880 N.E.2d 488 | Ohio Ct. App. | 2007
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *742
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *743 {¶ 1} Plaintiff-appellant, Roger Davis Jr., appeals the decision of the Jefferson County Common Pleas Court granting summary judgment for defendants-appellees Matilda Montenery, Mario Busack, Busack Realty, Michal Julian, Mark Thomas, and Thomas Law Offices, L.L.C. The issue in this appeal is whether the trial court improperly granted summary judgment to appellees. For the reasons stated below, the grant of summary judgment to Matilda Montenery, Mario Busack, Busack Realty, and Michal Julian is hereby affirmed. The grant of summary judgment to Mark Thomas and Thomas Law Offices, L.L.C., is hereby reversed, and the cause is remanded for further proceedings consistent with law.
{¶ 3} Not long after selling the property to the Smiths, the Montenerys, by recorded deed, released their ability to pass the easement to their assigns and heirs. The Montenerys only retained the right to use the easement for their life. Thus, when the Montenerys sold the 1212 property or when both of them died, which ever came first, the easement would expire.
{¶ 4} In 2001, Davis bought the 1212 property from Matilda Montenery (her husband was now deceased). Davis financed the transaction through Brach Banking Trust Company ("BB T"). Matilda listed the property through Busack Realty, owned by Mario Busack. Michal Julian was contracted by Busack Realty to show the 1212 property. Busack, Busack Realty, and Julian are referred to collectively as Busack Realty.
{¶ 5} Prior to entering into the sales contract, Davis wanted to know how to access the barn on the 1212 property, that is, if access could be obtained from the roadway on the Smiths' property. Julian asked Matilda and Matilda indicated that she had an easement to use the Smiths' roadway. Julian checked this information at the county recorder's office and found the first deed which granted an easement to use the roadway to access the barn. That deed included language which would allow the easement to be transferred to Matilda's assigns and heirs. Julian informed Davis of this information and gave him a copy of the deed. Julian, however, did not find the second deed which released the easement as to Matilda's assigns and heirs. Thus, Davis was not informed at that time that the right to use the roadway would expire upon conveyance of the land to him.
{¶ 6} Around this time, Mark Thomas and Thomas Law Offices, L.L.C. (collectively, "Thomas") were contacted by BB T, the bank financing Davis's loan for the property. Thomas did title work on the property and purportedly found both deeds. At the time of doing the title work, Thomas was aware that the easement expired upon conveyance of the land. Davis was not informed prior to the purchase of the property about the release of the easement.
{¶ 7} From 2001 until 2004, Davis used the right of way until he received a letter from the Smiths' attorney indicating that the easement had expired upon Matilda's conveyance of the land to Davis and that he did not have the right to use the roadway. The Smiths requested that he immediately cease utilization of the roadway.
{¶ 8} Davis investigated the matter further and also contacted Thomas to investigate the matter. Thomas reviewed his notes and determined that the easement had expired. Thomas attempted to renegotiate the easement, but that attempt was futile.
{¶ 9} On June 13, 2005, Davis filed a complaint against Matilda, Busack Realty, and Thomas. Davis contended that had he known of the expired easement, he *745 would not have bought the land or he would have negotiated a lower sale price. The action against Matilda sounded in negligence, breach of contract, and fraud. The action against Busack Realty sounded in negligence, specifically negligent misrepresentation. The action against Thomas sounded in legal malpractice, negligence, and breach of contract. After discovery, all defendants filed motions for summary judgment. Davis opposed all three motions. On November 1, 2006, Thomas's motion for summary judgment was granted. On November 29, 2006, both the Busack Realty's and Matilda's motions for summary judgment were granted. Davis timely appeals from all three orders.
{¶ 12} There are two distinct arguments presented under this assignment of error. The first argument is based upon attorney malpractice. The second is based upon Thomas's status as a title abstractor.
