Lead Opinion
On August 13,1987 аppellant, Great Plains Federal Savings and Loan Association (appellant), sued appellees, an attorney and a law firm (appellees), in tort for legal malpractice and for breach of an oral contract between the parties or, alternatively, a contract between appellees and another whereby appellant claimed third-party beneficiary status. Certain documents were attached to the petition, including a written title opinion from appellees to appellant dated August 14, 1984, a follow-up opinion dated September 24, 1984 and a letter from appellees to appellant dated July 24, 1986 indicating a mortgage of record when the earlier title opinions were rendered was only recently discovered by appellees. Appellees moved to dismiss pursuant to 12 O.S.Supp.1984, § 2012(B)(6). They argued the petition failed to state a claim upon which relief could be granted because it showed on its face the action was barred by the two year limitation period found at 12 O.S.1981, § 95 (Third).
On August 14, 1984 appellees, by B. Wayne Dabney, sent a title opinion/letter to Bill Davis of appellant, which said it was being sent at Davis’ request, an abstract of title certified to October 1, 1975 had been examined, as well as certain instruments recorded in the Grady County Clerk’s Office. The letter also detailed the debt to the other financial institution. The last sentence of the letter provides in pertinent part, “[t]his opinion is ... for loan purposes only and is written for the use and benefit of the bank only.” On August 16, 1984 appellant, in reliance upon the letter, loaned Hudson $375,000.00 secured by a real estate mortgage. On September 24, 1984 Dabney sent a follow-up title opinion/letter to Davis opining the mortgage to appellant “appears to be a valid and existing second mortgage lien upon the ... property.” (emphasis in original) Appellant’s loan to Hudson was due and payable, along with certain interest, on February 14,
As we view the allegations and the reasonable inferences to be drawn from them, appellant allеged not only that appel-lees were engaged to perform a title opinion relying on an abstract of title certified by an independent abstracting company, but they were engaged either by appellant itself or, alternatively, by Hudson, with appellant being a specifically intended third-party beneficiary, to search the records of the County Clerk from the period of the abstract of title noted in the August Hth title opinion/letter (i.e. October 1, 1975) to the date of the August 14th letter in 1984■ In essence, part of appel-lees' responsibilities under the purported oral contract was to act like an abstractor to search the records. Although not expressly alleged in the petition or documents attached thereto we believe the reasonable inference flowing from the petition and documents is appellees were alleged to have agreed to furnish a correct statement of those documents affecting the title for loan purposes from October 1, 1975 (the certification date of the abstract reviewed) to the date of the title opinion in August 1984.
We have held when an abstracting company breaches an oral agreement to diligently search real estate records, provide an abstract of title and a certificate thereof, the cause of action is one founded on the breach of an oral contract and is governed by the three year limitation period. Close v. Coates,
Appellees argue the instant case should be controlled by Funnell v. Jones,
We have held a party may bring a claim based in both tort and contract against a professional and that such action may arise from the same set of facts. Flint Ridge Development Company, Inc. v. Benham-Blair and Affiliates, Inc.,
Consistent with this view is a case relied on by both parties to support their respective positions, Seanor v. Browne,
Appellees argue, however, the general rule that attorneys are liable for their misdeeds only to their employers, i.e. their clients and normally some privity of contract is necessary between the suing party and the legal practitioner. We do not question the general rule as stated in cases such as Savings Bank v. Ward,
Given the rather pointed statement of Dabney contained in the last sentence of the August 14th title opinion/letter to Davis that the letter opinion is written for the use and benefit of appellant only we would be hard-pressed to say a factual question is not raised at the pleading stage as to appellant’s status as a third-party beneficiary. As also noted, Dabney’s initial letter stated it was being sent at Davis’ request. We also note the August 14th letter contained the following language, “[s]ubject to the following objections, exceptions and requirements, I approve the title for loan purposes[]”. These allegations at the pleading stage are sufficient to allow the case to go forward and were sufficient to withstand a motion to dismiss for failure to state a claim upon which relief can be granted.
