Trustor Security Service v. Title Recon Tracking Service

This is an appeal from an action for declaratory relief in which plaintiff and appellant, Trustors Security Service, sought a declaration that, as the named trustee on deeds of trust, it had statutory and contractual rights to execute a reconveyance and collect a fee when the obligation secured by the trust deed was satisfied. Respondent title companies and a loan tracking company also sought a declaration trustees no longer had the exclusive statutory right to execute and record reconveyances. They argued the 1988 amendment to Civil Code section 2941 created a co-equal alternative for title insurers to compete with trustees to clear title. The trial court agreed with the title insurers and concluded trustees had neither an enforceable statutory nor contractual right to execute and record reconveyances.

We conclude the trial court’s interpretation of Civil Code section 2941 is not supported by the statutory language nor by the legislative history of the 1988 amendment to section 2941 authorizing title insurers for the first time to clear title. Accordingly, we reverse the judgment in favor of the title insurers and loan tracking company and remand for further…