Smeaton

Tony Smeaton appeals from a judgment following a bench trial in favor of defendant Fidelity National Title in this lawsuit founded upon a title insurance policy. The court found the statute of limitations barred any recovery. On appeal, Smeaton contends the limitations period for claims founded upon a title insurance policy cannot begin to run until the policy is issued. We agree and reverse the judgment.

Factual and Procedural Background

Smeaton retained Fidelity to handle the escrow and title insurance in connection with his purchase of approximately 693 acres of real property in El Dorado County. Smeaton claims Fidelity “orally represented to Smeaton that it had confirmed the requisite access easements for the property, and that Fidelity would issue a title insurance policy to Smeaton that included reference to these access easements.” Escrow closed on May 5, 1993, but Fidelity did not issue the title insurance policy until August 1993.

Smeaton acknowledges, and the trial court found, that as of July 17, 1993, he knew the necessary access easements did not exist. On August 6, 1993, Fidelity issued the title insurance policy, and on August 12, 1993, Smeaton’s…