For the above reasons, the decision of the Court of Appeals is VACATED, the judgment of the trial court dismissing the action is REVERSED and the matter is REMANDED to the trial court for further proceеdings.
Notes
. Section 95 was recently amended by the Forty-Third Legislature in a manner not pertinent here. The amendment concerns time limits for certain types of sexual abuse cases and may be found at 1992 Okla.Sess.Law Serv., Ch. 344, § 1.
. Much briefing of the parties on appeal and the decision of the Court of Appeals concerns the limitation period for torts found at § 95 (Third) and applicability of the discovery rule to legal malpractice cases. No such argument was made by appellant in its two response briefs to the motion to dismiss filed in the trial court.
. In ruling on a motion to dismiss allegations in the petition must be construed in connection with exhibits attached to the pleading. See Eckel v. Adair,
A motion to dismiss for failure to state a claim upon which relief can be granted under paragraph 6 of subsection B of Section 2012 replaces the code versions of the general demurrer to the pleadings. But a petition should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief, (citations omitted)
Okla.Stat.Ann. tit. 12, § 2012, Committee Comment to Section 2012 (West). Both § 2012 and § 2010 have remained unchanged since the adoption of the Oklahoma Pleading Code in 1984. Finally, where a petition pleads facts sufficient upon their face to show an action is not barred and has been brought in the time allowed by statute, it is error to sustain a demurrer thereto. First National Bank of Harrah v. Wright,
. Of course, we cannot speak to whether or not appellees actually agreed to correctly search and report all such documents. Here we are merely at the pleading stage and we must take as true all well-plead allegations in the petition and documents attached thereto and the reasonable inferences to be drawn therefrom. Eckel v. Adair, note 3, supra.
. We wish to point out we do not intimate the alleged contract is exactly like one that an ab-stractor covered by the Oklahoma Abstractors Law, 74 O.S.1991, § 227.10 et seq. might enter into or that appellees were engaged in conduct subject to that Law. We simply hold on the facts alleged in the petition, with attached documents, and the reasonable inferences to be drawn therefrom, the allegations are sufficiently like the abstractor situation under the cases cited in the text to call for use of the three year limitation period for oral contracts. We also note § 227.29 of the Oklahoma Abstractors Law provides a five year statute of limitation from the date the abstract certificate is issued. Appellant does not argue said limitation period or the Abstractors Law in general is applicable here.
. We note Funnell cited to Seanor v. Browne when it stated an action for malpractice, whether legal or medical, though based on a contract of employment, is an action in tort governed by the two year limitation period. Funnell, 737 P.2d at 107. Obviously, in that Seanor itself also recognized the potentiality for a contract theory governed by the three year limitation period, Funnell could not hаve been holding all actions against attorneys for legal or legally related work must be grounded in tort no matter what the lawyer agreed to do or accomplish.
. We note that although appellant does allege in the petition appellees were negligent in performing under the alleged contract (apparently because appellant mistakenly thought negligence had to be proved even if a specific performance was promised) the petition does not unequivocally indicate the agreement bound appel-lees only by a requirement of ordinary care in searching for and reporting relevant documents. Accordingly, under our liberal pleading rules and the standard for determining when a motion to dismiss for failure to state a claim upon which relief can be granted should be sustained it was improper to sustain the motion to dismiss. Whether appellees did, in fact, bind themselves to a specific performance without reference to and irrespective of any negligence on their part so as to support a contract action beyond the pleading stage will, of course, have to await further developments in the trial court. At this stage of the proceeding, however, we can express no view as to what the true facts were. This determination can be made only upon further proof. Our decision therefore should not be read to foreclose appellees from pursuing their statute of limitation defense via a motion for summary judgment under the applicable rules set out herein for when an action against a professional may appropriately proceed in contract or, alternatively, would only support an action sounding in tort which would be subject to the shorter two year limitation period of 12 O.S.1981, § 95 (Third).
. Appellees’ reliance on cases such as Anderson v. Canaday,
. For cases recognizing attorneys may be liable based on a third-party beneficiary analysis see Annot. “Attorney's liability, to one other than immediate client, for negligence in connection with legal duties,”
Concurrence Opinion
with whom KAUGER, Justice, joins, concurring.
