Harpole v. Powell County Title Co.
2013 MT 257
Mont.2013Background
- Tom Harpole owned property in Powell County since 1991 and had long used an access known as Harpole Road.
- In 2008 Harpole sought buyers and obtained a preliminary title commitment from Powell County Title (issued for First American) that contained an exception for "lack of right of access."
- Title examiner Grace Foster searched county public records and consulted county officials; she did not find a recorded dedication or easement and issued the access exception.
- Harpole independently discovered a 1903 Road Record and other historical materials showing a 1903 County Road No. 9; after county review the County Attorney concluded Harpole Road was a dedicated county road and an amended commitment deleted the exception.
- Harpole alleges the title companies negligently failed to perform a reasonably diligent public-record search and misstated the road’s status, causing loss of a prospective $800,000 sale; the district court granted summary judgment for the title companies and Harpole appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether title examiner breached duty by failing to find 1903 Road Record (common-law negligence) | Foster should have found the 1903 document; failure to conduct a reasonably diligent public-record search caused plaintiff’s loss | Foster reasonably searched the public records required by Malinak; the 1903 Road Record was not of record/publicly filed and did not conclusively establish access | Affirmed: no breach — search was reasonably diligent and the 1903 document was not a public record at time of search |
| Whether Foster’s oral statements and/or the preliminary commitment constitute negligent misrepresentation | Oral statements that Harpole Road was not a county road were false and made without reasonable grounds; plaintiff relied to his detriment | Written preliminary commitment is not a representation under §33-25-111(2), MCA; Foster’s oral statements were truthful given her record search and she had reasonable grounds | Affirmed: oral statements were not untrue or made without reasonable grounds; negligent-misrepresentation claim fails |
| Causation and damages (loss of prospective buyer and reduced sale price) | Affidavits show buyer withdrew because of exception and plaintiff suffered price differential damages | Even if damages asserted, no breach or actionable misrepresentation; causation insufficient without duty/breach | Not reached on merits because claimant failed to prove duty/breach; summary judgment for defendants stands |
| Appeal-bond issue (companion case) | Harpole challenges district court’s requirement to post appellate bond | Title companies supported bond | Court declined to address because appellant failed to brief the issue per rules |
Key Cases Cited
- Malinak v. Safeco Title Ins. Co., 203 Mont. 69 (Mont.) (title insurer must base commitment on a reasonably diligent search of public records)
- Miller v. Title Ins. Co., 296 Mont. 155 (Mont. 1999) (policy/public-records definitions limit insurer’s duty to matters of public record)
- Osterman v. Sears, 318 Mont. 342 (Mont. 2003) (elements of negligent misrepresentation)
- Brown v. Merrill Lynch, Pierce, Fenner & Smith, 197 Mont. 1 (Mont. 1981) (adopting Restatement (Second) of Torts § 552 "reasonable care" standard for negligent misrepresentation)
- Kitchen Krafters v. Eastside Bank, 242 Mont. 155 (Mont. 1990) (articulating multi-prong negligent misrepresentation test)
- Yellowstone II Dev. Group, Inc. v. First Am. Title Ins. Co., 304 Mont. 223 (Mont. 2001) (application of negligent-misrepresentation principles to title insurer)