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Cummings v. Stephens

Supreme Court of Idaho

September 19, 2014

STEVEN B. CUMMINGS, Plaintiff-Appellant,
v.
ROGER L. STEPHENS, Defendant-Respondent, and NORTHERN TITLE COMPANY OF IDAHO, INC., an Idaho corporation, Defendant-Respondent-Cross Appellant

2014 Opinion No. 95.

As Amended January 20, 2015.

Page 282

[Copyrighted Material Omitted]

Page 283

Appeal from the District Court of the Sixth Judicial District of the State of Idaho, in and for Bear Lake County. Hon. David C. Nye, District Judge.

The judgment of the district court is affirmed in part and reversed in part.

Nathan M. Olsen, Petersen Moss Hall & Olsen, Idaho Falls, argued for appellant.

Randall C. Budge, Racine Olson Nye Budge & Bailey, Pocatello, argued for respondent Roger L. Stephens.

Aaron K. Bergman, Bearnson & Caldwell, Logan, Utah, argued for respondent Northern Title Company of Idaho, Inc.

EISMANN, Justice. Chief Justice BURDICK, Justice HORTON and Justice Pro Tem WALTERS CONCUR. J. JONES, Justice, concurring in part and dissenting in part.

OPINION

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[157 Idaho 351] EISMANN, Justice.

This is an appeal out of Bear Lake County from a judgment denying the buyer of real property an award of damages against the seller and awarding the buyer a judgment against a title company that prepared an inaccurate legal description of the real property. We affirm the denial of damages against the seller and reverse the award of damages against the title company.

I.

Factual Background.

In 2007, Roger and Barbara Stephens owned a parcel of real property consisting of about 270 acres on the west side of the highway and another parcel consisting of about 83 acres on the east side of the highway. They held title to the property as trustees for the Roger L. and Barbara L. Stephens Family Trust. In early 2007, they engaged a realtor to sell the parcel on the west side of the highway. The realtor asked Northern Title Company of Idaho, Inc., (Northern Title) to begin the initial title work for a sale of the property, including preparing a legal description for the sale of the parcel on the west side of the highway.

While driving down the highway on July 22, 2007, Stephen B. Cummings noticed a " For Sale" sign on the Stephenses' property. The sign included the realtor's contact information, and, upon contacting the realtor, Mr. Cummings learned that the property was under contract to be sold.

The following day, Mr. Cummings was being shown other properties by another realtor, who also showed him the Stephenses' property. He then learned that the contract purchaser was Three Bar Ranches, Inc., and that the purchase price was $800,000. Mr. Cummings had the realtor contact Three Bar Ranches, and it stated that it would assign the real estate contract to Mr. Cummings for

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[157 Idaho 352] $50,000. On July 26, 2007, the realtor faxed Mr. Cummings a copy of the real estate contract and a copy of the commitment for title insurance issued in connection with the transaction. The legal description in both documents included the Stephenses' property on both sides of the highway and two additional parcels they did not own. Based upon the legal description in those documents, Mr. Cummings believed that the property being sold included both parcels of the Stephenses' property. He intended to develop the property on the east side of the highway into a recreational vehicle park, to later develop some of it into view lots, and to continue using the land on the west side of the property for agricultural purposes.

On July 30, 2007, Mr. Cummings signed an agreement to pay Three Bar Ranches the sum of $50,000 for an assignment of its interest under the real estate contract with the Stephenses. Three Bar Ranches executed the assignment agreement on August 1, 2007. In the interim, Northern Title discovered on July 31, 2007, that the legal description it had prepared for use in the real estate contract signed by Three Bar Ranches and its title commitment for that transaction erroneously included the Stephenses' real property located east of the highway and two parcels of land they did not own. The legal description consisted of five paragraphs, each describing a separate parcel of real property. In an effort to correct that error, Northern Title created a revised legal description by inserting between the first and second paragraphs the words, " Except all of that portion of the following described land lying easterly of U.S. Highway 30." That change excluded the two parcels of property not owned by the Stephenses, but it did not exclude their land lying east of the highway because it was described in the first paragraph.

