Flashcards Studio

Facts: An escrow company licensed to handle real estate closings issues a closing clearance certificate stating that the title is marketable and free from encumbrances. The escrow officer knows the chain of title is contested and that a forged deed exists. Relying on this clearance, the buyer closes. After registration, the forged deed is discovered and the title is encumbered. The buyer suffers mental anguish, embarrassment, and loss of sleep and sues the escrow company for damages. (a)Identify the controlling doctrine on moral damages applicable to this case and the type of action it supports. (b)Distinguish moral damages from other damages and state what proof and relationship to fault are required. (c)Apply to the facts: Is the buyer entitled to moral damages? Explain the basis, any limitations, and the likely scope of the award.