Escrow Agents' Fidelity Corp. v. Superior Court

Petitioners challenge an order of the respondent court sustaining, without leave to amend, the demurrer of real party Linda Abelman (Abelman) to the first cause of action of petitioners’ complaint. In that cause of action, petitioners sought relief based on the theory of quia timet, an equitable remedy which allows an aggrieved party to obtain prejudgment relief to prevent an anticipated injury. Abelman persuaded the respondent court that quia timet was a remedy which no longer exists in the State of California, having been “taken over by, consumed in and now part of a whole statutory scheme of rights.” .

Although quia timet has by and large been abandoned in favor of other legal and equitable prejudgment remedies, it is is by no means obsolete. Although rarely utilized in general practice, it is widely and effectively used in fidelity and surety bond cases. The respondent court erred, therefore, in sustaining Abelman’s demurrer to petitioners’ quia timet cause of action.

Facts and Procedural History

Petitioner Escrow Agents’ Fidelity Corporation (EAFC) is a nonprofit corporation established by the Legislature pursuant to the Escrow Law (Fin. Code, § 17000 et seq.) to…