Daily Journal Reports on Dore Griffinger and Tanya Herrera Obtaining Judgment of over $2.5M for Stein & Lubin Client Against Title Insurance Company.
Los Angeles Daily Journal, October 10, 2008 Breach of Fiduciary Duty BENCH DECISION: $2,566,256 CASE/NUMBER: CMR Mortgage Fund II, LLC v. P. Bidda Holdings Inc., First California Title Co. / HGO5220034 COURT/DATE: Alameda Superior / Aug. 27, 2008 JUDGE: Hon. Winifred Smith ATTORNEYS: Plaintiff - Theodore A. Griffinger, Tanya Herrera (Stein & Lubin LLP, San Francisco) Defendant - Scott Sommer, Sharon L. O'Grady, John Le (Pillsbury, Winthrop, Shaw, Pittman, LLP, San Francisco). TECHNICAL EXPERTS: Plaintiff - Steven R. Walker, Esq., standard of care in representation of title companies, San Francisco; Steve Gourley, attorney, Los Angeles. Defendant - David Westcott, escrow agent, Napa; Alan D. Wallace, Esq., standard of care/damages, Sherman Oaks. FACTS: In 2003, plaintiff CMR Mortgage Fund II, LLC (CMR) entered into a loan agreement with defendant P. Bidda Holdings Inc. (PBH) to finance the purchase of a Fremont office building. CMR, an asset based lender, and PBH agreed that defendant First California Title Co. (FCT) would handle the escrow. The loan transaction closed in April 2003. CMR sued defendants for breach of fiduciary duty, breach of written escrow instructions, negligence, fraud, and conspiracy. PLAINTIFFS CONTENTIONS: CMR discovered that the purchase price of the office building was substantially lower than the price represented by PBH. This was only discovered after the loan transaction closed. CMR also found that PBH did not place any down payment on the purchase price and FCT did not comply with CMR's written escrow instructions. CMR argued that a breach of the written escrow instructions allowed the completion of a fraudulent real estate transaction; CMR would never have completed the loan transaction if the escrow instructions had been followed. DEFENDANTS CONTENTIONS: FCT countered that no term of the escrow instructions had been breached. DAMAGES: CMR claimed $2,138,546.43 in net losses after closing against the collateral of the loan. As well, CMR claimed pre judgment interest from July 7, 2006, which was the foreclosure date for the collateral for the underlying loan. SETTLEMENT DISCUSSIONS: CMR made an offer of settlement pursuant to C.C.P. section 998 for $2,000,000. FCT did not respond to the section 998 offer or make any other offer of settlement. RESULT: Prior to trial, default judgment was entered against PBH. The court ruled in favor of the plaintiff in the amount of $2,566,255.71, which included $427,709.28 in pre judgment interest accruing from July 7, 2006. |
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