Opinion
A150244
06-27-2018
FLETCHER RANCH ROAD PROPERTIES, LLC, Plaintiff and Appellant, v. CHICAGO TITLE INSURANCE COMPANY, Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Alameda County Super. Ct. No. RG12647078)
The owner of rural land located in Alameda County became embroiled in litigation with neighboring property owners over access to the parcel, which abuts no public road, and then initiated this separate lawsuit against its title insurer when the title insurer denied its claim for coverage. The title insurer prevailed at trial when the jury found the property owner's claims were barred by the applicable two-year statute of limitations. The property owner now appeals, contending the jury's verdict is not supported by substantial evidence and is against the law. We reject both contentions and affirm the judgment.
BACKGROUND
On September 7, 2012, Fletcher Ranch Road Properties, LLC (Fletcher, or plaintiff) commenced this action against its title insurer, respondent Chicago Title Insurance Company (Chicago Title).
The operative complaint at trial, a second amended complaint, was based on policy language requiring Chicago Title to insure against "loss or damage . . . sustained or incurred by the insured by reason of: [¶] 2. Any defect in . . . the title; [¶] 3. Unmarketability of the title; [¶] [or] [4] Lack of a right of access to and from the land."
In background allegations, plaintiff alleged that the property, located in Alameda County, does not abut any public roads and has no recorded easement granting access over any adjacent land. For many years, plaintiff alleged, it and its predecessors had been accessing the property by using roads running through neighboring land owned by the City and County of San Francisco (San Francisco) and also a road running through neighboring land owned by one "Grimes."
Plaintiff alleged that in 2005, the State of California granted it a conservation easement as part of the state's wildlife conservation program, and that "[a] condition to receiving such an easement is the existence of a right of access to the conservation land by way of a public road or recorded easement." (Italics added.) It alleged that the state "apparently overlooked this requirement" when it granted the initial conservation easement but that no further conservation easements would be granted "unless a deed for a right of access is recorded." It alleged that "[a]s a direct and proximate result of not having a recorded right of access to their property," it was "precluded from making full use and enjoyment of [the] Property, including without limitation, acquiring additional conservation easements from the State of California, resulting in lost profits from their sale as well as a reduction in the over-all value" of the property. (Italics added.) It alleged the lack of a right of access to the property constituted a defect in title and rendered the property unmarketable.
Plaintiff also alleged that subsequently, in April 2010, Grimes challenged its right to continue crossing the Grimes parcel to access the property and so the property owner brought suit against Grimes at that time (the "Easement Case"). San Francisco, it was alleged, later acquired Grimes' land and was substituted into the case as the defendant. Plaintiff also alleged that during the course of that litigation, San Francisco informed it that its use of roads crossing San Francisco's property was by permission only, and that San Francisco did not recognize its legal right of access to the property, "a position that Plaintiff[] vigorously disputed."
It further alleged that "[a]ccordingly, in order to rescue their property and mitigate . . . damages," it expended substantial legal fees to prosecute the Easement Case and to negotiate with San Francisco for a deed of easement.
Plaintiff alleged it made a claim under its title insurance policy on April 26, 2012, which its title insurer denied in July 2012. It then brought this suit.
The property owner's principals, Richard Fletcher and Robert Fletcher, were initially joined as plaintiffs too but later dismissed from the action, and the case proceeded to trial solely on claims pressed by the company.
The complaint alleged four causes of action. The first was for breach of contract, alleging that Chicago Title's "refusal to reimburse Plaintiffs for their legal expenses incurred in connection with the Easement Case and/or pay Plaintiffs the reduced value of their property" breached the policy. The second, styled as "negligent failure to issue insurance policy," alleged Chicago Title had negligently failed, at plaintiff's request, to issue a title insurance policy under a temporary policy of insurance purchased in 2007 (referred to in the complaint as the "Binder") before the time for doing so expired. The third cause of action was for "breach of the implied obligation of good faith in denying claim." It alleged that Chicago Title had unreasonably denied plaintiff's claim, without a proper basis and in bad faith. The final cause of action was for "misrepresentation-deceit," alleging plaintiff did not submit a claim to Chicago Title when its access rights were first challenged by Grimes in 2010, because it did not believe it had a claim under the policies at that time, and that had Chicago Title disclosed Chicago Title's contrary interpretation of the policy it would have submitted its claim much sooner.