{¶ 14} In order to establish a cause of action for malpractice, a plaintiff must establish a tripartite showing: an attorney-client relationship giving rise to *746
a duty, a breach of that duty, and damages proximately caused by the breach. Vahila v. Hall (1997),
{¶ 15} The element disputed in this case is whether an attorney-client relationship existed between Thomas and Davis. Without it, the legal-malpractice claim cannot survive.
{¶ 16} "[N]either a formal contract nor the payment of a retainer is necessary to trigger the creation of the attorney-client relationship. See, e.g., In reDisciplinary Action Against Giese (N.D. 2003),
{¶ 17} In deciding whether an attorney-client relationship exists, "the ultimate issue is whether the putative client reasonably believed that the relationship existed and that the attorney would therefore advance the interests of the putative client." Henry Filters, Inc. v. Peabody Barnes,Inc. (1992),
{¶ 18} Here, there was undisputedly no retainer or contract for services; however, as we have explained above, that is not needed to form the attorney-client relationship.Hardiman,
{¶ 19} Davis testified that Thomas was acting as his attorney, although he may not have contacted Thomas directly to represent him, because Davis told BB *747 T that he wanted to use Thomas. He further stated that he "used Mark Thomas for almost all my real estate things." On previous occasions, Thomas had been involved in title examinations through BB T where Davis was the borrower. On one of those occasions, Thomas had clearly represented Davis.
{¶ 20} Thomas contended, however, that during this transaction for the 1212 property, Davis was not his client; rather, his client was BB T, the lender. He asserted that it was BB T that requested that he do a title exam.
{¶ 21} That said, his title notes, which were admitted during his deposition, labeled Davis, not BB T, as the client. Thomas, however, qualified the notes, indicating that they were generic and used for contacting purposes; it was not a true indication of who his client was.
{¶ 22} Consequently, considering all of the above, reasonable minds could differ as to whether or not there was an attorney-client relationship between Thomas and Davis for the 1212 property transaction. Thus, as to the first element of legal malpractice — attorney-client relationship — there is a genuine issue of material fact.
{¶ 23} As to the second and third elements of legal malpractice, breach of duty and damages, there is sufficient showing by Davis to overcome a motion for summary judgment. Vahila,
{¶ 25} Davis admits that in Thomas v.Guarantee Title Trust Co. (1910),
{¶ 26} In Cedar, Cedar was selling a parcel of real estate to Akron Metropolitan Housing Authority ("AMHA"). The purchase agreement required Cedar to deliver title evidence to AMHA, which included a title report issued by Exchange Place Title Agency in the form of title insurance. Pursuant to that agreement, a commitment for title insurance was issued. However, the commitment listed clouds against the chain of title and stated that an action to quiet title would be necessary to eliminate the clouds. As a consequence, Cedar was unable to convey good title to AMHA on the intended date of closing. Thus, the closing and transfer of property were delayed.
{¶ 27} Later, it was determined that the clouds against the chain of title did not exist. Cedar contacted another title agency to complete the title. Cedar sued Exchange Place Title Agency, Inc., the title agency, and Commonwealth Land Title Insurance Company, the company that sold the title insurance, for the damages caused by the delay in closing and transfer of the property. The trial court granted summary judgment in favor of Commonwealth. Cedar dismissed the claims against Exchange.
{¶ 28} The Ninth Appellate District upheld the grant of summary judgment. It cited Thomas and explained that negligence in making or certifying an abstract of title does not sound in tort but is based in contract.
