Barthels v. Santa Barbara Title Co.

[677]

Opinion

GILBERT, J.

In this action for title abstractor’s negligence, we hold that the negligence of the abstractor did not cause the property to lose value. Therefore, the property owner is not entitled to damages measured by the loss in value of the property. We also hold the trial court correctly determined other aspects of the award of damages. We affirm.

Facts

In 1976, Herbert Barthels purchased the last beach front parcel of property in the City of Santa Barbara (the City). He paid $24,500 for the unimproved lot. Escrow was through the Santa Barbara Title Company (Title Company) which also issued a policy of title insurance. The policy insured title to the lot and an appurtenant easement for access 15 feet wide.

Barthels, a local dentist, planned to build his residence on the parcel. In June of 1989, during the permitting process, he learned that the access easement was only seven and a half feet wide, and not fifteen feet as represented by the Title Company. The City refused to issue a building permit without a 15-foot-wide easement. The Title Company tendered $42,875, representing the purchase price as increased by the title insurance policy inflation endorsement.

Barthels sued the Title Company alleging abstractor’s negligence in determining that Barthels had a 15-foot wide easement. Barthels prayed for damages for loss of value of his property, money spent on construction plans and expenses incidental to processing permit applications. The Title Company did not deny it was negligent. The only question, therefore, was the amount of damages.

At trial Barthels testified that in 1989 when he learned of the defect in title, the property was worth $800,000 with the 15-foot easement and nothing without the easement. Barthels claimed that through 1992 he had out of pocket expenses for such items as property taxes and architectural and engineering fees in the amount of $27,381.25. The Title Company agreed that Barthels expenses were $21,524.40 through 1989, the year Barthels discovered the defect in title.

Barthels also claimed $280,000 as compensation for his own time devoted to development of the parcel. He testified he spent 1,400 hours and was claiming $200 per hour as the value of his time.