JOHN MAI AND MM NE LLC, A COLORADO LIMITED LIABILITY COMPANY, APPELLEES, V. JANICE GERMAN AND DAWES COUNTY ABSTRACT & TITLE, INC., A NEBRASKA CORPORATION, APPELLANTS.
No. S-22-017
Nebraska Supreme Court
January 6, 2023
313 Neb. 187
MILLER-LERMAN, J.
N.W.2d
Summary Judgment: Appeal and Error. An appellate court affirms a lower court‘s grant of summary judgment if the pleadings and admitted evidence show that there is no genuine issue as to any material facts or as to the ultimate inferences that may be drawn from the facts and that the moving party is entitled to judgment as a matter of law. - ____: ____. An appellate court reviews the district court‘s grant of summary judgment de novo, viewing the record in the light most favorable to the nonmoving party and drawing all reasonable inferences in that party‘s favor.
- Limitations of Actions: Appeal and Error. The question of which statute of limitations apрlies is a question of law that an appellate court must decide independently of the conclusion reached by the trial court.
- Limitations of Actions: Negligence. To determine whether the statute of limitations for professional negligence,
Neb. Rev. Stat. § 25-222 (Reissue 2016), applies to a plaintiff‘s claim, a court determines whether the defendant is a professional and was acting in a professional capacity in rendering the services upon which the claim is based. - Limitations of Actions: Negligence: Words and Phrases. To determine whether a particular act or service is professional in nature, a court аpplying
Neb. Rev. Stat. § 25-222 (Reissue 2016) looks to the nature of the act or service itself and the circumstances under which it was performed. - Limitations of Actions: Title: Negligence: Words and Phrases. Abstracters’ performing title searches render “professional services”
and are subject to the limitations periods in Neb. Rev. Stat. § 25-222 (Reissue 2016) for claims arising from these functions. - Limitations of Actions: Negligence: Words and Phrases. For purposes of
Neb. Rev. Stat. § 25-222 (Reissue 2016), an occupation is not a “profession” unless the following elements are present: (1) The profession requires specialized knowledge; (2) the profession requires long and intensive preparation; (3) preparation must include instruction in skills and methods of the professiоn; (4) preparation must include scientific, historical, or scholarly principles underlying the skills and methods of the profession; (5) membership in a professional organization is required; (6) a professional organization or concerted opinion within an organization regulates and enforces standards for membership; (7) the standards for membership include high standards of achievement; (8) the standards for membership include high standards of conduct; (9) its members are committed to continued study; (10) its members are committed to a specific kind of work; and (11) thе specific kind of work has for its primary purpose the rendering of a public service. - Limitations of Actions: Words and Phrases. “Discovery,” in the context of statutes of limitations, refers to the fact that one knows of the existence of an injury and not that one has a legal right to seek redress.
- Limitations of Actions: Negligence: Words and Phrases. In a professional negligence case, “discovery of the act or omission” occurs when the party knows of facts sufficient to put a person of ordinary intelligence and prudence on inquiry which, if pursued, would lead to the knowledge of facts constituting the basis of the cause of action.
Appeal from the District Court for Dawes County: TRAVIS P. O‘GORMAN, Judge. Affirmed.
Victor E. Covalt III and G. Stephen Long, pro hac vice, for appellants.
Amy L. Patras, of Crites, Shaffer, Connealy, Watson, Patras & Watson, P.C., L.L.O., for appellees.
Michael D. Matejka and Erin Ebeler Rolf, of Woods Aitken, L.L.P., for amicus curiae Nebraska Land Title Association.
HEAVICAN, C.J., MILLER-LERMAN, STACY, FUNKE, and PAPIK, JJ.
NATURE OF CASE
John Mai and MM NE LLC (collectively Mai) brought this action against Janice German and her company, Dawes County Abstract & Title, Inc. (collectively German), arising from title abstracting and issuing commitments and title insurance services German performed for a series of transactions from 1999 through 2012. The distriсt court for Dawes County found that Mai‘s amended complaint stated a single cause of action for professional negligence against German as an abstracter with several theories of recovery; the 2-year statute of limitations for professional negligence,
STATEMENT OF FACTS
Background.
