Opinion ID: 2600454
Heading Depth: 2
Heading Rank: 2

Heading: f.a. form 31 and clta form 104

Text: ¶ 15 We also look to the other two insuring clauses for any obligation to provide notice of the creation of an SID and possible assessment. The first, F.A. Form 31, provides in part that First American will insure against loss which the Insured shall sustain by reason of any of the following matters: (1) Any incorrectness in the assurance which the Company hereby gives: (a) That there are no covenants, conditions, or restrictions under which the lien of the mortgage referred to in Schedule A can be cut off, subordinated, or otherwise impaired[.] ¶ 16 In addition, the CLTA Form 104, as it appears in the policy at issue, states that First American will insure against loss or damage which such insured shall sustain by reason of any of the following... 5. The existence of any subsisting tax or assessment lien which is prior to the insured mortgage except: NONE 6. The existence of other matters affecting the validity or priority of the lien of the insured mortgage, other than those shown in the policy except: NONE ¶ 17 Neither of these forms obligated First American to disclose information regarding the SID or the possibility of a future assessment. We find no ambiguity in this regard in either of these two forms. The forms, at their core, insure the mortgage liens that Vestin held in the property. Specifically, the forms insure against loss or damage that Vestin would sustain due to the mortgage being cut off, subordinated, or otherwise impaired, the loss of priority, and other matters affecting the validity of the mortgage lien. ¶ 18 Neither the creation of the SID nor the Notice of Intention affected the priority or validity of the mortgage lien, nor was the mortgage lien cut off, subordinated, or otherwise impaired. Once The Ranches defaulted on the loans, Vestin was able to exercise its rights under the trust deeds without any consequence arising from the SID and to take ownership through a nonjudicial foreclosure. Nothing in the Notice of Intention or in the SID affected the mortgage lien or affected the title Vestin acquired. Only the actual assessment ordinance has affected Vestin in any way, and only as to the ability to sell the property, not as to the validity of title. Vestin still holds a valid title to the property. ¶ 19 F.A. Form 31 and CLTA Form 104 both unambiguously applied only to actual assessments, and neither of the forms imposed an obligation on First American to disclose the SID or possible future assessment.