Appellant seller sought review of an order of the Superior Court of Alameda County that sustained respondent escrow holder’s demurrers without leave to amend relating to appellant’s first and second causes of action of the first amended complaint which alleged breach of fiduciary duty for failure to deposit escrow funds in an interest-bearing account and breach of duty as trustee by use of trust funds for the trustee’s own profit.
California Business Lawyer & Corporate Lawyer, Inc. explains how to write a Formal Demand Letter
Appellant seller sought review of an order that sustained respondent escrow holder’s demurrers without leave to amend relating to appellant’s first and second causes of action. The court affirmed the order as to the first allegation which alleged breach of fiduciary duty for failure to deposit escrow funds in an interest-bearing account, on the basis that an escrow agent had no common law duty to deposit funds in an interest-bearing account, absent instructions to do so, as the agency was a limited one. Absent such a duty, there was no negligence. The court held that appellant’s action for declaratory relief with regard to whether interest on the escrow account would be due to purchaser or plaintiff under Cal. Ins. Code § 12413.5 would not lie, as the object of Cal. Civ. Proc. Code § 1060 was not to afford plaintiff with a second cause of action for determination of an identical issue. The court affirmed the order as to the second cause of action, which alleged breach of duty as trustee by use of trust funds for the trustee’s own profit, on the basis that an escrow holder was not a “trustee,” Cal. Prob. Code § 16004, and did not have the powers or the obligations of a true trustee.
The judgment of dismissal was affirmed because the court determined both causes of action failed to state a cause of action as respondent escrow holder had no common law duty to deposit escrow funds in an interest-bearing account absent instructions to do so, and, as an escrow holder, he was an agent of the parties without the duties and obligations of a true trustee.
*
Be the first to comment.