*1 disсiplinary alleging tion for al., Plaintiffs, Day PAIDAR, R. et
respondent Richard G. has committed Peter warranting public professional misconduct v. discipline, respondent namely, engaged HUGHES, E. Charles defendant and practice while for suspended of law third-party plaintiff, Appellant, nonpayment attorney registration of his status, and while CLE restricted fee file, failed return client’s failed Inc., Title, al., Guardian et Third- diligently pursue claims on behalf two Party Defendants, misrepresented clients and status clients, the matter of those and one Title National Insurance cоoperate disciplinary pro- failed to Company York, of New third- ceedings in violation of Minn. R. Prof. defendant, Respondent. party 1.15(c)(4), 4.1, 1.3, 1.16(d), 5.5, Conduct No. C6-98-2192. 8.1(a)(3) 8.4(c), Lawyers and Rules on (RLPR). Responsibility Professional Supreme Court Minnesota. Respondent admits his conduct violated 3, 2000. Aug. Conduct, the Rules of Professional waives Rehearing Sept. Denied 14, RLPR, rights pursuant to Rule a stipulation has entered into
Director they jointly wherein recommend appropriate discipline
that the 90-day is a
suspension with waiver of no the reinstate- hearing provided for in Rule parties
RLPR. The further agree re- compliance
instatement is conditioned on 26, RLPR, completion
with Rule successful the professional responsibility portion examination, bar satisfaction
continuing legal requirements. education
This court independently has reviewed file approves recom- jointly disposition.
mended
IT IS HEREBY ORDERED re- DayG.
spondent suspended Richard reinstatement, days with conditioned on agreed-upon terms set forth above.
Respondent pursu- pay shall costs $900
ant to Rule RLPR.
BY THE COURT: Page
Alan C.
Associate Justice *2 Marshall,
Joseph B. Marshall Asso- ciates, P.A., Pines, appellant. for Circle Beitz, Hagerty, A. Micahel C. James Johnson, Beitz, & Hagerty, Albrightson P.A., respondent. Minneapolis, OPINION LANCASTER, Justice.
This
of title action comes to
slander
summary judgment
appeal
us on
Title
respondent,
National
favor
(Fidеli
York
-of New
Company
Insurance
ty).
implicitly
held
district
cannot constitute
plead a
damages1 necessary to
Ap-
Court of
title action. The Minnesota
Phelps
Land Title
"Special damages
act.”
v. Commonwealth
are those
'are the
[that]
natural,
Co.,
(Minn
necessary and
inevitable
but not
275 n.
Ins.
”
occurrence,
wrongful act'
result of a
1995)
Dictionary
(quoting
Law
Black’s
.
natural,
“general damages whereas
ed.)).
(6th
wrongful
necessary and usual result of
Paidar
peals
Hughes,
security
affirmed. See
interest in the
to Fideli-
(Minn.
C6-98-2192,
National,
fact,
No.
sented to title search thе National had an revealed as- signment.3 interest the Forest Lake property-and When the Paidars learned of at Fidelity’s request conveyed encumbrance, National they a refused to close provides: ally, McCullough Section 633 of Companies, a Minne- and/or Partnership (collectively sota pecuniary publish- loss General for which a McCul- injurious subject lough), er of purchased falsehood to liabili- from Guardian certain ty is restricted to personal property items of located on the (a) pecuniary directly loss that results property, including shed and commercial immediately from the effect of the light poles. Hughes apparently was not a persons, including conduct of third im- party to the transaction between Guardian pairment vendibility or value caused McCullough. McCullough removed some disparagement, and light poles, or all of the commercial but did (b) expense reasonably of measures not remove the shed and some other items. publication, counteract February McCullough filed a docu- including litigation to remove the doubt containing lеgal description of the upon vendibility by dispar- cast or value purporting and a document to be the agement. purchase contract between Guardian and 3. The title also revealed search McCullough Washington encum- County, which by third-party McCullough. brance defendant represented McCullough had an interest 31, 1995, prior At some time March third- property. party McCullough defendant Robert individu- - requires showing removed. encumbrance was Minnesota until informally to ob- attempted slander of title actions. Wil- Hughes When assignment, 471], [35 a release Minn. tain son Dubois (Minn.1886). ato unless would submit refused fees incurred Legal being in an unrelated matter deposition are not pursue cause of action Fidelity and Holstad. litigated between showing recoverable .without Sys., Inc. Training Advanced 26, 1997, served notice On June Co., Inc., Equip. v. Caswell had declared on the Paidars Wilson at 69. null and void. purchase agreement Paidars’ unlawful de- then commenced an claims to have incurred over *4 evict against the Paidars to tainer action $20,000.00 pursue fees on the property. Trial them from is not claiming any special action. Hе on detainer action commenced unlawful damages Since