Under Civ. Code 2941(b)(6), a title insurance company that prepares or records a release under section 2941(b)(3), is “liable to any party for damages, including attorney’s fees, which any person may sustain by reason of the issuance and recording of the release.” This case holds that a party that took the assignment of a promissory note secured by a deed of trust could sue the title company for having wrongfully recorded a release of the deed of trust even if the recordation occurred before the assignment. A claim for damage sustained by reason of the release cannot be asserted apart from the secured promissory note from which it arises and is essential to a complete and adequate enforcement of the not, so it passes with an assignment of the note even if not mentioned in the assignment. Heritage Pacific Financial, LLC v. Monroy (2013) 215 Cal.App.4th 972 is distinguishable. There, the claim was for fraudulent inducement of the assigned loan. That claim could be brought apart from a suit on the promissory note and was not essential to enforcement of the note, so it did not pass to the assignee of the note absent express assignment.
California Court of Appeal, First District, Division Two; January 26, 2018; 2018 WL 564588.