Glavinich

Defendant Commonwealth Land Title Insurance Company (Commonwealth) appeals from a summary judgment in the amount of $10,000 plus interest and costs granted in favor of plaintiffs Vide and Darlene Glavinich on their action for damages on a title insurance policy and for negligence.

Facts

Plaintiffs opened an escrow for the purpose of making a $10,000 third trust deed loan to the owner of certain residential property in Orange County. Through the escrow, plaintiffs requested from Commonwealth a standard coverage policy of title insurance.

Commonwealth issued a preliminary report dated October 21, 1981, which noted the existence of a first deed of trust to secure an indebtedness of $51,500, and a second deed of trust to secure an indebtedness of $63,500. Seven days after the preliminary report was issued, on October 28, 1981, a declaration of default and demand for sale on the second deed of trust was recorded.

On November 6, 1981, the loan escrow closed, the third deed of trust was recorded, and Commonwealth issued its standard coverage title policy insuring plaintiffs’ deed of trust as a third deed of trust, junior to both the first and second deeds of trust. The…