The real estate transaction between the Stephenses, as trustees of the Roger L. and Barbara L. Stevens Family Trust, and Mr. Cummings closed on August 3, 2007. On the same date, Northern Title recorded a warranty deed (Original Deed) granting to Mr. Cummings the real property described in the revised legal description, which was attached to the deed as Exhibit A. The legal description included the Stephenses' property on the east side of the highway.

On November 8, 2007, Mr. Stephens went to the county courthouse to pay the real estate taxes on the 83 acres of land east of the highway. He was informed that he no longer owned that property. He called the manager of the Northern Title office from the courthouse and told her that the legal description on the Original Deed was incorrect and that it included his land east of the highway. He then went to the Northern Title office and reiterated the problem.

The manager called the title officer, who had made the mistake, and the president of the Idaho offices of Northern Title. Northern Title still had the Original Deed with the recording information stamped on it. After being stamped with the recording information, the county recorder's office had scanned the deed for its records and returned the original to Northern Title. The title officer told the manager to correct the problem by altering the Deed and re-recording it. The manager then altered the Original Deed by typing " RE-RECORDED TO CORRECT LEGAL" on the face of the Deed and " THE FOLLOWING PARCELS ARE CONVEYED EXCEPTING THEREFROM ANY PORTION LYING EASTERLY OF U.S. HIGHWAY 30" above the legal descriptions on Exhibit A so that the exclusion applied to all five of the legal descriptions. She also crossed out the similar language that had been typed between the first and second paragraphs when it had ineffectually revised the legal description on July 31, 2007. She then re-recorded the deed (Correction Deed) on November 8, 2007. Before taking these actions, she attempted unsuccessfully to contact Mr. Cummings by telephone. Mr. Stephens did not participate in the modification of the Original Deed. On November 8, 2007, Northern Title sent Mr. Cummings a policy of title insurance that insured only the property lying on the west side of the highway.

On July 29, 2009, Mr. Cummings filed this action against Mr. Stephens. He answered, denying Mr. Cummings's claims, and filed a third-party claim against Northern Title. He later dropped his third-party claim in

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[157 Idaho 353] exchange for Northern Title agreeing to indemnify him from any losses.[1]

Mr. Stephens filed a motion for summary judgment, contending that there was a mutual mistake or a unilateral mistake in the legal description of the real property being sold. The district court held that there was a genuine issue of fact regarding mutual mistake, but it granted the motion on the ground that the undisputed evidence showed a unilateral mistake. One of the realtors had filed an affidavit stating that prior to the sale he had told Mr. Cummings that only the land west of the highway was being sold, and Mr. Cummings did not deny that fact. The court stated:

The undisputed facts, and reasonable inferences drawn from those facts, make it clear that Stephens intended to sale [sic] only land west of the highway, that Stephens did not know the warranty deed included land east of the highway, that Cummings knew that Stephens had no intent to include land east of the highway and that Cummings knew that the deed included land east of the highway. This is a unilateral mistake for which reformation is appropriate.

Mr. Cummings filed a motion for reconsideration that was supported by the affidavit of an officer of Three Bar Ranches. He stated that before Three Bar Ranches contracted to purchase the property, the same realtor had stated that the entire property on both sides of the highway was being sold. Based upon that affidavit, the district court granted the motion for reconsideration, holding that there was a genuine issue of material fact as to what Mr. Cummings had been told.

On January 4, 2011, Mr. Cummings filed his second amended complaint adding Northern Title as a defendant and alleging nine claims for relief. He alleged that by recording the Correction Deed, Mr. Stephens and Northern Title breached the warranties of title in the Original Deed, converted the 83 acres lying east of the highway, and slandered Mr. Cummings's title to the real property. He alleged that by its conduct, Northern Title breached the escrow agreement, breached the Idaho Escrow Act, breached its duty of good faith and fair dealing, committed negligence or gross negligence, and breached the policy of title insurance.[2] Finally, he alleged that both Mr. Stephens and Northern Title caused him emotional distress.