In a series of five transactions from 1999 through 2012, Mai bought contiguous and connected parcels of real property located in Dawes County. Mai individually bought parcels in 1999, 2000, and 2009, and MM NE (the LLC), of which Mai is a member, bought the final parcel in 2012. In each transaction, Mai used the services of German. German had been a registered abstracter serving the area since 1982 and had been a title agent since the mid-1980s. German performed records searches for the parcels bought by Mai, but did not search the
Because the title commitments did not disclose any public access to the properties, Mai obtained private easements and spent over $100,000 to build a red rock driveway to access his properties.
Dispute Over Driveways.
In 2016, a dispute arose between Mai and owners of two neighboring properties about whether the driveway was a public county road or a private driveway. The neighbors wished to use the driveway to obtain access tо their properties and sought permits from Dawes County. After it determined that the paths the neighbors wished to use followed an open public road, the county granted driveway permits to both neighbors.
The county‘s decision was based in part on advice from German. In the course of her work on behalf of the county, German discovered a road petition filed in 1887 that purported to establish a public road crossing over Mai‘s properties. In late January or early February 2016, German gave Mai a copy of the 1887 road petition.
On October 17, 2016, Mai filed an action in the district court for Dawes County to quiet title against the neighbors and the county, disputing the grant of driveway access to the neighbors. As part of that litigation, Mai took German‘s deposition on November 20, 2017, and she testified regarding, inter alia, the 1887 road petition and the consequent establishment of a public road. Mai does not dispute that he was aware of the contents of this deposition. The district court determined that the county‘s claim of a public road was valid. The Nebraska Court of Appeals, in a memorandum opinion, affirmed the orders of the district court. Mai v. Lecher, No. A-21-731, 2022 WL 3205129 (Neb. App. Aug. 9, 2022) (selected for posting to court website). This court denied further review.
Mai filed the action that is the subject of the present appeal on August 30, 2019. Mai initially set forth a claim of negligence against German, alleging that he would not have constructed the driveway had German “reviewed the records, completed her agreed road study, and performed her duties as a registered abstracter in examining records and disclosing the existence of [the public road].” Mai later amended the complaint and alleged that at the time of the title commitments to Mai, German was aware of the possible existence of “ancient records” as to roads, failed to search such records, and included an exception to the title coverage for claims by the county related to public roads. The amended complaint specifically alleged that “German breached her duties owed to [Mai] in providing abstracting services of good faith and due care.”
German filed a motion for summary judgment, in which she asserted that Mai‘s complaint was barred by the 2-year statute of limitations for claims of professional negligence,
The court first determined that the amended complaint set forth a single cause of action for professional negligence with multiple theories of recovery. It determined that as a registered abstracter, German‘s services were “professional” under
Having determined that
Mai appeals.
ASSIGNMENT OF ERROR
Mai claims, summarized and restated, that the district court erred when it granted German‘s motion for summary judgment based on the 2-year statute of limitations for actions based on professional negligence under
STANDARDS OF REVIEW
[1] An appellate court affirms a lower court‘s grant of summary judgment if the pleadings and admitted evidence show that there is no genuine issue as to any material facts or as to the ultimate inferences that may be drawn from the facts and that the moving party is entitled to judgment аs a matter of law. Carrizales v. Creighton St. Joseph, 312 Neb. 296, 979 N.W.2d 81 (2022).
[2] An appellate court reviews the district court‘s grant of summary judgment de novo, viewing the record in the light most favorable to the nonmoving party and drawing all reasonable inferences in that party‘s favor. Id.
[3] The question of which statute of limitations applies is a question of law that an appellate court must decide independently of the conclusion reached by the trial court. Id.
ANALYSIS
Mai appeals the district court‘s decision which determined that his claims were time barred under the statute of limitations for actions based on professional negligence. He contends that German was not providing “professional” services and should not have benefited from the 2-year statute
Professional Negligence.
As an initial matter, we address the nature of Mai‘s action. The district court characterized the claims in the amended complaint as two theories of recovery based on the cause of action for professional negligence. We agree. Although Mai now claims that he asserted a variety of other theories, the gravamen of the amended complaint alleged, inter alia, that Mai had an “ongoing professional relationship” with German and that German “fail[ed] to perform her duties as a registered abstract[e]r in examining records and disclosing the existence” of possible claims of a public road. The amended complaint is grounded in statements referencing duties and claims of professional negligence that form the basis of each of Mai‘s stated theories of recovery, and the record of the summary judgment proceedings contains no material evidence of intentional wrongdoing. The district court correctly analyzed the claims as professional negligence arising from acts and omissions by German when she provided services to Mai related to the properties.