{¶ 29} Cedar argued that the Ohio Supreme Court has rejected the strict privity requirement in the context of a malpractice action against an accountant brought by an investor who relied on the accountant's negligently prepared audits.Haddon View Invest. Co. v. Coopers Lybrand
(1982),
{¶ 30} The Ninth District explained that it was both reasonable and foreseeable that Cedar would rely on the title examination and representations in the commitment prepared by Commonwealth and/or Exchange. However, it went on to determine that it could not recognize such reliance as a substantial nexus that would overcome the privity requirement in the context of abstractor liability because such recognition would directly contradict the Ohio Supreme Court's holding inThomas. Thus, as it had to follow the Ohio Supreme Court's decision, it affirmed the trial court's holding. *749
{¶ 31} Here, Davis is stating that Thomas, not as the attorney but as the title searcher, should be liable. As the Ninth District stated, while it may have been both reasonable and foreseeable that Davis would rely on any alleged assurances that Thomas made that the easement would survive conveyance, we are an intermediate court and therefore bound by the decision ofThomas. Cedar,
{¶ 32} In conclusion, the abstractor argument fails. Regardless, as stated above, the grant of summary judgment on the attorney-client relationship is vacated, and the cause is remanded for further proceedings consistent with the law. This assignment of error has some merit.
{¶ 34} The complaint against Matilda alleged that statements she made to Davis prior to and during the sale concerning the easement were false and fraudulent. It was claimed that her actions were negligent, intentional, fraudulent, and reckless. It was also claimed that any actions of the Busack Realty were attributable to Montenery because they acted as her agent.
{¶ 35} Montenery did not file a brief in this case. However, in her motion for summary judgment, she stated that the testimony and evidence shows that Montenery never made any representations directly to Davis and the representations she did make to her agent, Busack Realty, specifically Julian, did not concern whether the easement would survive conveyance but stated only the easement existed at that time.
{¶ 36} Davis admits and the evidence clearly discloses that Montenery never spoke directly to Davis and did not state to him that the easement would survive conveyance. That said, the record also clearly disclosed that Busack Realty represented Montenery — they were her realty company. It is also undisputed that Julian, working for Busack Realty, gave Davis a deed that showed that the easement would survive conveyance. Furthermore, it is clear that Julian did not find the later deed that indicated that the easement was changed from being *750 transferable to Montenery's assigns and heirs to being only an easement for her use and lifetime that was not transferable to heirs or assigns.
{¶ 37} Julian's testimony concerning what was told to her by Montenery is as follows:
{¶ 38} "Q. When you asked Ms. Montenery — when the easement was discussed with Ms. Montenery, you testified that your question was, `How do you get back to the barn?' Is that correct?
{¶ 39} "A. Correct.
{¶ 40} "Q. And her answer was, `I have an easement'?
{¶ 41} "A. That's correct, yes. She actually indicated — she pointed to the road, the roadway, and said, `That is Mr. Smith's road, and I have an easement to get back to the barn.'
{¶ 42} "Q. And that was true; she did have an easement. Isn't that correct?
{¶ 43} "A. Yes.
{¶ 44} "Q. Did you ask her if she had an easement to convey to a potential buyer?
{¶ 45} "A. No.
{¶ 46} "Mr. Abrams: Thank you very much. I have nothing further.
{¶ 47} "Examination By Mr. Delk:
{¶ 48} "Q. Just a follow-up. In your discussions with Ms. Montenery, did you present the easement question to her in such a way that it would be clear that, `Is this easement going to survive the closing"?
{¶ 49} "A. No, I did not ask it in that manner. I asked how you get back to the barn.
{¶ 50} "Q. Okay. But when you called her after the fact, later she said, `I didn't know it was extinguished.'?
{¶ 51} "A. That's correct, but that was several years later.
{¶ 52} "Q. I understand. Okay."
{¶ 53} Given those facts, her actions cannot amount to fraud. Fraud consists of "(a) a representation or, where there is a duty to disclose, concealment of a fact, (b) which is material to the transaction at hand, (c) made falsely, with knowledge of its falsity, or with such utter disregard and recklessness as to whether it is true or false that knowledge may be inferred, (d) with the intent of misleading another into relying upon it, (e) justifiable reliance upon the representation or concealment, and (f) a resulting injury proximately caused by the reliance." Groob v. KeyBank,
{¶ 54} Furthermore, any possible oral concealment of the validity of the easement by Montenery did not amount to fraud. Patton v. Ditmyer, 4th Dist. Nos. 05CA12, 05CA21, and 05CA22,
{¶ 55} Similarly, Julian's actions as the agent for Montenery would also not amount to fraud causing Montenery to be liable for fraud. As stated above, Julian admits that Montenery never indicated to her that the easement would survive conveyance. Julian, however, did do a search at the courthouse to determine whether Montenery was correct about having an easement. Julian's search at the courthouse revealed that Montenery did have an easement. Julian showed that deed containing the easement to Davis. However, Julian's search was not complete. She did not find the second deed that extinguished the ability to assign the easement. Her actions at most amounted to negligence for negligent misrepresentation.
