Rosen

Plaintiffs, a group of real estate lender-investors, appeal from the summary judgment granted on behalf of defendant Nations Title Insurance Company. For the reasons set forth below, we affirm that judgment.

Facts and Procedural History

Barrich Company, Inc. (Barrich) was a real estate developer building two homes in the Laurel Canyon area of Los Angeles. Brentwood Bank of California (the bank) was the project’s construction lender and the bank’s loans were secured by first trust deeds on both properties. Barrich eventually defaulted on the construction loans and the bank began foreclosure proceedings. In early 1992, Barrich filed a chapter 11 bankruptcy petition in the federal bankruptcy court, which stayed the foreclosure pursuant to 11 United States Code section 362 .

In June 1992, Barrich filed a bankruptcy court motion for permission to incur more debt—a so-called “priming lien loan”—in order to finish its construction project and thus generate more revenue for itself and its creditors. Such priming loans gain court-ordered priority over any existing encumbrances and are authorized by 11 United States Code section 364 (d). The motion was granted in July 1992 over…