Forman

In this case we hold the statute of limitations period on a title insurance policy is equitably tolled while the insurer determines *1000 whether to honor or reject a timely filed insurance claim under that policy. Accordingly, we reverse a judgment based on a finding the statute of limitations had expired.

Facts and Proceedings Below

In 1987, appellant, John Forman, obtained a title insurance policy from respondent, Chicago Title Insurance Company (Chicago Title), in connection with his purchase of vacant land in the City of Bellflower. The face amount of the policy was $590,000. The parties stipulate Chicago Title was guilty of a notable omission in schedule B which purported to list all recorded interests affecting the property. It failed to list a blanket easement recorded on July 21, 1930, in favor of the Los Angeles County Flood Control District which effectively prevents ingress to and egress from the property.

Evidently this omission was first detected in 1989. Chicago Title was asked to prepare a preliminary title report for a prospective purchaser willing to pay $1,150,000 for the vacant land. After discovering its mistake, Chicago Title issued an amendment…

I respectfully dissent. The majority, among other errors, omit some critical operative facts contained in the record which, in my opinion, militate affirming the judgment. For that reason, I deem it necessary to set forth a statement of facts and proceedings below incorporating the operative facts.

Facts and Proceedings in the Trial Court

In September 1987, Forman purchased a vacant 3.89-acre parcel of real property located in the City of Bellflower. In connection with that purchase, Chicago Title issued a title insurance policy to Forman.

At the time Chicago Title issued the title insurance policy, the property was burdened with a blanket easement in favor of the Los Angeles County Flood Control District (the Flood Control Easement). However, that Flood Control Easement was not expressly excepted from coverage in the title policy.

Forman filed his complaint in this action on October 15, 1991. His complaint states a single cause of action for “Breach of Title Insurance Contract,” claiming that “[a]s a proximate result of the existence of the [Flood Control Easement], the value of plaintiff’s interest in the property has been greatly reduced, all to plaintiff’s damage . . . .”…

In this case we hold the statute of limitations period on a title insurance policy is equitably tolled while the insurer determines whether to honor or reject a timely filed insurance claim under that policy. Accordingly, we reverse a judgment based on a finding the statute of limitations had expired.

In 1987, appellant, John Forman, obtained a title insurance policy from respondent, Chicago Title Insurance Company (Chicago Title), in connection with his purchase of vacant land in the City of Bellflower. The face amount of the policy was $590,000. The parties stipulate Chicago Title was guilty of a notable omission in schedule B which purported to list all recorded interests affecting the property. It failed to list a blanket easement recorded on July 21, 1930, in favor of the Los Angeles County Flood Control District which effectively prevents ingress to and egress from the property.

Evidently this omission was first detected in 1989. Chicago Title was asked to prepare a preliminary title report for a prospective purchaser willing to pay $1,150,000 for the vacant land. After discovering its mistake, Chicago Title issued an amendment to the preliminary…