special no (cid:127) 28, settlement was reached July alleged, been slander of have end of the trial. The settle- prior to the Fidelity’s action cannot proceed. title part provided pertinent agreement summary for must be judgment motion (1) agreement settlement would that: granted. at purchase agreement the new constitute determination, of this the court On review (2) the would take price; the same Paidars question did address title) (and eventually for deed the contract attorney special whether fees constitute (3) condition; the Pai- present its observing special damages. While defend, hold, and guarantee to dars would damages are a element any claims Hughes save harmless from action, the appeals specif- cause of court of Fidelity security interest. by made its that, ically “[a]ny found detainer then dis- The unlawful action was during litigation did not [the] amassed prejudice. missed on its merits ac- Fidelity’s arise as a 21, 1997, prior the trial on July On summary judgment. tions” and affirmed action, Paidars unlawful detainer declаratory judgment in a sued I. performance fraud and specific action for we an order for sum When review an- of the contract for deed. whether there mary judgment, examine complaint the Paidars’ and then swered material fact and genuine are issues of alia, named, third-party inter as a applica trial court erred its whether title action in both slander of defendant v. by Cooper of the law. See tion State an action to title. (Minn.1990). French, 2, 4 460 N.W.2d Fidelity, Hughes states that against may be considered Whether title any objections waived fоr a slander purposes of special Fidelity’s By interest. security, based on law. Our title action is 1997, 5, claims remaining all November Frost- review is therefore de novo. See re- the Paidars and were between Elec. Ass’n Pub. Utils. Benco Minnesota property and the was transferred. solved Comm’n, 639, However, re- the slander of title action mained, Hughes claiming refusal a slan The for elements security prop- interest to release claim are: der of title him to incur fees and erty caused (1) there false statement That was a judg- "summary moved costs. for сoncerning the owned real ment, claiming Hughes prove could plaintiff; damages required an action for special for (2) pub- false granted That the statement of title. district court slander others; motion, following: lished to stating the (3) That the false pub- statement was title maliciously;
lished Jr., action. See James 0. Pearson Annota- tion, What (4) Special Damages Constitutes That publication of the false Title, in Action Slander 4 A.L.R.4th statement concerning title to the 532, 560-62 & (Supp.1999). 92-93 plaintiff pecuni- caused the Professors Prosser and Keeton have ary noted loss in the form of special dam- the soundness of the policy contained in ages. the Restatement: “It would also appear Dubois, 471, See Wilson v. 472- obvious that damages include the 73, (1886); 29 N.W. 68-69 see also proceedings necessary to Kelly v. First State Bank Rothsay, 145 of 347, remove cloud on the plaintiffs 331, 332, Minn. 177 N.W. * * caused the [slander of title] W. filing of an instrument known to be al., Page Keeton et Prosser and Keeton on inoperative that, is a false statement if (5th Law Torts at 972 maliciously, done constitutes slander of ti- ed.1984). Minn, Only requires Texas proof of the tle. See Kеlly, 145 at particular loss of a sale to establish at 347. Lewis, damages. See Clark v. 684 S.W.2d Both and Fidelity agree that in *5 161, 164 (Tex.App.1984) (holding attorney Minnesota a requires title action fees not recoverable special damages as in a showing of special damages. Hughes slander of title action attorney because asserted to the district court that attorney loss); fees are not a pecuniary A.H. Belo fees necessary to clear title resulting from Sanders, Corp. v. 145, 632 S.W.2d 146 slander on the title special are (Tex.1982). Without expressly that аddressing asser- tion, the district granted summary In examining precedent, Minnesota judgment to Fidelity stating only that are adoption convinced that of the majority “Hughes has admitted he has suffered no rule is consistent with the common law in special in damages fact, this action.” In this state. We have adopted Restatement special admission on damages was (1939),4 § of Torts 914 which sets forth a simply that he suffered no loss attributable policy that substantially overlaps with the to a lost any damages sale or attributable one set forth in section 633. See Prior to anything оther than attorney fees. The Groth, Lake State Bank v. 495, district court apparently ruled based on 499-500, (1961). 