Court Opinion

ID: 4030784
Source: CourtListenerOpinion
Date Created: 2016-09-01 20:01:04.092935+00
Date Added: 2024-06-11T14:35:25.632683
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                            SEP 01 2016
                    UNITED STATES COURT OF APPEALS                      MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

CENTURION PROPERTIES III, LLC;                   No.   13-35692
SMI GROUP XIV, LLC,
                                                 D.C. No. 2:12-cv-05130-RMP
              Plaintiffs-Appellants,

 v.                                              MEMORANDUM*

CHICAGO TITLE INSURANCE
COMPANY, a Nebraska company,

              Defendant-Appellee.

CENTURION PROPERTIES III, LLC;                   No.   13-35725
SMI GROUP XIV, LLC,
                                                 D.C. No. 2:12-cv-05130-RMP
              Plaintiffs-Appellees,

 v.

CHICAGO TITLE INSURANCE
COMPANY, a Nebraska company,

              Defendant-Appellant.

                   Appeals from the United States District Court
                      for the Eastern District of Washington

         *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
                Rosanna Malouf Peterson, District Judge, Presiding

                         Argued and Submitted June 2, 2015
                                Seattle, Washington
                         Submission Vacated July 16, 2015
                           Resubmitted August 26, 2016

Before:      O’SCANNLAIN, TASHIMA, and McKEOWN, Circuit Judges.

      Centurion Properties III, LLC and SMI Group XIV, LLC (together,

“Plaintiffs”) allege that Chicago Title Insurance Company (“Chicago Title”)

breached a duty of care to Plaintiffs by negligently recording certain liens against

their property, in violation of Plaintiffs’ loan agreement. See Centurion Props. III,

LLC v. Chi. Title Ins. Co., 793 F.3d 1087, 1088 (9th Cir. 2015). “Chicago Title

served as the escrow, closing agent, and title insurer for the original purchase [of

the property]” and thus admitted that it could be charged with actual knowledge of

the loan agreement. Id. at 1088-89. Nevertheless, Chicago Title argued that

because Plaintiffs were third parties to its agreement with the insured, it owed them

no duty of care. Id. at 1091. The district court agreed, granting summary

judgment to Chicago Title. Id. at 1089. Plaintiffs timely appealed.

      We concluded that “whether a title company owes a duty of care to third

parties to refrain from negligently recording legal instruments” was a matter of

Washington common law. Id. at 1090. Yet, upon review, we were unable to find

                                           2
any Washington case expressly delineating the duty of care. Id. Moreover, the

answer was not clear from Washington’s precedents. Concluding that there was no

way accurately to predict how Washington courts would rule, id., we certified the

following question to the Washington Supreme Court: “Does a title company owe

a duty of care to third parties in the recording of legal instruments?” Id. at 1088,

1092; see also Wash. Rev. Code § 2.60.020.

      On July 14, 2016, the Washington Supreme Court answered our question

with an unequivocal and unanimous “No.” Certification from the U.S. Court of

Appeals for the Ninth Circuit in Centurion Props. III, LLC v. Chi. Title Ins. Co.,

375 P.3d 651, 653 (Wash. 2016). Taking into account “logic, common sense,

justice, policy, and precedent, as applied to the facts of the case,” the court

concluded that “a title insurance company does not owe a duty of care to third

parties in the recording of legal instruments.” Id. at 654.

      In our certification order, we indicated that the Washington Supreme Court’s

answer would be dispositive:

      If, as the district court reasoned, Chicago Title owed no duty, then we
      would affirm the district court's grant of summary judgment to
      Chicago Title. If Chicago Title did owe a duty of care, then summary
      judgment would be inappropriate at this stage. In that event, we likely
      would remand to the district court for a determination in the first
      instance as to causation, which the parties also dispute.

                                            3
Centurion, 793 F.3d at 1090. Thus, the Washington Supreme Court’s answer ends

this case. Because, under Washington law, Chicago Title owed no duty of care to

Plaintiffs, the district court did not err in granting summary judgment to Chicago

Title.

         The judgment of the district court is AFFIRMED.

                                         4