Centurion Properties III, LLC v. Chicago Title Insurance Co.

MEMORANDUM

Centurion Properties III, LLC and SMI Group XIV, LLC (together, “Plaintiffs”) allege that Chicago Title Insurance Company (“Chicago Title”) breached a duty of care to Plaintiffs by negligently recording certain liens against their property, in violation of Plaintiffs’ loan agreement. See Centurion Props. III, LLC v. Chi. Title Ins. Co., 793 F.3d 1087, 1088 (9th Cir. 2015). “Chicago Title served as the escrow, closing agent, and title insurer for the original purchase [of the property]” and thus admitted that it could be charged with actual knowledge of the loan agreement. Id. at 1088-89 . Nevertheless, Chicago Title argued that because Plaintiffs were third parties to its agreement with the insured, it owed them no duty of care. Id. at 1091 . The district court agreed, granting summary judgment to Chicago Title. Id. at 1089 . Plaintiffs timely appealed.

We concluded that “whether a title company owes a duty of care to third parties to refrain from negligently recording legal instruments” was a matter of Washington common law. Id. at 1090 . Yet, upon review, we were unable to find any Washington case expressly delineating the duty of care. Id. Moreover, the answer was…