Dollinger Deanza Associates v. Chicago Title Insurance

I. INTRODUCTION

This appeal arises from a dispute concerning title insurance coverage. In 2004, appellant Dollinger DeAnza Associates (Dollinger) purchased real property in Cupertino that it believed was divided into seven parcels, with the intention of selling parcel 7. In conjunction with the purchase, Dollinger obtained a title insurance policy from respondent Chicago Title Insurance Company (Chicago Title). Dollinger later entered into an agreement to sell parcel 7, but the sale was not completed because the purchaser, Pacific Peninsula Group, withdrew after learning that the City of Cupertino had recorded a notice of merger in 1984 that stated all seven parcels were merged into a single parcel. The notice of merger was not included in Chicago Title’s title report.

Dollinger tendered a claim under the Chicago Title policy due to the failed sales transaction for parcel 7. Chicago Title initially denied Dollinger’s claim under the wrong policy, then accepted the claim under the policy that Dollinger had actually purchased. Chicago Title subsequently determined that Dollinger’s claim was not covered. Dollinger then filed a complaint against Chicago Title that included…