Mai‘s Claims Arise From German‘s Abstracting Services.
Having agreed with the district court that this case involves negligence, we next consider the nature of the services German provided. Specifically, we consider whether German‘s services under examination were those of an abstracter and, later in this opinion, whether such services are those of a “professional” subject to the statute of limitations for actions on professional negligence under
Mai claims that German acted merely as a title agent in her dealings with him and was not performing abstracting work.
[A] title insurance company which renders a title report and also issues a policy of title insurance has assumed two distinct duties. In rendering the title report the title insurance company serves as an abstracter of title and must list all matters of public record adversely affecting title to the real estate which is the subject of the title report. When a title insurance company fails to perform its duty to abstract title accurately, the title insurance company may be liable in tort for all damages proximately caused by such breach of duty.
The overlap in duties is reflected in the statutory duties found in Nebraska‘s Title Insurers Act, see
In this case, German testified to the nature of her abstracting work and the circumstances under which it was performed. As both a registered abstracter and a title insurance agent, she noted differences in the end products or reports for an abstract of title and a title insurance commitment. She explained that in both activities, the search of the records uses the same process,
In his argument, Mai now distances himself from the amended complaint which centered on German‘s activities as a registеred abstracter. Having examined the record, we agree with the district court that the evidence on summary judgment showed German performed title search duties for Mai in the manner of a registered abstracter and that there was no genuine issue of material fact on this question. Having examined the pleadings and evidence in the record in a light most favorable to Mai, we find no error in the determination by the district court to the effect that German‘s work as an abstracter forms the basis of this action.
Abstracters’ Performing Title Reports Rendеr “Professional Services” Under
Turning to the central legal issue in this appeal, Mai asks us to hold that registered abstracters’ abstracting title do not provide “professional services” within the ambit of
Section
Any action to recover damages based on alleged professional negligence or upon alleged breach of warranty in rendering or failure to render professional services shall be commenced within two years next after the alleged act or omission in rendering or failure to render professional services рroviding the basis for such action; Provided, if the cause of action is not discovered and could not be reasonably discovered within such two-year period, then the action may be commenced within one year from the date of such discovery or from the date
of discovery of facts which would reasonably lead to such discovery, whichever is earlier; and provided further, that in no event may any action be commenced to recover damages for professional negligence or breach of warranty in rendering or failure to render professional services more than ten years after the date of rendering or failure to render such professional service which provides the basis for the cause of action.
We have noted that the Legislature did not provide a general statutory definition of “professional” or state which occupations provide professional services. See Wehrer v. Dynamic Life Therapy & Wellness, 302 Neb. 1025, 926 N.W.2d 107 (2019).
[4,5] To determine whether the statute of limitations for professional negligence applies to a plaintiff‘s claim, a court determines whether the defendаnt is a professional and was acting in a professional capacity in rendering the services upon which the claim is based. Wehrer v. Dynamic Life Therapy & Wellness, supra. To determine whether a particular act or service is professional in nature, a court looks to the nature of the act or service itself and the circumstances under which it was performed. Id.
[6] As we explain, we conclude that abstracters’ performing title searches render “professional services” and that where, as here, negligence is alleged, they are subject to the limitations periods in
In Cooper v. Paap, 10 Neb. App. 243, 634 N.W.2d 266 (2001), the Court of Appeals concluded that abstracters are members of a profession and applied
Mai argues that Cooper is no longer a correct statement of the law because our decision in Wehrer v. Dynamic Life Therapy & Wellness, supra, emphasized that an occupation is a profession that benefits from
[7] Consolidating Nebraska cases, Wehrer explained that an occupation is not a “profession” unless the following elements are present: (1) The profession requires specialized knowledge; (2) the profession rеquires long and intensive preparation; (3) preparation must include instruction in skills and methods of the profession; (4) preparation must include scientific, historical, or scholarly principles underlying the skills and methods of the profession; (5) membership in a professional organization is required; (6) a professional organization or concerted opinion within an organization regulates and enforces standards for membership; (7) the standards for membership include high standards of achievement; (8) the standards for membership include high standards of сonduct; (9) its members are committed to continued study; (10) its members are committed to a specific kind of work; and (11) the specific kind of work has for its primary purpose the rendering of a public service.