The Court of Appeals affirmed the trial court’s dismissal (for failure to state a claim) of an action against a lawyer for damages from his failure to discover and
Where the law imposes a duty in the context of a relationship born of a contract, a person injured by substandard performance of duty that is his/her due need not bring a tort action; nor need he/she elect between remedies. Rather, he/she may press a claim for breach of contract and in tort, if the evidence should support both.
“The Legislature shall not ... pass any ... special law ...
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Regulating the practice or ... inquiry before the courts....”
CONCLUSION
I would today overrule Seanor
. This action was filed August 13, 1987. The sufficiency of the petition under review must be measured by the Oklahoma Pleаding Code [Pleading Code], 12 O.S.Supp.1984 §§ 2001 et seq., which is patterned after the Federal Rules of Civil Procedure.
The terms of 12 O.S.Supp.1984 § 2008(A)(1) provide:
"A. CLAIMS FOR RELIEF. A pleading which sets forth a claim for relief, whether an original claim, counterclaim, cross-claim or third-party claim, shall contain:
1. A short and plain statement of the claim showing that the pleader is entitled to relief;
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Relief in the alternative or of several different types may be demanded." [Emphasis mine.]
Section 2008 was amended by Laws 1987, c. 78 § 2, eff. Nov. 1, 1987; the amendment has no effect upon this appeal.
The terms of Fed.R.Civ.P. 8(a) provide in pertinent part:
“(a) Claims for relief. A pleading which sets forth a claim for relief ... shall contain: ... (2) a short and plain statement of the claim showing that the pleader is entitlеd to relief, * * *." [Emphasis mine.]
Rule 8(a) is intended to ensure that the opposing party receive fair notice of the plaintiff's claim and the grounds upon which it rests. Conley v. Gibson,
. The terms of 12 O.S.1984 Supp. § 2012(B)(6) provide in pertinent part:
"... the following defenses may at the option of the pleader be made by motion:
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6. Failure to state a claim upon which relief can be granted; * * *”
The § 2012(B)(6) dismissal for failure to state a claim upon which relief may be granted is appropriate only when it is beyond a doubt that no factual situation exists which entitles the claimant to relief. Frazier v. Bryan Memorial Hosp. Authority, Okl.,
.Under the old common-law forms of action regime, if the plaintiff brought assumpsit, his cause of action was founded on contract; if he brought trespass, case, deceit or trover, the strictures governing tort had to be met. See W. Prosser, The Borderline of Tort and Contract, Selected Topics on the Law of Torts, p. 429-430 (1953). The Code of Civil Procedure which governed in Oklahoma before its repeal in 1984 was designed to eliminate sоme of the extreme technicalities of common-law procedure. An identical code was in effect in many other states. Even after the code’s enactment, some states clung to the “theories of the pleadings" mentality; on the particular facts pleaded or proved, these jurisdictions required that the action be identified as either ex delicto or ex contractu.
Other states (like Oklahoma) let the pleader elect the theory of recovery. Prosser, supra at 430. See Oklahoma Natural Gas v. Pack,
Many states, including Oklahoma, later adopted the federal notice pleading regime. See 12 O.S.1984 Supp. §§ 2001 et seq. With federal notice pleading, the doctrine of election of remedies became an anachronism. 12 O.S.Supp.1984 § 2008(E)(2); Howell v. James, Okl.,
“A party may set forth, and at trial rely on, two or more statements of a claim or defense alternatively or hypothetically, either in one count or defense or in separate counts or defenses. * * * ” [Emphasis mine.] Section 2008 was amended by 12 O.S.Supp.1987, eff. Nov. 1, 1987; the amendment has no effect upon this appeal.
Although inconsistent judgments and double recovery may not be allowed, a party may now fully litigate all the theories in one trial. Howell, supra at 447.
. See e.g., Seanor v. Browne,
. Howell, supra note 3 at 446-448; Chandler, infra note 14 at 862 n. 13.