The matter was tried to the district court. At the conclusion of Mr. Cummings's case in chief, the district court granted Mr. Stephens's motion for involuntary dismissal as to all of the claims against him. After the conclusion of the trial, the court permitted Mr. Cummings and Northern Title to submit briefing. On January 22, 2013, the court issued its written findings of fact and conclusions of law. It denied all of Mr. Cummings's claims against Northern Title except one. It found that Northern Title acted negligently as a title and abstract company, and it awarded Mr. Cummings damages in the sum of $50,000, which was the sum he had paid to Three Bar Ranches to obtain an assignment of its contract to purchase the Stephenses' property. The court awarded Mr. Stephens costs and attorney fees against Mr. Cummings, and it awarded Mr. Cummings costs and attorney fees against Northern Title. Mr. Cummings appealed and Northern Title cross-appealed.

II.

Did the District Court Err in Dismissing Mr. Cummings's Claims Against Mr. Stephens?

This case was tried based upon the claims asserted in Mr. Cummings's second amended complaint. With respect to Mr. Stephens, Mr. Cummings did not allege a claim for quiet title to the 83 acres on the east side of the highway, a claim to void the Correction Deed, or a claim to rescind the real estate transaction. Instead, he alleged that Mr. Stephens had breached the warranties in the

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[157 Idaho 354] Original Deed by altering and recording the Correction Deed; that he had converted the 83 acres by executing the Correction Deed; that he had slandered Mr. Cummings's title by recording the Correction Deed; and that by his conduct he had inflicted emotional distress upon Mr. Cummings.

At the conclusion of Mr. Cummings's presentation of his evidence, Mr. Stephens moved for an involuntary dismissal on the ground that Mr. Cummings had not proved any of his claims against Mr. Stephens. Mr. Cummings admitted that there was insufficient evidence to support the claim against Mr. Stephens for intentional infliction of emotional distress, and he stated that he had no objection to the dismissal of that claim. With respect to the other three claims, he argued that Mr. Stephens was liable because he had contacted Northern Title about the error in the legal description and his doing so precipitated Northern Title's conduct in altering the Original Deed into the Correction Deed and recording it on November 7, 2007. He also argued the court should infer that Mr. Stephens asked Northern Title to take such action. The undisputed testimony was that Mr. Stephens did not participate in the modification of the Original Deed, and there was no evidence that he had asked Northern Title to take such action or that he even knew that it intended to take such action. The district court granted the motion for an involuntary dismissal on the ground that there was no evidence that Mr. Stephens altered the deed and that if any party is liable, it is Northern Title.

a. Did the trial court make adequate findings of fact?

When a trial court grants a motion for an involuntary dismissal at the conclusion of the plaintiff's presentation of evidence, the court must make findings as provided in Rule 52(a) of the Idaho Rules of Civil Procedure. I.R.C.P. 41(b). Rule 52(a) provides, " In all actions tried upon the facts without a jury or with an advisory jury, the court shall find the facts specially and state separately its conclusions of law thereon and direct the entry of the appropriate judgment . . . ." In this case, the district court orally stated its findings on the record.

