Stewart Title Guaranty v. Bedik
Appellants Michael and David Bedik, the successor trustees and co beneficiaries of a testamentary trust known as the Bedik Family Trust (the Trust) were held liable for an overpayment of proceeds from the sale of Trust property. The overpayment resulted from an erroneous payoff demand submitted to escrow by the deceased's lender. Section 2943 of the Civil Code (section 2943) sets out the procedures that are to be followed in this situation: the lender reconveys the deed of trust and proceeds against the obligor as an unsecured creditor. If the lender fails to file the reconveyance, the title insurer may prepare and record a release of obligation under Civil Code section 2941 (section 2941), subdivision (b)(3). Here, rather than follow the statutory procedures, the title insurer, respondent Stewart Title Guaranty Company, paid the lender and sought reimbursement by pursuing claims for breach of contract, breach of warranty, unjust enrichment, and money paid by mistake against appellants individually and in their capacities as successor trustees of the Trust. The court granted respondent's motion for summary judgment, holding appellants jointly and severally responsible for the entire amount of the overpayment under both contract and restitutionary theories.
Court conclude that the summary judgment must be reversed.
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