Kasdan, Simonds, McIntyre, Epstein & Martin v. World Savings & Loan Ass'n

The parties, the firm of Kasdan, Si-monds, McIntyre, Epstein and Martin (“Kasdan”) and World Savings & Loan Association (“World Savings”) appeal from cross-summary judgment motions. The district court held that Kasdan converted World Savings’ property interest in settlement funds obtained by Kasdan on behalf of its clients, James and Cheryl Emery (“the Emerys”), and was therefore liable for damages. We reverse.

BACKGROUND

This action arose from a bankruptcy proceeding. The current dispute began as (and, in our view, remains) a dispute between World Savings and the Emerys.

In 1993 James and Cheryl Emery refinanced their home through World Savings. As security for the loan, the Emerys executed a deed of trust in favor of World Savings, which was subsequently recorded. Paragraph Eighteen of the deed of trust (“Paragraph Eighteen”) provides for the assignment to World Savings of the Emer-ys’ rights in any legal cause of action relating to injury or damage to their home. Paragraph Eighteen states:

(emphasis added).

After refinancing their home, the Emer-ys discovered construction defects. At this juncture, the Kasdan law firm entered the scene. On behalf of the Emerys and their…