. Seanor, supra note 4.
. Even after the aberrational Seаnor norm appeared on the juristic stage, we continued to afford the pleader an election where the gravamen of an action was not breach of contract but rather the defendant’s tortious conduct in the performance of a duty derived from a contractual relationship. See Burton v. Juzwik, Okl.,
Several generations of legal encyclopedias published on this side of the Atlantic have considered the common-law rule that permits a pleader in malpractice to bring either a contract or a tort claim against a professional defendant to be in the mainstream of American jurisprudence. See 1 R.L.C. Actions § 7 (1914), citing among others Hobbs, supra note 3,
. The practice of allowing either a contract or a tort action comes from the English common law. When speaking for the court in Brown v. Boorman, 11 Cl. & F. 1, 8 Eng.Rep. 1003 (1844), Lord Campbell said that "[w]herever there is a contract and something to be done in the course of the employment which is the subject of that contract, if there is a breach of duty in the course of that employment, the plaintiff may recover either in tort or in contract." [Emphasis mine.] The first reported English malpractice cáse was founded on contract. Slater v. Baker, 2 Wils.K.B. 359, 95 Eng.Rep. 860 (1767).
. Seanor, supra note 4.
. According to Professor Charles W. Wolfram of Cornell Law School, once the client-lawyer relationship is formed some of its contractual components are no longer subject to alteration by the parties; suits to enforce the lawyer’s obligation may ordinarily be brought either ex contractu or ex delicto. Restatement (Third) of the Law — The Law Governing Lawyers § 26 cmt. b, p. 89 (Tentative Draft No. 5, March 16, 1992).
. The pertinent terms of Art. 5, § 46, Okl. Const., are:
. "Special laws are those which single out less than an entire class of similarly affected persons or things for different treatment.” Reynolds v. Porter, Okl.,
. For a full explanation that the "theories of the pleading mentality” has no place in the federal rules regime, see C. Wright and A. Miller, 5 Federal Practice and Procedure, § 1219 (2nd Ed. 1990). See also Gins v. Mauser Plumbing Supply Company,
. Howell, supra note 3 at 446-448; Chandler v. Denton, Okl.,
. Silver v. Slusher, Okl.,
. Bradley Chevrolet, Inc. v. Goodson, Okl.,
. Seanor, supra note 4.
. For the view that in this century malpractice litigation has shifted to tort from the earlier contractual context of the physician/patient relationship because of "professional, social, and regulatory efforts to distinguish the provision of health care services from ordinary commercial transactions and to create an aura of professionalism untainted by crass commercialism," see G. Robinson, Rethinking the Allocation of Medical Malpractice Risks Between Patients and Providers, 49 Law and Contemporary Problems, 173, 182 (1986). [Emphasis mine.]
. The common law, also called the unwritten law, was known at its birth by the Latin name of lex non scripta regni Angliae or consuetudo Angliae. A body of non-statutory law of the kingdom of England and Wales, it originated from custom and judicial decisions. McCormack v. Oklahoma Pub. Co., Okl.,
. The pleader’s freedom to press all applicable theories or to choose among them leaves unaffected the basic differences in the substantive law governing tort and contract actions. For example, punitive damages are not recoverable upon a contract claim. Colby v. Daniels,
. Howell, supra note 3 at 446-448; Chandler, supra note 14 at 862 n. 13.
. The provisions of 12 O.S.1991 § 2 are:
“The common law, as modified by constitutional and statutory law, judicial decisions and the condition and wants of the people, shall remain in force in aid of the genеral statutes of Oklahoma; but the rule of the common law, that statutes in derogation thereof, shall be strictly construed, shall not be applicable to any general statute of Oklahoma; but all such statutes shall be liberally construed to promote their object.” [Emphasis mine.]
Concurrence Opinion
concurring specially.
The majority correctly holds that our current pleading code is sufficiently liberal
I would also, as does the majority, distinguish Funnell v. Jones,
I continue to entertain the view expressed by us in Funnell and by the Oregon Court in Securities-Intermountain, Inc. v. Sunset Fuel Co.,
