certain risks without violating any statutory or common law obligation.” (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 59.)

“If the terms of a promise are in any respect ambiguous or uncertain, it must be interpreted in the sense in which the promisor believed, at the time of making it, that the promisee understood it.” (Civ. Code, § 1649.)

Chicago Title argues that it properly denied coverage for plaintiff’s claim based on Section 1(a) of the Exclusions from Coverage of the Policy. The language of that section is quoted in full above.

Chicago Title asserts that plaintiff’s claim relates to noncompliance with the Subdivision Map Act and County of Santa Barbara Ordinances due to the 1967 illegal gift deed that crated a new parcel. Plaintiff does not dispute this fact and the fact is supported by admissible evidence. Additionally, the action plaintiff filed against Yong, as Case No. 21CV00591 (Chicago Title’s Exh. B), makes clear that plaintiff’s dispute was based on the illegal lot split in violation of the Subdivision Map Act and County of Santa Barbara Ordinances.

As such, plaintiff’s claim was properly denied  based on Section 1(a) of the Exclusions from Coverage of the Policy provision because the claim arose entirely from the purported illegal lot split in violation of “law, ordinance or governmental regulation . . . restricting, regulating, prohibiting or relating to (i) the occupancy, use, or enjoyment of the land; . . . (iii) a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part . . .” Plaintiffs matter does not fall under any exception to the exclusion because there was no evidence showing that a “notice of the enforcement thereof or a notice of a defect, lien, or encumbrance resulting from a violation or alleged violation affecting

the land has been recorded in the public records at Date of Policy.” (Italics added.)

Based on the unambiguous language of the title insurance policy, Chicago Title has shown that it properly denied plaintiff’s claim, under the exclusions from coverage, and there are no other triable issues of material fact. It has done so by presenting admissible evidence and citing to appropriate legal authorities. Plaintiff, on the other hand, has not presented any admissible evidence that tends to show that the exclusions do not apply. Plaintiff relies on argument and unsupported legal conclusions without any citation to supporting legal authority. As such, summary judgment will be granted.

Also, and in the alternative, the motion will be granted because Chicago Title has shown with admissible evidence, and cites to appropriate legal authorities, that even if the exclusion did not apply, plaintiff was not covered under the terms of the policy for the circumstances under which he brought this action. The undisputed, and not reasonably disputed, facts and admissible evidence show that plaintiff has owned marketable title to the property since he purchased it. Plaintiff, in opposition, fails to present any evidence, or cite to any supporting legal authority, that tends to show that he would have been covered under the policy, even absent the exclusions that are present in the policy. Denial of plaintiff’s claim was proper under the express terms of the policy.

Because the motion for summary judgment will be granted on the grounds set forth in Chicago Title’s first two arguments, the court need not address Chicago Title’s final argument, that the action is barred by the two-year statute of limitations.