Peterson v. McCAVIC
249 Or. App. 343
Or. Ct. App.2012Background
- Peterson planned to buy a lot, build a house, and earn a profit from resale.
- Lot actually conveyed was Lot 8, 1st Addition, not Lot 8, Phase I, due to a misdescription change in escrow documents.
- Amerititle, as escrow agent, altered the property description without notice or instruction from the parties and prepared conveyance documents based on that change.
- Peterson, unaware of the mix-up, conveyed funds and built on the wrong lot; the Fletchers sued for trespass, and Peterson filed third-party claims against the McCavics and Amerititle.
- Jury found Amerititle negligent on multiple grounds and awarded damages including lost profits, with fault apportioned 45% Amerititle, 40% McCavic, 15% Peterson.
- Court granted summary judgment on some claims, directed verdicts on others, and Peterson appealed; Amerititle cross-appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Duty of escrow to prepare documents | Peterson argues Amerititle's extra-contractual actions created a duty to exercise care. | Amerititle contends escrow agents owe only to follow instructions unless acting outside scope. | Escrow can owe duty when acting extra-contractually. |
| Lost profits recoverability | Peterson sought lost profits based on anticipated construction costs and profits. | Amerititle contends evidence is speculative and not proven with reasonable certainty. | Evidence could support some net lost profits; not clearly insufficient. |
| Reasonableness of reliance on misrepresentation | Peterson relied on Amerititle's representations that closing papers related to the intended lot. | Peterson did not read closing documents and relied unreasonably on misrepresentations. | Reasonableness of reliance must be evaluated factually; not legally foreclosed on summary judgment. |
| Summary judgment on misrepresentation | Peterson contends there are genuine issues of material fact about reliance. | Amerititle argues lack of reliance or unreasonableness as a matter of law. | Court reversed summary judgment on misrepresentation; remanded for trial on that claim. |
Key Cases Cited
- McDonald v. Title Insurance Co. of Oregon, 49 Or.App. 1055 (1980) (escrow duty beyond neutral holder when advising)
- Ivy v. Transamerica Title Insurance Co., 90 Or.App. 511 (1988) (extra-contractual duties for wrong description provided)
- Lindstrand v. Transamerica Title Ins. Co., 127 Or.App. 693 (1994) (nongratuitous information can create duty)
- Bowles v. Key Title Co., 163 Or.App. 9 (1999) (escrow role as holder of stakes; no duty to inform about status absent extra duties)
- Oregon Steel Mills, Inc. v. Coopers & Lybrand, LLP, 336 Or. 329 (2004) (duty when special relationship establishes care)
- Onita Pacific Corp. v. Trustees of Bronson, 315 Or. 149 (1992) (duty for economic loss requires independent obligation)
- Wieber v. FedEx Ground Package System, Inc., 231 Or.App. 469 (2009) (reliance and fraud proof standards in summary judgment context)
- OPERB v. Simat, Helliesen & Eichner, 191 Or.App. 408 (2004) (reasonableness of reliance in fraud is generally a fact question)
- Conzelmann v. N.W.P. & D. Prod. Co., 190 Or. 332 (1950) (classic fraud proof framework)