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Mortensen v. Stewart Title Guaranty Co.

July 1, 2010

VERNON JERRY MORTENSEN, PLAINTIFF/APPELLANT,
v.
STEWART TITLE GUARANTY COMPANY, DEFENDANT/RESPONDENT.



Appeal from the District Court of the First Judicial District of the State of Idaho, Kootenai County. Hon. Lansing L. Haynes, District Judge.

The opinion of the court was delivered by: W. Jones, Justice

2010 Opinion No. 77

SUBSTITUTE OPINION. THE COURT'S PRIOR OPINION DATED APRIL 26, 2010 IS HEREBY WITHDRAWN.

The decision of the district court is affirmed.

I. NATURE OF THE CASE

Vernon J. Mortensen appeals the district court's decision granting summary judgment to Stewart Title Guaranty Company in his action for breach of contract and intentional infliction of emotional distress. Mortensen claims that he is entitled to relief for Stewart Title Guaranty Company's failure to defend the appeal in his suit to secure an easement running over an access road to his property.

II. FACTUAL AND PROCEDURAL BACKGROUND

Vernon J. Mortensen, appellant, owns a parcel of land near Coeur d'Alene, Idaho, for which he purchased title insurance from Stewart Title Guaranty Company ("Stewart Title"), respondent. The policy insured both title and access to the property. Mortensen's parcel connects to a county highway via a primitive access road that runs over properties belonging to Dennis and Sherrie Akers. When Mortensen acquired his land in 1994, part, but not all, of this access road was subject to an express easement in favor of Mortensen's estate.

In 1982, the Akerses built an improved curved driveway on their land from the county highway to the access road, shortcutting a pre-existing sharp turn in the access road. They had been permitting Mortensen to access his parcel via the curved driveway and the access road, but did not want the road to be widened or improved. In November of 2001, Mortensen sent a letter to Stewart Title demanding that it act to ensure access to his property, as he was planning on selling a portion of his parcel to David L. White, a business partner, and his wife Michelle. White and Mortensen apparently sought to subdivide their parcels into a housing development and needed to widen the access road to do so. Sometime thereafter in late 2001, a Stewart Title representative contacted the Akerses and requested that they quitclaim the portion of their property not subject to the express easement so that Mortensen could access his land. The Akerses declined the request. Nonetheless, on or about January 3, 2002, White and Mortensen entered onto the Akerses' curved driveway, bulldozed a gate, and began excavating the road. Roughly a week later, the Akerses sued the Mortensens and the Whites for trespass, negligence, and to quiet title. Stewart Title provided counsel to Mortensen during the ensuing bench trial and, due to the difficulty in separating all the causes of action, defended him not just in the quiet-title claim, but on the tort claims as well. After seven total days of trial, the district court found the Whites and Mortensens jointly liable for $10,000 in compensatory damages for emotional distress and treble trespass damages of $51,000. It also found Mortensen individually liable for $150,000 in punitive damages.

This Court has twice heard appeals in the Akers case. Akers v. D.L. White Constr., 142 Idaho 293, 127 P.3d 196 (2005) ("Akers I"); Akers v. Mortensen, 147 Idaho 39, 205 P.3d 1175 (2009) ("Akers II"). In the most recent ruling, this Court affirmed the trial court's finding that a prescriptive easement 12.2 feet wide permits Mortensen to reach his property over the access road, but remanded for further fact finding on the exact location of the easement and for a redetermination of damages. Akers II, 147 Idaho at 44, 48, 205 P.3d at 1180, 1184. The lower court's decision on remand is still pending.

During Mrs. Akers' testimony at trial, Mortensen learned for the first time that Stewart Title had requested the quitclaim deed from the Akerses without first notifying Mortensen.

Additionally, while the lawsuit was pending, Stewart Title conveyed to White and Mortensen a quitclaim deed from Kathryn Baker, the Akerses' predecessor in interest, for the triangular piece of land containing both the access road's entry point onto the highway and the Akerses' curved driveway. Mortensen and the Whites then apparently improved this parcel by attempting to develop the access road. However, this Court has since upheld the district court's ruling that the triangular parcel actually belongs to the Akerses. Akers I, 142 Idaho at 203, 127 P.3d at 300. Last, again during trial, Stewart Title represented to Mortensen that it would pursue his appeal, but after Mortensen's motion to reconsider was denied, Stewart Title opted instead to pay Mortensen the full limit of the title-insurance policy and terminate representation.

On July 2, 2007, Mortensen sued Stewart Title for fraud, breach of contract, and emotional distress, among other claims. Mortensen also raised a claim for quasi-estoppel during the hearing on Stewart Title's motion for summary judgment. The district court granted summary judgment to Stewart Title, finding that Stewart Title did not breach any of the contract terms, that there was no factual issue as to his quasi-estoppel claim, and that the emotional-distress claim was time-barred under I.C. § 5-219. The court also awarded $25,000 in attorney fees to Stewart Title. Mortensen argues on appeal that Stewart Title breached its contractual duty to act diligently and in good faith by notifying the Akerses that they might have a valid quiet-title claim against Mortensen and by incorrectly representing to him that he owned the triangular piece of land containing the access road's entry point onto the highway. Mortensen also contends that Stewart Title breached its contract by refusing to provide counsel for him on appeal in the Akers litigation, and that even if it did not breach its contract, it was estopped from abandoning the appeal. He last contends that his emotional-distress claim was not time-barred and that Stewart Title was not entitled to attorney fees. Stewart Title responds that it was permitted under the contract to take any reasonable actions to ensure that Mortensen could access his land and that it was also permitted to terminate his representation by paying the limit of the insurance policy.

III. ISSUES ON APPEAL

1. Whether Stewart Title breached the insurance policy by paying the limit of the policy rather than representing Mortensen on appeal in the Akers litigation.

2. Whether Stewart Title could refuse to represent Mortensen on appeal in the Akers litigation under the doctrine of quasi-estoppel.

3. Whether Stewart Title was in breach for failing to act diligently when it attempted to obtain quitclaim deeds for portions of the access road.

4. Whether the district court correctly granted summary judgment to Stewart Title on Mortensen's claim for emotional distress.

5. Whether the district court properly awarded attorney fees to Stewart Title.

6. Whether Stewart Title is entitled to attorney fees on appeal.

IV. STANDARD OF REVIEW

When reviewing a grant of summary judgment, this Court applies the same standard of review used by the district court in ruling on the motion. Vreeken v. Lockwood Eng'g, 148 Idaho 89, ---, 218 P.3d 1150, 1162 (2009). Summary judgment is appropriate where "the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." I.R.C.P. 56(c). The movant carries the burden of showing that no genuine issues of material fact exist. Losee v. Idaho Co., 148 Idaho 219, ---, 220 P.3d 575, 578 (2009). "[A]ll allegations of fact in the record, and all reasonable inferences from the record are construed in the light most favorable to the party opposing the motion." Hei v. Holzer, 139 Idaho 81, 85, 73 P.3d 94, 98 ...


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