2013 Ohio 4302
Ohio Ct. App.2013Background
- Griffin appeals a trial court summary judgment for FNAC on breach of covenant against encumbrances and denial of Griffin's cross-motion; case concerns West Market Street property in Warren, Ohio.
- FNAC conveyed the West Market Street property to David Griffin in June 2003 by general warranty deed stating the property was free from encumbrances; the deed did not except the then-existing mortgage to FNBA.
- David Griffin had an equitable interest from a 1992 land installment contract with FNAC; FNAC retained legal title until the contract was paid.
- David obtained a mortgage from FNBA in 2000 on the West Market Street property (and a lien on the Heather Lane property); David assigned his interest in the West Market Street land contract to FNBA.
- In May 2003 FNAC allegedly told David that Donald could obtain full release of liens by paying the land-contract balance; in June 2003 David paid the balance and FNAC gave the general warranty deed to David; David later transferred the West Market Street property to Donald via quit-claim in January 2004.
- FNBA foreclosed on the Heather Lane mortgage in 2007; FNAC sought summary judgment, while Griffin sought summary judgment on breach and asserted fraud related to the alleged release promise to Donald.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of covenant against encumbrances | Griffin contends the 2003 deed breached the covenant since a pre-existing FNBA mortgage encumbered the property. | FNAC asserts the encumbrance did not attach to FNAC’s title (only to David’s equitable interest) and hence was not an encumbrance under the deed. | Griffin’s claim survives; genuine issue of encumbrance exists. |
| Fraud/misrepresentation regarding release of mortgage | Griffin asserts FNAC promised release of liens if the land contract was paid, implying no encumbrances. | FNAC did not address fraud and there is no admissible evidence of intent to release; even if misrepresentation, issue remains fact-bound. | Second assignment sustained; fraud claim survives; remand for proceedings consistent with this opinion. |
Key Cases Cited
- Stockman v. Yanesh, 68 Ohio St.2d 63 (Ohio 1981) (encumbrance breaches warranty when encumbrance exists)
- Long v. Moler, 5 Ohio St. 271 (Ohio 1855) (known encumbrances are not excluded from a general warranty deed)
- Thornton v. Guckiean & Co., 77 Ohio App.3d 794 (Ohio App. 12th Dist. 1991) (equitable interest and encumbrances created on equitable interest can cloud title)
- Voytecek v. Peoples Sav. Bank Co., 65 Ohio App. 118 (Ohio App. 7th Dist. 1940) (encumbrance defined as cloud on title)
- Dietl v. Sipka, 185 Ohio App.3d 218 (Ohio App. 11th Dist. 2009) (encumbrance includes lien or liability attached to real property)
- Alemania Loan & Bldg. Co No. 2 v. Frantzreb, 56 Ohio St. 493 (Ohio 1897) (equitable mortgage creates lien on mortgagor’s equitable interest)