619, 108 N.W.2d 622 In implicit assumption that attorney fees Bank, Prior Lake State we held attorney cannot special be in damages a slander of fees to be recoverable when litigation with title action. party third was the natural proxi- mate consequence of defendant’s tortious The issue of whether attorney (embezzlement bank). conduct from a Id. fees incurred to remove a cloud on title at 622-23. merely provides 633 constitute damages in a slаnder of for recovery litigation expenses when title action is one impression of first particular necessitated tort of tor- Minnesota. The clear majority of states tious slander of title. that hold, have considered this issue con (Second) sistent with the Restatement of We have also recovery allowed of attor- 633(l)(b) § (1977), Torts attorney ney fees fees similar actions where one par- (Second) (1977), of Torts 914 bringing defending his interests nearly language contains identical to section against person a third is entitled to 914 in the first provides: Restatement and compensation recover reasonable for loss of damages in a tort action do not time, attorney expenditures fees and other ordinarily compensation include for attor- thereby suffered or incurred in the earlier ney litigation. fees or other action. (2) One through who the tort of another required has been protection to act in the context, Hughes in this special damages litigation ty”s conduct necessitated tortious Fidelity’s Re claim fail actions party. In Tarnowski v. must because by the other 33, 801, 39-40, attorney to incur Minn. did cause sop, 236 > (1952), recovery attorney sued Specifically, we allowed fees. litigation party with a third from to cancel Hughes attempted after directly traceable litigation purchase agreement-nob when as a result n representations false security to the defendant’s Fidelity’s refusal to release its sale. We about a business for interest. The district did not ad- have.also recovera concluded argument, simply dress this causation but prose ble as malicious allege held that did not because See, Davies, v. e.g., cases. Mitchell cution In he could recover. 363, contrast, Minn. appeals proceeded court of issue-agreeing the causation determine Co., Inc., Okay v. In Hill Constr. any attorney fees did 107, 121(1977), 324, 347, 252 Minn. N.W.2d not arise as a fees were recovera we held actions. third litigation party with a ble when Hill, attorney’s negli necessary. generally question Causation is gent representation forced his clients only fact left the finder of fact that against outside credi defend themselves becomes a of law “where different question recovery Id. We allowed tors. reasonably only at one minds can arrive those costs negligent Scnei, Inc., 262 N.W.2d Lyons result.” defending against his clients incurred See the creditors. id. actions whether *6 recovery attorney of hold that the We in this Hughes litigate some all issues here, at issue the conduct fees for tortious question signifi a property dispute is title, is in accordance with our slander of question in kind the cantly different at precedent. special issue attorney’s “would negligence an whether the those alleged are not same' as here attorney in an have made a difference” Dubois, we stated that: Wilson v. where Merchants malpractice claim. Admiral thing disparaged of a loss sale of Where Hannan, Freight v. O’Connor & Motor special claimed and on as dam- is relied We N.W.2d disparagement, it ages occasioned the attorney question the leave causation allege and show a indispensable is for the Rouse malpractice jury. claim See person, particular loss of sale some Bennett, P.A., 520 N.W.2d Dunkley & particular of a to some for the loss sale Admiral, (Minn.1994); special dаmage, and of the person is leave Similarly, should N.W.2d at 267. we and substance of the action. gist causation here question the fact-based Hughes at at 69. sum to decide whether the district court a of sale” his not claim “loss as does appropriate. gener See mary judgment is fees damages; attorney he claims special Herreid, 337, 339 ally Nord v. N.W.2d damages. Hughes fact that his as (Minn.1981) court’s (noting that a district at ultimately was able to sell is summary judgment proper function on prevent should not him from issue here solely to of fact but not “to decide issues if he recovering attorney his fees can show of fact there an issue determine whether is incurred them as a necessarily that he (citation omitted)). to be tried” tortious actions. direct result of cau- Indeed, if the determination of even
II. issue, factual purely sation here were not court, markedly more which the district is that even if argues history of this familiar with the attorney fees constitute court holds . First,
than is clear appellate particularly points. record does not determining whether well-suited to the le- show a appellant cleаr nexus between gal actions took can be traced to alleged E. Hughes’ attorney Charles fees Fidelity’s conduct.5 Because the district any attempt causation, court did not decide issue of clear title to the real (Property). we remand for that determination.6 Further, the record demonstrates in assuming
The district court erred
that Hughes
prima
has not made even a
facie
attorney
special
be
damages.
