Kwok

Appellants Patrick Man Kee Kwok and his wife Maria Oi Yee Kwok appeal a grant of summary judgment in favor of respondent Transnation Title Insurance Company on appellants’ complaint for breach of contract and bad faith denial of coverage on a title insurance policy. The trial court found that appellants did not succeed as insureds “by operation of law” under the terms of the policy after transfer of the property from a wholly owned limited liability company, of which appellants were the only members, to appellants as trustees of a revocable family trust. We agree and affirm.

FACTUAL AND PROCEDURAL BACKGROUND

In April 2004, appellants formed Mary Bell, LLC (the LLC), and the LLC purchased real property located on Mary Bell Avenue in Los Angeles (the property). At all times, appellants were the only members of the LLC. At the time of the purchase, respondent issued a “CLTA Standard Coverage Policy of Title Insurance” (the policy), insuring title to the property and to an easement over a neighboring parcel. The LLC is the only named insured on schedule A of the policy. The policy defines “insured” as “the insured named in Schedule A, and, subject to any rights or defenses…