LICK MILL CREEK APARTMENTS V. CHICAGO TITLE INSURANCE CO.
231 Cal. App. 3d 1654, 283 Cal. Rptr. 231 (1991)
NATURE OF THE CASE: Lick Mill (P) appealed from a judgment, which dismissed, without
leave to amend, the demurrer of Chicago (D), title insurance companies, in P's action to
recover for the costs of removing hazardous substances.
FACTS: In 1979, Kimball Small Investments 103 (K) purchased the property. Prior to 1979
various corporations operated warehouses and chemical processing plants on the 30 acres of
land near the Guadalupe River in Santa Clara County. Between 1979 and 1981 the California
Department of Health Services ordered K to remedy the toxic contamination of the property. K
did not comply with this order. In early 1986, Lick Mill Creek Apartments (P) bought lot 1
of the property from K. P purchased title insurance from Chicago Title Insurance Co. (D).
The policy was an ATLA policy. Prior to issuing the policy, D commissioned a survey and
inspection of the property by Carroll Resources Engineering & Management (C). Ps
subsequently bought lots 2 and 3 from K and secured 2 additional ATLA policies from D and
First American Title Insurance Company. The entire site was surveyed and inspected. During
the survey and inspection, pipes, tanks, and pumps, among other things, were found on the
property. There were also records held by local governmental agencies indicating the
presence of hazardous substances and an order for K to clean up the contamination. P
incurred the expense of cleaning up the hazardous materials. P claimed that the policy given
by D insured marketability of title, and that the presence of hazardous materials made the
property unmarketable. The trial court held that D's insurance policy did not cover the
costs of removing hazardous substances. P appealed.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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