The parties' briefs do not address this liability theory, which presumably was not a central focus at trial. Because neither party ascribes it any significance, we will do likewise and ignore it for purposes of our analysis.
Chicago Title asserted the entire action was barred by the two-year limitations period governing title insurance policies set forth in Code of Civil Procedure section 339(1), and moved for summary judgment on that basis. That statute applies in pertinent part to "an action founded upon a contract, obligation or liability, evidenced by a certificate, or abstract or guaranty of title of real property, or by a policy of title insurance" and it incorporates a discovery rule, stating that "the cause of action . . . shall not be deemed to have accrued until the discovery of the loss or damage suffered by the aggrieved party thereunder." (Code Civ. Proc., § 339.) The trial court denied Chicago Title's summary judgment motion, ruling there were triable issues of material fact as to the meaning of the relevant policy language and plaintiff's alleged lack of right of access to the property.
The case proceeded to a jury trial, and the case was bifurcated with Chicago Title's statute of limitations defense tried first. At the close of the first phase of the case, the jury was instructed as follows: "Defendant Chicago Title Insurance Company contends that plaintiff Fletcher Ranch Road Properties, LLC's lawsuit was not filed within the time set by law. [¶] To succeed on this defense, Defendant Chicago Title Insurance Company must prove that Plaintiff Fletcher Ranch Road Properties, LLC, discovered its claimed harm before April 26, 2010." (Italics added.) This was the only instruction the jury received on the statute of limitations, and although the parties' proposed jury instructions are not in the record, the reporter's transcript reflects that the parties stipulated to it. The special verdict form tracked the language of this jury instruction, asking the jury to decide the following question: "Did Plaintiff Fletcher Ranch Road Properties, LLC discover its claimed harm before April 26, 2010?" The jury answered the statute of limitations question in the affirmative, the court entered judgment in Chicago Title's favor, and this timely appeal followed.
The date specified in the instruction is two years before Fletcher submitted its claim to Chicago Title rather than (for reasons not explained by the parties) the date Fletcher actually commenced suit.
DISCUSSION
Plaintiff argues, first, that the jury's finding that it discovered its claimed harm before April 26, 2010, is not supported by substantial evidence. To be clear, the jury was told it had to decide only one question concerning the statute of limitations, with no clarification in the instructions as to what that question meant: namely, "Did Plaintiff Fletcher Ranch Road Properties, LLC discover its claimed harm before April 26, 2010?" Thus, on appeal the question is whether there was substantial evidence under the relevant jury instruction to support the jury's finding.
Fletcher's contention that there was not, rests entirely upon testimony of Robert Fletcher and Richard Fletcher that the plaintiff's "claimed harm" was the cost of litigating against San Francisco from June 2012 onward, which is when San Francisco took the position that plaintiff's prior access over San Francisco's property had been by permission only. The rest of the evidence, plaintiff says, was irrelevant (apart from Chicago Title's letter disputing coverage). Fletcher does not summarize any of that evidence; it merely alludes to isolated bits and pieces of some other evidence in its statement of facts, in a highly argumentative fashion and without explaining the evidence's actual substance. All of this makes for difficult reading, much less a sensible grasp of what actually went on at trial. And none of it for a proper argument on appeal.
