Kirk Corp. v. First American Title Co.

Introduction

This appeal involves a commercial lease to operate a bar and restaurant in one unit of plaintiffs’ Kirkwood Tower “Whiskey Run” condominium project located in Alpine County. In January 1983, plaintiffs obtained a $1.8 million construction loan from Canadian Commercial Bank. During this transaction, a document entitled “Cancellation of Lease” was executed. Neither the lender’s nor the borrowers’ instructions explicitly ordered a cancellation of the lease. The cancellation was acknowledged on January 28, 1983, but not recorded until March 30, 1983. Escrow closed January 31, 1983. At trial, plaintiffs alleged that defendants fraudulently created the Cancellation of Lease in mid-March; that it was falsely notarized; that there were no escrow instructions to cancel the lease and that, as a result of the recording of the cancellation document, they were unable to use the lease to obtain additional project financing. After plaintiffs rested their case, the trial court granted defendants’ motion for judgment. (Code Civ. Proc. § 631.8.)

Plaintiffs now contend that defendant, First American Title Company (First American) breached its fiduciary duty by failing to…