Plaintiffs appealed a San Diego County Superior Court (California) summary judgment for defendant bank on the basis that plaintiffs were collaterally estopped from prosecuting their breach of escrow agreement action.
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Overview
In plaintiffs’ action alleging that defendant failed to enforce an escrow agreement for which defendant acted as agent, plaintiffs appealed defendant bank’s summary judgment finding collateral estoppel and awarding defendant attorney fees. The court affirmed in part, reversed in part. The result of related litigation between plaintiffs, defendant, and the parties to the real estate transaction was that plaintiffs could not have been damaged by defendant’s alleged failure to obtain compliance with the terms of a subordination agreement. Accordingly, the judgment in that litigation conclusively resolved the issue of defendant’s alleged breach of contract in the instant case. Equitable estoppel did not apply because plaintiffs’ failed to allege any intentional or deliberate misrepresentation by defendant. Defendant was not entitled to attorney fees, however, because the general standardized escrow instructions indemnification clause did not put the principals on notice that it would provide fees to a prevailing party in litigation.
Outcome
Judgment was affirmed in part, reversed in part. A judgment in related litigation conclusively resolved the issue of defendant’s alleged breach of contract, collaterally estopping plaintiff from suing and defendant was not equitably estopped from asserting the defense. Standardized escrow instructions indemnification clause did not entitle defendant to attorney fees.
