Karl

Introduction

Plaintiffs C. Robert Karl (Mr. Karl) and Joan Karl (Mrs. Karl) (collectively, the Karls) sued defendant Commonwealth Land Title Insurance Company (Commonwealth) for tortious breach of insurance contract, alleging Commonwealth wrongfully failed to pay an insurance claim they made under their standard secured lender’s title policy. The Karls asserted they had paid an undisclosed senior tax lien in the amount of $26,241.69 in order to protect their junior security interest in the subject real property, and were thus entitled to indemnification in this amount under their policy.

Commonwealth denied the Karls’ insurance claim, asserting they would suffer no compensable loss under the policy if the proceeds from the resale of the property were sufficient to pay the outstanding balance owed on the secured note and reimburse them for the tax lien payment. This insurance bad faith action followed.

The trial court entered summary judgment in favor of Commonwealth on the ground there was no triable issue of material fact as to the existence of any “loss” under the policy because the undisputed facts showed the value the Karls received when they resold the real…