{¶ 56} Thus, the question then arises whether the possible negligent misrepresentation of Julian rendered Montenery liable. The answer is yes; a principal is liable for negligent or intentional misrepresentations made by his agent, made within the course and scope of his agency. Stuart v.Natl. Indemn. Co. (1982),
{¶ 58} The claims against Busack Realty were for negligent misrepresentation. One commits negligent misrepresentation when "in the course of his business, profession or employment, or in any other transaction in which he has a pecuniary interest, [he] supplies false information for the guidance of others in their business transactions, [and he] is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information." Delman v. ClevelandHts. (1989),
{¶ 59} Thus, in order to prevail on this cause of action, Davis was required to present a genuine issue of material fact as to whether Busack Realty exercised reasonable care in obtaining the information that the easement would transfer with the sale of the property. Furthermore, there must be a genuine issue of material fact that Davis justifiably relied upon that information. This analysis can be divided into two parts: justifiable reliance and failure to exercise reasonable care in obtaining the information regarding the easement.
{¶ 60} Our analysis will begin with the justifiable-reliance element. Establishing justifiable reliance does not require a showing that the plaintiffs reliance conformed to what a "reasonable man" would have believed.Amerifirst Sav. Bank of Xenia v. Krug (1999),
{¶ 61} Here, evidence does indicate that Julian obtained information from Montenery that Montenery had an easement to use Smith's driveway. It also shows that Julian found a recorded deed indicating such an easement. Julian did *753 not, however, find the recorded deed that limited that easement to Montenery and would not transfer upon sale.
{¶ 62} Davis contends that he relied upon the information provided by Julian. However, statements made during his deposition do not support such a contention.
{¶ 63} "Q. And what did she tell you about the easement?
{¶ 64} "A. [Davis]. That she [Julian] was told the easement existed by her client so then she provided me a copy of an easement.
{¶ 65} "Q. Was that the easement that I showed you that's recorded in Volume 505, Page 515?
{¶ 66} "A. I believe so. I believe that's it.
{¶ 67} "Q. I don't have it but I think that's —
{¶ 68} "A. I think that's the right numbers.
{¶ 69} "Q. Right.
{¶ 70} "A. Uh-huh.
{¶ 71} "Q. Did you rely on that representation of Michal Julian?
{¶ 72} "A. No. I went to Mark [Thomas] on that."
{¶ 73} As can be seen above, Davis clearly admits that he did not rely on Julian's and Busack Realty's representation regarding the validity and continued existence of the easement after conveyance. Furthermore, he clearly indicates that he was doing his own investigation on the validity of the easement through Thomas, an attorney who does title work. Consequently, Davis's admission and indication, even when viewed in the light most favorable to him, could only lead a reasonable person to believe that he did not justifiably rely on Julian's and Busack Realty's representation.
{¶ 74} Thus, as there is no showing of justifiable reliance, the cause of action for negligent misrepresentation fails. There is no need for this court to examine whether Busack Realty failed to exercise reasonable care in obtaining the information regarding the easement (the other element of negligent misrepresentation).
{¶ 75} Hence, summary judgment was appropriately granted for Busack Realty. Likewise, summary judgment was also appropriately granted for Montenery since the representations made by her agent were not justifiably relied upon. This assignment of error and the first assignment (dealing with Montenery) of error lack merit. *754
Judgment affirmed in part and reversed in part, and cause remanded.
DEGENARO, P.J., and WAITE, J., concur.