The stated statutory purpose of the Act is “to safeguard the welfare and property of citizens of this state and to [e]nsure that abstracters serving the public meet minimum standards of proficiency and competency.”
The board approves “professional development” programs of continuing education, and a registered abstracter must complete credits every 2 years.
Section
A registered abstracter shall show each link in the chain of title, and failure to do so shall render him or her liable to any person injured by such omission. In adding
extensions to an old abstract, a registered abstracter shall not be deemed to certify to or verify accuracy of entries prior to the first date given in the certificate of extension. When a registered abstracter relies upon the numerical index alone to rеfer him or her to all entries upon the records affecting the title to property, such reliance shall be at his or her peril. A registered abstracter shall be liable for omission of notice of encumbrance in an abstract.
The Act also guards against conflicts of interest by restricting the practice of abstracters; for example, district and county judges cannot engage in the business of abstracting directly or indirectly while holding office.
The record in this case demonstrates the specialized knowledge and preparation required of an abstracter. German specifically described the specialized knowledge, often of a local nature, an abstracter possesses. She stated that records are not kept the same way in all counties and that abstracters must know how to locate the relevant records. She explained that an abstracter must be familiar with state marketable title standards and use them when conducting titlе searches. See
Our cases have long recognized that abstracters are members of a profession. In Heyd v. Chicago Title Ins. Co., 218 Neb. 296, 302-03, 354 N.W.2d 154, 158 (1984), citing several other jurisdictions, we said:
“The duty imposed upon an abstractor of title is a rigorous one: ‘An abstractor of title is hired because of his
professional skill, and when searching the public records on behalf of a client he must use the degree of care commensurate with that professional skill . . . the abstractor must report all matters which could affect his client‘s interests and which are readily discoverable from those public records ordinarily examined when a reasonably diligent title search is made.’ . . .”
(Emphasis supplied.) Abstracters must learn to conduct a proper and in-depth search and examination of the public records and to set forth in the abstract the facts which may relate to or affect the title under investigation. Cooper v. Paap, 10 Neb. App. 243, 634 N.W.2d 266 (2001). See 1 C.J.S. Abstracts of Title § 8 (2016). They must learn and understand the law relating to conveyances, descents, devises, and other matters affecting the title to real property and be able to determine what constitutes a lien or encumbrance. See Cooper v. Paap, supra. The foregoing is supported in our record by the affidavit of Mai‘s expert, Hahn, discussing the duties and standard of care of an abstraсter.
We have explained that a college degree requirement can indicate preparation and training for a profession, but is not required for an occupation to be a profession. Wehrer v. Dynamic Life Therapy & Wellness, 302 Neb. 1025, 926 N.W.2d 107 (2019); Bixenmann v. Dickinson Land Surveyors, 294 Neb. 407, 882 N.W.2d 910 (2016), modified on denial of rehearing 295 Neb. 40, 886 N.W.2d 277. Abstracters have been held as an example of a profession that does not necessarily require a college degree. Wehrer v. Dynamic Life Therapy & Wellness, supra.
Having applied the factors in Wehrer, we now reaffirm Cooper v. Paap, supra, which held that abstracters of title performing title searches perform professional services within the meaning of
Mai‘s Complaint Was Untimely.
[8,9] Having concluded that the limitations periods in
Even reviewing the evidence in the light most favorable to Mai, this action is time barred. The uncontroverted evidence indicates that Mai discovered the cause of action against German on or before November 30, 2017, the date upon which Mai deposed German in an earlier lawsuit regarding the facts surrounding the 1887 road petition. Since this case was not commenced until August 30, 2019, there is no genuine issue of material fact that this action is time barred.
CONCLUSION
We reaffirm that abstracters’ рerforming abstracting services are professionals for purposes of the 2-year statute of limitations in
CASSEL and FREUDENBERG, JJ., not participating.
AFFIRMED.