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Jay Shah appealed a judgment entered in favor of Fidelity National Title Insurance Company after the trial court granted summary judgment. After two trials and a second appeal, the Court of Appeal dealt with improper and glorifying behavior by plaintiff’s counsel. IN Jay C. Shah v. Fidelity National Title Insurance Company, A165816, California Court of Appeals, First District, First Division (Nov. 30, 2022) resolved the title insurance issue based on the evidence and California codes and precedent.
In 1959, Mary Silva, who was not a party, acquired an estate in the property subject to this action near Quimby Road in San Jose, California (the property). In December 1995, Shah entered into a contract to purchase the property from Silva for $350,000. Silva transferred his interest in the property by grant deed to “Jay C. Shah, Living Trust Dated June 8, 1993,” (the Trust) as grantor. When he bought the property, Shah did not know that Silva only held one life.
Fidelity issued the title insurance in connection with Shah’s purchase in 1995. The title insurance became effective on December 29, 1995. Schedule A of the title policy listed the named insureds as the Trust. The title policy stated that “the estate or interest in the land described herein and covered by this policy is: A charge.”
Suit Against Fidelity
The district court granted Fidelity’s motion for summary judgment and determined Shah’s motion for summary judgment was moot. The court concluded that Fidelity met its burden of showing that coverage was terminated under Section 2(b) of the title policy prior to Shah’s 2009 tender because Shah had voluntarily transferred the property to his parents in 2002, and the transfer became effective as a matter of law in May 2007 when Shah obtained fee title by adverse possession, according to the doctrine of acquired title (Civ. Code, § 1106).
Court of Appeals, concluding that it was not free to rewrite the policy to achieve the result Shah sought & Fidelity met its initial burden of showing coverage under the title insurance terminated under section 2(b) when Shah voluntarily transferred the property to his parents in 2002 grant deed and subsequently acquired fees by adverse possession in May 2007. Because Shah failed to present evidence raising a triable issue of material fact, Fidelity was entitled to judgment as a matter of law on Shah’s causes of action for breach of contract and tort against the implied covenant of good faith and fair dealing.
In addition to deciding the insurance issue, the California Court of Appeal, in an unusual addendum to the opinion, held that they were required to admonish Shah’s counsel, Craig JB, for making repeated, unsubstantiated personal attacks on the trial court and opposing counsel in his appellate briefs, apparently because he did not agree with the district court’s decision. To illustrate, the Court of Appeal quoted some excerpts from opening and answering documents that were damning.
About the court:
“So far, the court has favored Fidelity because that court does not understand, and refuses to learn, the principles of the law applicable to the facts of this case. The lower court illegally sides with the perpetrator and throws Shah out the courtroom door, twice now! ”
“Lower court turns [the] holding [of Marriage v. Keener, supra, 26 Cal.App.4th 186], distorts it and abuses it to deliberately err in order to achieve a preconceived result detrimental to the Shah. It sought to vindicate the judge in the same court who mistakenly prejudiced Fidelity against Shah’s FAC on the same erroneous basis, despite the successful appeal and reversal of that decision.”
“When making their decision about MSJ [(motion for summary judgment)]the lower court acted as if a magical mystery trial had been held without a jury in Shah’s absence and was decided on the basis of a single document alone….”
“However, the lower court’s duplicity reveals its pervasive error.”
“The lower court’s short-sighted departure from the policy of the law explained above and its total disregard of the relevant statutes to achieve a wrongful result to benefit the title insurance industry and knowingly injure the innocent insured, twice now, means that something is terribly wrong and that the courts has gone astray.”
“The lower court deliberately erred here to protect itself rather than to apply the law, which was its sworn duty.” The district court “refuses to get the facts straight, refuses to interpret the clause correctly, and refuses to follow the law.”
If the defendant, and by implication, opposing counsel:
“Because it knows that it can successfully, as this case demonstrates, engage in bad faith insurance tactics to mislead gullible courts that have little experience and no training in such matters. . . .”
“Isn’t the goal here to consider and discover the truth, the whole truth, and nothing but the truth inferring from and accepting evidence in the light most favorable to the Shah? Why would Fidelity think it is above this law? Because it believes that it is a law unto itself not subject to the law, so that it may in bad faith seek relief on false grounds when its liability is clear. The sophistry of fidelity cannot appear as truth in this proceeding.”
“This court should respect and adopt [Shah’s] absolutely correct analysis, no matter what bag of tricks, lies and misrepresentations Fidelity is throwing at the court at this point, which is all Fidelity has done, judging by the contents of the defendant’s letter.”
These quotes were a selection of the many inappropriate arguments scattered throughout the attorney’s briefs. Perhaps not surprisingly, these unhelpful comments are not supported by any evidence in the record. So bombasticad hominem attacks have no place in an appeal and are potentially contemptible and punishable conduct.
The Court of Appeal further noted that:
“[d]insulting the trial judge is a tactic not taken lightly by a reviewing court. The lawyer should make sure he or she has the facts right before venturing into such dangerous territory because it is contemptible for a lawyer to make the baseless claim that the judge was “acting out”[ing] of partiality against a party.”In re SC (2006) 138 Cal.App.4th 396, 422.)
The Court of Appeals noted that “ironically, the extremely argumentative nature of his two appeals makes it more time-consuming for this court to sift through the gratuitous personal attacks and hyperbolic rhetoric to get to the legal issues that must be resolved.”
In favor of the representative, the Court of Appeal repeated the call from the Board of the Attorney General to:
lawyers have a duty to be professional with . . . other parties and agents, [and] the courts …. This obligation includes courtesy, professional integrity, personal dignity, sincerity, diligence, respect, politeness and cooperationall of which are essential to the fair administration of justice and conflict resolution.” (Cal. Atty. Guidelines of Civility & Professionalism (July 20, 2007) Introd., p. 3; id., § 4, p. 5 [“An attorney should not disparage the intelligence, integrity, ethics, morals or behavior of the court or other counsel, parties or participants when those characteristics are not at issue. [¶] . . . [¶] . . . A lawyer should avoid hostile, degrading, or humiliating words.”].) The kind of behavior displayed in the lawyer’s appeal debriefing “not only discredits the individual involved, it discredits the profession as a whole and our legal system”. Rather, counsel must “strive to the highest standards of lawyerly conduct to elevate and enhance our service to justice.” (Ibid.) [emphasis added]
The Court of Appeal strongly urged the plaintiff’s counsel to conduct himself in a more professional manner when he appeared in the Court of Appeal or any other court, stating that such behavior in a future case may subject him to much harsher sanctions than the warning.
The insurance issue was resolved with a detailed analysis that clearly established that Fidelity owed Shah nothing. The reason for this article is to point out that the Court of Appeal was kind to the plaintiff’s counsel by merely admonishing his conduct. Lawyers should never get emotionally involved in their cases and, when losing at trial, should never question the integrity of the court or opposing counsel, only the law and the facts. A dispute over a title insurance contract is a legal question that was resolved by the Court of Appeals through review of the facts and applicable law and precedent. For an appellate court to add the caveats it did is quite unusual. The court, in my view, should have done more than admonish counsel and issued more than a warning.
(c) 2022 Barry Zalma & ClaimSchool, Inc.
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Barry Zalma, Esq., CFE, now limits his practice to serving as an insurance consultant specializing in insurance coverage, insurance claims management, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims attorney and more than 54 years in the insurance industry. He can be reached at http://www.zalma.com and firstname.lastname@example.org
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