Appellant title insurer challenged the judgment

Appellant title insurer challenged the judgment of the Superior Court of Placer County (California), which ordered it to indemnify respondent homeowner’s association for damages assessed against it in a slander of title action.

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Overview

Respondent homeowner’s association sought indemnification from appellant title insurer for damages it sustained in a slander of title suit due to appellant’s failure to file convenants. The court affirmed the finding that appellant was obligated to indemnify respondent based on an implied contract to discharge damages foreseeably sustained by respondent as a result of appellant’s failure to timely record the covenants, and held that comparative indemnity principles did not apply because the implied indemnity rested upon a contractual relationship. It held appellant liable for respondent’s attorney fees incurred in the slander action; however, respondent was not entitled to attorney fees in the indemnity action because there was no contractual obligation or applicable statutory exception requiring attorney fees. It held that prejudgment interest on the damage award and attorney fees in the underlying action ran from the date judgment was entered in the slander suit because that was the date the amounts became certain. The court determined intervenors were not entitled to attorney fees because they had no claim to indemnity.

Outcome

The court affirmed the judgment for damages because appellant title insurer was obligated to indemnify respondent homeowner’s association based on an implied contract to discharge damages foreseeably sustained by respondent. It reversed the judgment with respect to prejudgment interest because such interest must run from the date judgment for damages and fees was entered. It reversed the judgments allowing attorney fees in the indemnity action.