Legal Question in Real Estate Law in California

You need to get an attorney right away.

One of the big questions that I have is whether the title and escrow were with the same company, or two different companies. I would also be curious as to whether or not the title company that is now pursuing you, prepared the deed for you to sign. If you deposited a grant deed into escrow, then they are suing you under the implied warranty of Civil Code section 1113. "From the use of the word �grant� in any conveyance by which an estate of inheritance or fee simple is to be passed, the following covenants, and none other, on the part of the grantor for himself and his heirs to the grantee, his heirs, and assigns, are implied,

unless restrained by express terms contained in such conveyance: ... 2. That such estate is at the time of the execution of such conveyance free from encumbrances done, made,

or suffered by the grantor, or any person claiming under him. Such covenants may be sued upon in the same manner as if they had been expressly inserted in the conveyance."

(Civ. Code, � 1113 subd. (1).)

Based on what you have provided, it sounds like the title company screwed up and is now covering their screw up by going after you. You need an attorney to present a strong defense.

I assume what happened was that the person who bought your house was unaware of the second deed of trust as the Title company did not include it on the final title report and the Title company then had to pay off the second so the buyer would have title equal to what the title report stated.

Find out from the lender for the second as to how much was left on the second and how much the Title company paid and if they gave a reason. Find out from the buyer of the property what occurred. Look through the final title report and see what omissions and other errors it has. the you will need to contact the Title company or the attorney representing them and point out what is wrong with their case -- they reported the lien in the preliminary report, it was their error in making the payments, you would not have made a lump sum payment, they volunteered to make the payment without first notifying you, they essentially made a gift to you and are not entitled to reimbursement. You may need to work out some type of installment payment plan for a portion of the amount they paid, as they probably are not going to back down. You need to file a general denial of their lawsuit.

You are going to need an attorney to at least initially look at all the paperwork to give you general guidance on what to do. If you wish, you can contact me at 510-41-2684 or [email protected] [I charge $100 per hour].

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I have litigated title and escrow negligence cases for over twenty years, including six as a vice president and associate general counsel for Fidelity National Financial, parent to Fidelity National Title and Chicago Title (and a number of other smaller title companies). I can assure you that the situation you describe did not occur the way you describe it. Without examining the title and escrow files of both transactions I cannot tell you exactly what DID happen, but you have some mis-understanding or misinformation. Do not rely on Mr. Shers' answer. It is incorrect in several respects, especially the part about the title company making a gift to you by paying off the debt. There is a long line of cases that says that when a title insurer pays off claim that they insured against, even in error, they are not a "mere volunteer" or "intermeddler," and therefore it is not a gift. He also does not understand the law of title reports. They are NOT representations of the state of title. They are offers of insurance contracts on certain terms. My guess is that you have some defenses to this lawsuit, and possibly some counter claims of your own. At the very least I believe you are entitled to continue making payments rather than a lump sum. I charge more than $100 an hour for a reason. I've been "inside" on these cases. If you would like a free hour of my time to discuss this in Walnut Creek or Pleasant Hill, and then you can decide if you want to hire me, please send me an email and we will scheduled an appointment.