Mellinger

Plaintiffs David Mellinger, Uri Eliahu, Paul Guerin, Geoffrey Strong, and Shalom Eliahu sought coverage under a title insurance policy for damages allegedly caused by an encroachment. The trial court found no coverage as a matter of law. We reverse, concluding the question should have been submitted to a jury. We will remand the matter for trial in accordance with the views expressed in this opinion.

I. Background

Plaintiffs, under the partnership name The Redwood Group, entered into a contract to purchase a parcel of property in Concord, California. The parcel was approximately two acres in size and the purchase price was $470,000. Plaintiffs intended to resell the property to a builder after obtaining government approval for subdivision of the property. The purchase agreement provided for a lengthy escrow, allowing plaintiffs to seek approval of the subdivision before the close of escrow.

The City of Concord approved plaintiffs’ tentative map for a six-lot subdivision of single-family homes. Plaintiffs then completed their purchase of the property, receiving title as tenants in common, with the close of escrow taking place on March 2, 1990. At that time they also…