fees cannot
showing that
title
quiet
his
and slander
Because that was
sole basis on
which it
against Fidelity
title claims
National Title
ruled,
appeals’
we reverse the court of
(Fideli-
Insurance
Company New York
summary
affirmance of
judgment
and ty)
and necessary
were the direct
conse-
remand for
proceedings
further
quence
Accordingly,
actions.
opinion
this
to determine whether
woefully
presenting
case falls
short of
attorney
or all
alleged
of the
fees
by a
within
proper context
which
adopt
were
direct
rule on
may
whether
consti-
pursuant
title
to the slander
Therefore,
special damages.
tute
of title action.
should
improvidently
either dismiss as
Reversed and remanded.
or,
alternative,
granted
affirm
grant
summary judg-
district court’s
ANDERSON,
(dis-
PAUL H.
Justice
ment.
senting).
Both
agree
that a
I respectfully
We have
pre-
dissent.
pecuniary
loss is
viously
whether,
slander
answered the
title,
in an
action for
action.
concedes that
he sus-
legal expenses
fees and other
pecuniary
incurred in tained no
loss in
the form
clearing title
are recoverable as
other than his
damages.
important
This
question,
legal expenses
and other
incurred
deserving an
But
majority
answer.
Paidars,
prior litigation
his
but he
essentiаlly
has
the cart
put
before the
claims that
these are
by adopting
horse
633 in
its entire-
claim,
support of
asserts that
*7
ty in the context of facts that do not
nationally
clear
years
trend
in recent
has
present the issue it
to
seeks
decide.
been
that
recognize
to
fees and
thorough
legal
other
in
expenses
clearing
examination of the
incurred
facts and
procedural history of this case
disparaged
makes two
title are
recoverable as
Co.,
Printing
5. The
dissent claims
"the unlawful de-
ston Times
283 purchase, law slan- less desirable for lease or oth- in action of. the common Rorvig dealings they actually er than are. But specifically title. He cites der of 492, liability 873 P.2d Douglas, Wash.2d the does1 accrue until the (1994), He argument. support to publication disparaging the matter sup- that the Restatement further asserts as a deter- operates substantial factor ex- recovery litigation allowing ports mining the a prospective decision of slander of title- action penses persons, or interested to purchaser other 633 of Re- urges adopt thаt we Section buying or otherwise ac- refrain from (Second) of Torts. statement the causes quiring thing question, or expense to the oumer incur the such Hughes’ emphasis Fidelity asserts that may be legal proceedings as available or misplaced. It claims on Section upon to remove the cloud the the adopt even were Section 633 vendibility upon is cast it the Restatement, would enti- not be publication. litiga- the recovery prior because tled incurred a di- tion were not added). (emphasis Id. Fidelity’s conduct. rect (1) Hughes’ prior litigation the involved Thus, key question becomes whether brought unlawful action detainer legal expenses and other evicted, Paidars have the during by Hughes prior litiga- incurred declaratory judgment the Paidars’ were a conse- tion with Paidars direct brought one before the trial of week Fidelity as- conduct. quence Hughes’ unlawful detainer that the record does not demonstrate serts sought specific perfor- which Paidars initial, unilateral action mance of the For purchase agreement. evict Paidars recover, Fidelity’s conduct relinquish by Fidelity’s сaused refusal to must be immediate direct Property. claims on If action, but cause of the unlawful detainer did necessitate conduct the unlawful detainer action is unrelated Paidars, removing any impairment of vendibili- legal expenses are not recoverable. other of a ty. There is even less connection Goward, Stickney v. See Pai- Fidelity’s conduct and the between 459-60, N.W. performance In this specific dars’ action. to the specifically relates action, sought spe- in essence loss for recovery pecuniаry “impairment purchase agree- performance cific vendibility by dispar- value caused that, end, they performed. agement” expense and the of measures (cid:127) 'specif- It was not until after the Paidars’ reasonably necessary to the doubt “remove *8 action was filed and settled performance ic upon vendibility by dispar- or value cast to the Hughes sought “quiet to title” (Second) agement.” Restatement of Torts did not commence his Property 633(l)(a)-(b) (1977). § For there- to be days after August action until recovery, there must be causation. court, Paidars, in open on record the the to Here the comments Section 632 any filing. objection to waived injurious helpful. The title action was not point, At this the a must be substantial factor statement preserve to deal or the ven- this about loss. See Restatement brings the the dibility property. of (Second) Torts, of cmt. b part of the comment to Section Further, relevant to the Paidars did not seek as rather, 632 reads follows: purchase agreement;- rescind land, to en- trying get were vendibility they Thus the chattels It agreement. intangible things may impaired purchase force the be by of his unlawful detainer appear Hughes, a makes virtue when statement them action, I purchase to rescind the have one further with respect who wanted concern made agreement nearly after to the action taken This majority. $50,000 improvements the property. case a arises context of cloud on title By by Hughes this action time to real But property. Section 633 is much brought, guaranteed the Paidars had applies broader and of an publication defend, hold, they save would injurious falsehood that affects the vendi- any harmless from claims made Fideli- bility product or value of a context. ty. prior The with re- majority While the only addresses Section spect to the Paidars that seeks to 633 in context of of title recover were not the direct conse- against property, it limit real does so Rather, quence conduct. holding. Consequently, adopt its litigation expenses these were conse- section in a case where the facts do not quence of detainer Hughes’ unlawful exists, liability demonstrate that eject the Paidars from the advisory what an opinion, adopts is they after had made significant improve- new rule in context that provides no ments. The record on face fails its clear application boundaries for future support claim if we even were to the rule. adopt 633. Section I would dismiss review of this matter as require We should at least some prima or, improvidently granted alternatively, af-
facie of' a showing legal causation for the firm the decision the lower court. alleged special damages adopt before we stаtement the law 633’s STRINGER, (dissenting). Justice remand to district court for reconsider- ation. I conclude the court prop- district I join in the dissent of Justice Paul H. erly granted Fidelity’s summary judgment Anderson. motion and the court of appeals properly may affirmed. The district court have GILBERT, (dissenting). Justice analysis
based on majority what the perceives to be erroneous conclusion of join I in the dissent of Justice Paul H. law; however, supports the record the Anderson. regardless
court’s the propriety decision
of that conclusion. We do not issue advi- facts;
sory opinions hypothetical on rath-
er, we regarding make conclusions of law
the facts present given case. The
majority’s holding today essentially is
advisory opinion.1 majority compounds binding its misunderstand- the lower courts this state. ing by claiming today, of this case its decision case before us the court of accord with our earlier decision in never Moreno reached fees as Co., Printing special damages. Times Crookston N.W.2d It affirmed the district causation, ignores majority concluding court on the issue of as do, key support difference between I record simply obvious these two that the does not Crookston, *9 any cases. we remanded after the claims that this misapplied by Fidelity’s district court correct If caused actions. the district reversed, standard the court court's statement of law incorrect, matter incorrectly stating binding the law the fair and is not it on other court reporting privilege. compel accurate Id. at 334. We and does not review in the same man adoption discussing remanded to the district court after ner. The rule of a new of law that, reversing proven, if sup correct standard and should be based on facts See, appeals. port Stores, e.g., court of See id. Remand in Crook- that rule. Lake Wal-Mart Inc., (Minn. ston after we had corrected the 1998). holding appeals, holding of the court of