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November 2011

Gordon & Rees Los Angeles Team Secures Appellate Victory

Los Angeles Partner Gary J. Lorch recently obtained victory before the California Court of Appeal, Second Appellate District, Division Six, obtaining affirmance of the trial court's Order dismissing a case against the firm's client, California Land Title Association ("CLTA").

Plaintiffs alleged that they sustained a loss that was covered by their title insurance policy.  After the title insurer denied full coverage of the claim, Plaintiffs filed suit against their title insurer and also named CLTA as a defendant.  As against CLTA, Plaintiffs contended that CLTA's general marketing on behalf of the title insurance industry and its insurer members, and drafting of standard form policies of title insurance, constituted a violation of California's Cartwright Act (Business & Professions Code § 16700 et seq.), Unfair Competition statute (Business & Professions Code § 17200 et seq.) and false advertising statute (Business & Professions Code § 17500 et seq.).  Plaintiffs alleged that CLTA, on behalf of and in conspiracy with its member title insurers, had affirmatively misrepresented the value of title insurance and had attempted to unlawfully limit the type and scope of title insurance available to consumers in California. CLTA successfully demurred to the Complaint, and Plaintiffs appealed.

The Appellate Court affirmed the trial court's ruling, finding that CLTA's general promotion of the title industry and drafting of standardized forms did not form the basis for viable claims for antitrust violation, unfair competition or false advertising. The Appellate Court's opinion adopted the majority of the arguments set forth by Gordon & Rees in its briefing, including that CLTA's actions as a trade organization were not "unlawful acts" designed to restrain trade but. rather, were lawful acts intended to promote the title insurance industry.

 

Gary J. Lorch



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