Alereza v. Chicago Title Co.
Annotate this CaseIn early 2008, plaintiff-appellant Taghi Alereza agreed to help his nephew Habib (Bobby) purchase a business consisting of a gas station and convenience store in Sacramento. They planned to have Bobby run the business. Alereza’s role involved nothing more than providing the initial purchase funds and a $100,000 note secured by his residence. The sole issue in this appeal centered on whether escrow company Chicago Title Company (Chicago Title) owed a legal duty of care to Alereza, who was not a party to the escrow nor mentioned as a third party beneficiary in the escrow instructions. Chicago Title admitted its employee negligently listed the wrong name of the insured (the purchaser of the gas station business) when securing a new certificate of insurance for the business. “This was the first of a series of missteps by several persons that eventually led to Alereza giving a personal guarantee to save the gas station business.” Claiming damages for losses incurred after giving his personal guarantee, Alereza sued Chicago Title. The trial court granted Chicago Title’s motion for nonsuit, and Alereza appealed. The Court of Appeal concluded Chicago Title did not owe a duty of care to Alereza because he was not a party to the escrow, not mentioned in the escrow instructions as a third party beneficiary, and did not sustain his losses as a direct result of the escrow company’s negligence.
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