Appellant broker challenged the respective judgments on the pleadings in favor of respondents, a title company and its affiliate, in the Superior Court of Los Angeles County (California), in appellant’s cross-complaints against each respondent for damages caused by a defective title search.

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Overview

Appellant broker filed a lis pendens on certain real property in connection with a suit for specific performance of a contract for sale of the property. Later, the property was conveyed to another buyer, who hired respondents, a title company and its affiliate to prepare a title abstract and issue title insurance. Respondents, however, did not discover the lis pendens. Appellant ultimately filed cross-complaints against respondents, alleging claims in tort and contract for respondents’ negligence in preparing a title report. A judgment on the pleadings was granted in favor of each respondent and appellant sought review. The appellate court consolidated the subsequent appeals and affirmed both judgments, holding that appellant had no claims in contract because he was not an intended third party beneficiary of the buyers’ contract with respondents. Similarly, respondents were not liable in tort when they did not supply information for appellant’s guidance, but rather for the buyers, who were the only parties whose reliance on the information was intended and justified.

Outcome

The appellate court affirmed the grant of judgment on the pleadings for respondents, a title company and its affiliate. Appellant broker could not recovery on his cross-complaints against respondents for a negligent title report on either tort or contract grounds. The report was not intended to benefit appellant, rather it was intended to protect the real estate buyers’ who hired respondents.