Plaintiff, a buyer of residential property, sought review of a judgment of the Superior Court of Los Angeles County (California), which denied her request for attorney fees after a jury found that defendant escrow agent breached its fiduciary duties to the buyer.
The buyer made multiple claims but proceeded to trial only on her claim of breach of fiduciary duty. The jury did not specify which fiduciary duties were breached. The court considered each of them individually and concluded that the buyer was entitled to fees because she prevailed in her suit based on the contract under Cal. Civ. Code § 1717. The duty of an escrow holder to obtain evidence that a real estate broker was regularly licensed before delivering compensation arose from Cal. Bus. & Prof. Code § 10138. The agent assumed this duty only by entering the contract to execute the escrow for the buyer and the seller. Accordingly, the duty to arose out of and was not outside the contract. In addition, the duty to communicate any facts learned about the broker’s licenses arose only because of the duty to obtain such evidence. Because the duty to obtain such evidence was not outside the contract, the duty to communicate those findings also was not outside the contract. The obligation to exercise reasonable skill and diligence in carrying out the escrow instructions, and to comply strictly with the depositor’s written instructions, were within the duties undertaken in the contract.
The court reversed the order denying attorney fees and remanded the case to the superior court for determination of an appropriate attorney fee award.
Expert witness designation included employment lawyer for all parties during pretrial discovery. Defendant insurer challenged a judgment form the Superior Court of Los Angeles County (California), which awarded emotional distress damages to plaintiff insureds.
A fire caused substantial damage to plaintiffs’ home. At that time, defendant insured plaintiffs under a homeowner’s policy. After a dispute arose related to plaintiffs’ dwelling restoration claim, defendant offered to settle the claim. Plaintiffs rejected the offer and subsequently filed a first party bad faith case against defendant. A jury found that defendant acted in bad faith, and the trial court awarded emotional distress damages to plaintiffs. On appeal, defendant argued that reversal of the trial court’s judgment was warranted because plaintiffs failed to prove any financial loss. The court stated that in order to recover any emotional distress damages, plaintiffs were required to prove that they suffered financial loss. The court found that plaintiffs did not present proof of financial loss. The court stated that the ability to validate emotional distress damages was critical where defendant’s bad faith consisted of delay in the form of continuing negotiations. The court held that plaintiffs were not entitled to the emotional distress damages because there was no evidence of financial loss. Judgment was reversed and remanded.
The trial court’s judgment that awarded emotional distress damages to plaintiff insureds was reversed and remanded because plaintiffs failed to present evidence that they suffered financial loss due to defendant insured’s bad faith in delaying settlement negotiations.