Anderson v. Preferred Title & Guaranty Agency, Inc.
2014 Ohio 561
Ohio Ct. App.2014Background
- Kim L. Anderson (pro se) brought tort claims (negligence, misrepresentation, fraud, intentional infliction of emotional distress) against Preferred Title & Guaranty Agency, Inc., its VP Frank Farkas, Stewart Title Guaranty Company, and Rebecca Barley arising from three real-estate closings.
- Barley (a Preferred Title employee) prepared HUD-1 settlement statements that listed Anderson's business debts as second mortgages; Farkas approved the paperwork. Anderson received and retained funds from the closings.
- Anderson was later criminally prosecuted and convicted for offenses tied to those transactions (pattern of corrupt activity, fraud, theft, forgery, money laundering), sentenced to 15 years and ordered to pay >$1M restitution.
- Anderson sued civilly claiming the defendants’ incorrect HUD-1s caused his prosecution/convictions; he moved for summary judgment seeking $12M. Defendants moved for summary judgment, asserting clerical error, reliance on documents provided by Anderson, and invoking unclean hands.
- The trial court denied Anderson’s summary-judgment motion and granted summary judgment to Stewart Title, Preferred Title, and Farkas, finding Anderson’s criminal acts broke the causal chain and asserting unclean hands. Anderson appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Liability of Preferred Title / Farkas for HUD-1 errors | Barley (and Farkas approving) made the fatal wrongful act; Anderson argues no factual dispute and seeks summary judgment | Errors were clerical, defendants relied on documents provided by Anderson; Anderson’s own criminal acts were the proximate cause of his injuries | Court: Defendants entitled to summary judgment; Anderson’s criminal acts broke proximate-cause chain; unclean hands bars relief |
| Vicarious / contract liability of Stewart Title | Stewart Title is vicariously liable and/or bound by an implied contract due to underwriting relationship with Preferred Title | Stewart Title had no direct role in the transactions; vicarious liability impossible if agent (Preferred) not liable; no contract claim in record | Court: Grant summary judgment for Stewart Title; no agent liability to impute and no independent contract claim supported in record |
| Appropriateness of denying Anderson’s summary judgment motion | HUD-1 errors showed defendants’ liability; no genuine issue of material fact | Anderson cannot show causation because his own criminal conduct was intervening and dispositive | Court: Denied Anderson’s motion; Anderson cannot prevail as a matter of law given intervening criminal acts |
Key Cases Cited
- Comer v. Risko, 106 Ohio St.3d 185 (2005) (no vicarious liability where agent is not liable)
- Dresher v. Burt, 75 Ohio St.3d 280 (1996) (movant’s initial burden on summary judgment and required evidentiary showing)
- Vahila v. Hall, 77 Ohio St.3d 421 (1997) (summary-judgment response standards)
- State ex rel. Grady v. State Emp. Relations Bd., 78 Ohio St.3d 181 (1997) (standard for summary judgment review)
- Feichtner v. Ohio Dept. of Transp., 114 Ohio App.3d 346 (1996) (third-party criminal act may sever proximate causation unless foreseeable)
- Bilicic v. Brake, 64 Ohio App.3d 304 (1989) (intervening criminal act can break causal chain)