Investors Warranty of America v. Chicago Title Ins
This is an eye-wateringly complex title insurance coverage case arising out of a complicated triangular loan transaction between a big lender, a small lender, and a now defunct California winery. The big lender refinanced a prominent Paso Robles winery. The small lender already had a lien on some of that winery’s property for about $6.5 million, but agreed to subordinate its lien to the big lender’s lien of $4 million – but only the $4 million. Unfortunately, the $4 million lien was part of an overall $21 million loan package and the small lender never agreed to subordinate its loan to the $17 million additionally lent by the big lender (in the form of two other loans, one for $11 million and one for $6 million). The big lender’s title insurer issued three separate title policies insuring all three of the big lender’s liens (for $4 million, $11 million, and $6 million) and the title policy for the $4 million lien insured the priority of the $4 million lien over the small
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