An appellant who challenges the sufficiency of the evidence must set forth " 'all material evidence on the point . . . and not merely their own evidence. [Citation.] Failure to do so amounts to waiver of the alleged error and we may presume that the record contains evidence to sustain every finding of fact.' " (Toigo v. Town of Ross (1998) 70 Cal.App.4th 309, 317; see also, e.g., North Coast Rivers Alliance v. Kawamura (2015) 243 Cal.App.4th 647, 677.) Respondent's brief reveals that there was much more evidence introduced at trial about Fletcher's claimed harms, none of it mentioned by Fletcher. For example (and without purporting to be exhaustive), Fletcher admitted in verified interrogatory responses read into the record at trial that it had discovered in 2005 that there was no deeded easement for access to the property and no " ' "recorded permanent right-of-way." ' " Thus, its alleged inability to acquire any more conservation easements that it could then profit from, as alleged, at that point was known. Richard Fletcher also conceded that the complaint sought reimbursement for attorney fees that the company had started incurring in 2007. He also conceded the complaint sought reimbursement for attorney fees incurred in connection with the Easement Case against Grimes, which was filed before April 26, 2010. And, contrary to Fletcher's insistence that the complaint was "not evidence," even it concedes that its two principals were cross-examined at trial about the complaint's allegations too. But rather than set forth in its opening brief the actual substance of their testimony concerning the complaint, Fletcher instead simply asserts that testimony didn't contradict other testimony that Fletcher relies on in urging us to reverse the judgment. Alternatively, Fletcher asks us just to disregard their other testimony under a provision of the Code of Civil Procedure governing amendments to conform to proof (see Code Civ. Proc. § 469). (In its reply brief, Fletcher then contends much of this other evidence is irrelevant, because the jury instruction referred to its "claimed" harm and not just to any harm that it suffered; but the jury was given no limiting or clarifying instruction as to what was meant by the phrase "claimed harm" and was certainly free to decide that it encompassed what was pled in the actual complaint.) By presenting a one-sided and incomplete recitation of the evidence, Fletcher has waived its sufficiency of the evidence challenge. Furthermore, the evidence we have just discussed (which Fletcher did not) is substantial evidence that Fletcher discovered at least some of its claimed harms before April 26, 2010. That is sufficient to uphold the jury's verdict, despite any contrary testimony by Fletcher's principals attempting to change plaintiff's theories at the eleventh hour at trial by describing them more narrowly than what Fletcher actually pled.
At trial, Robert Fletcher explained that the acquisition of conservation easements was very lucrative, as part of a concept known as conservation banking. In essence, it entails a transaction whereby a landowner sets aside a portion of undeveloped property in perpetuity for the benefit of an endangered species, funded by an endowment that is typically administered by a governmental entity or a qualified non-profit organization. The landowner receives mitigation credits from the state and federal government for the sites it preserves, which it can then turn around and sell to other landowners whose projects are impacting the threatened species. Fletcher has sold the majority of its credits to utilities and public works projects undertaken by Caltrans.
It is unnecessary to address Chicago Title's various arguments about the binding effect of the complaint's allegations and/or judicial estoppel.
As far as we can tell, no motion was made to amend the complaint to narrow its allegations to matters that took place solely within the two-year limitations period (and even had such a motion been made, plaintiff makes no cognizable argument on appeal about it). Nor was the jury instructed that it could find some claims time-barred and others not. Rather, the statute of limitations question was presented to the jury as an all-or-nothing proposition.
Fletcher's second (and final) argument is that the jury's verdict is contrary to the governing law as to when a claim accrues for lack of a right of access or an insurer's failure to defend. As we understand it, this argument consists of two distinct legal points. One is that, "[a] cause of action for wrongful failure to defend accrues at the time of refusal, but is tolled until the underlying action is resolved." The second is that, where damages are progressive and divisible, the limitations period commences " 'when appreciable damage occurs and is or should be known to the insured, such that a reasonable insured would be aware that his notification duty under the policy has been triggered.' " These contentions are unavailing, however, because the jury instructions do not encompass either theory (and plaintiff has made no claim of instructional error). "We review the sufficiency of the evidence to support the verdict under the law stated in the instructions given, rather than under some other law on which the jury was not instructed." (Faigin v. Signature Group Holdings, Inc. (2012) 211 Cal.App.4th 726, 737; accord, Bullock v. Philip Morris USA, Inc. (2008) 159 Cal.App.4th 655, 674-675; Null v. City of Los Angeles (1988) 206 Cal.App.3d 1528, 1535.) Therefore, Fletcher has shown no error in the jury's verdict based upon these alternate accrual theories.
Finally, Chicago Title has moved to dismiss this appeal and for an award of appellate sanctions on the ground it is frivolous, a motion that we previously took under submission. We deny the motion in full, declining to dismiss the appeal and declining to impose appellate sanctions. We are not persuaded based on the present briefing that this appeal was objectively frivolous.
DISPOSITION
The judgment is affirmed. Respondent shall recover its costs of appeal.
/s/_________
STEWART, J. We concur. /s/_________
RICHMAN, Acting P.J. /s/_________
MILLER, J.