(Developer Liable to Title Insurer Pursuant to
Enforceable Grant of Discretion to Title Insurer in Indemnity
Agreement)
In First American Title Ins. Co. v. Spanish Inn, Inc.,
239 Cal. App. 4th 598 (July 16, 2015), the California Court of
Appeal affirmed the trial court’s grant of summary
adjudication to a title insurer seeking indemnity for legal
expenses incurred in defending against mechanic’s liens from
the developers.
Defendants Spanish Inn, Inc. (“Spanish Inn”), Hormoz
Ramy, and Nejat Kohan owned (or had an interest in) the Spanish Inn
Hotel in Palm Springs, CA. Spanish Inn borrowed $6 million from
Nara Bank to renovate and rehabilitate the property. Nara Bank
secured this loan by recording a construction deed of trust, and
required Spanish Inn obtain a lender’s title insurance policy
to protect against loss from mechanic’s liens. First American
Title Insurance Company (“First American”) issued this
policy, but, in doing so, also required the defendants
