Legal Question in Real Estate Law in California
I sold a property and terms of closing escrow required holding back $10,000 for one trustdeed and $60,000 for another. The instructions for the holdback separated the two amounts and had different requirements for satisfaction. Escrow closed and title insurance was provided to the buyer. I was able to resolve the $60,000 trust deed quickly and provided the title company with a reconveyance for this deed. In the process of obtaining a bond for the other trust deed I contacted the beneficiaries with an address provided to me by the title company and they claim more than $10,000 is owed however there is evidence that this claim is not accurate so it will probably have to resolved in court which may take time. The title company is refusing to release the $60,000 from the deed despite my having completed all my "sole" {language in the holdback agreement} responsibilities in regards to this amount of money. There is nothing in the holdback agreement that states I must satisfy both trust deeds to receive funds and I would not have agreed to this as I knew I was able to resolve the $60,000 trust deed within a couple of weeks whereas I had no idea how long it would take to resolve the other one. The holdback agreement clearly separates the two amounts of money being held with different requirements for satisfaction and each set of requirements uses the word "sole" in regards to my responsibilities and with no language whatsoever requiring satisfaction of both before funds can be released. Is this a breach of contract?
2 Answers from Attorneys
Title Insurance Company employees have never struck me as innovative nor acutely smart. Since they do not want to get sued, they will take the most conservative approach, even if not justifed, to avoid their being sued. Based upon the facts you relate, they have definitely breached their contract with you and have converted your funds.
Demand to see personally their attorney; they will not want to do so but you need to see his/her reactions and attitudes when they make their arguments and listen to yours. Insist that they provide legal authority for their position. Ask what conditions have not been fulfilled and woul dthey take the same poistion if two separate escrows had issued. Ask what their are really insuring the title against [they might just say only matters listed in the County records but for the lenders they do a more through job, which means they do not inform the owner/buyer of title problems they are aware of? You may need a lawyer letter threatening suit to get them to act. Try to show what economic lost you are suffering because of their behavior. Good luck.
I'm sorry to hear you are continuing to have problems closing this deal, and I agree with Mr. Shers proposal to involve the attorneys for the escrow holder in the process, not only ftom the standpoint of explaining why they cannot release your funds, but in pro-actively suggesting steps you might take to accelerate resolution of the smaller trust deed and its issues. However, I'd be hesitant to go on the attack against your escrow holder. They may not be quite ready for appointment to the Supreme Court, by generally I've found that they know their business.
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