Relying upon Powers v. Tiegs, 108 Idaho 4, 696 P.2d 855 (1985), Mr. Cummings contends that the district court's oral statement as to its findings is insufficient. In Powers, the trial court granted a motion for involuntary dismissal under Rule 41(b). This Court characterized it as follows, " In a one paragraph order the trial court found 'that plaintiff was at least contributorily negligent to the degree of 50 percent in the causation of injuries sustained . . . .'?" Id. In stating that the trial court's order did not comply with Rule 52(a)'s requirement of findings of fact and conclusions of law, the Court stated:

" Compliance with the rule of writing out specific findings and legal conclusions . . . is a salutary practice which requires the trial court to give full consideration to the entire record as the purported justification for its own announced ruling." " Bench remarks . . . do not substitute for nor rise to the dignity of written findings of fact and conclusions of law . . . ."
In this case, the trial court's findings of fact and conclusions of law were embodied in a single paragraph. Such cursory treatment does not satisfy the requirements of I.R.C.P. 41(b) and 52(a), making appellate review virtually impossible.

Id. at 5, 696 P.2d at 856 (quoting Sorenson v. Adams, 98 Idaho 708, 712-13, 571 P.2d 769, 773-74 (1977)). The language in Sorenson would appear to require written findings of fact and conclusions of law. The Court quoted the trial court's written order, which did not include any findings of fact; stated that the trial court did not make the required findings; and explained, to provide guidance on remand, how the Court's view of the evidence differed from the trial court's oral statements.[3]

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[157 Idaho 355] Rule 52(a) requires that the trial court " find the facts specially and state separately its conclusions of law thereon." I.R.C.P. 52(a). The rule does not require that the findings of fact and conclusions of law be in writing. Therefore, we overrule Powers and Sorenson to the extent that they indicate that the findings of fact and conclusions of law must be in writing.

Mr. Cummings also argues that the district judge's oral findings are inadequate in that they constituted a single, cursory paragraph. The trial court has the responsibility of ascertaining the facts. Compton v. Gilmore, 98 Idaho 190, 193, 560 P.2d 861, 864 (1977). The purpose of Rule 52(a) is to require the trial court to clearly set forth its findings of fact and conclusions of law so that it can be satisfied that it has fully and properly addressed all of the issues necessary for its decision and so that the parties, and the appellate court if there is an appeal, can be fully informed as to the bases of the trial court's decision. Id. at 194, 560 P.2d at 865.

The extent of the findings of fact and conclusions of law necessary for meaningful appellate review depends upon the nature of the issue to be decided by the trial court. Browning v. Ringel, 134 Idaho 6, 16, 995 P.2d 351, 361 (2000). In this case, the crux of Mr. Cummings's claims against Mr. Stephens was that he had altered the Original Deed into the Correction Deed and had then recorded the Correction Deed. In its oral pronouncement, the district court found that there was no evidence that Mr. Stephens had done so and that absent such evidence there was no basis for holding him liable. The court's finding and conclusion sufficiently addressed that issue.

b. Did the district court err in granting the motion for involuntary dismissal?

" [W]hen a defendant moves for an involuntary dismissal at the close of the plaintiff's presentation in a non-jury case, the court sits as a trier of fact and is not required to construe all evidence and inferences to be drawn therefrom in the light most favorable to the plaintiff." Keenan v. Brooks, 100 Idaho 823, 825, 606 P.2d 473, 475 (1980). The trial court " is to weigh the evidence, resolve any conflicts in it, and decide for itself where the preponderance lies." Id. A trial court's findings of fact will not be set aside on appeal unless they are clearly erroneous. Camp v. East Fork Ditch Co., Ltd., 137 Idaho 850, 856, 55 P.3d 304, 310 (2002); I.R.C.P. 52(a). " When deciding whether findings of fact are clearly erroneous, this Court does not substitute its view of the facts for that of the trial court. It is the province of the trial court to weigh conflicting evidence and to judge the credibility of witnesses." Miller v. St. Alphonsus Reg'l Med. Ctr., Inc., 139 Idaho 825, 832, 87 P.3d 934, 941 (2004) (citation omitted). " Factual findings are not clearly erroneous if they are supported by substantial and competent evidence, which is evidence that a reasonable trier of fact could accept and rely upon in determining that such facts had been proved." VanderWal v. Albar, Inc., 154 Idaho 816, 821, 303 P.3d 175, 180 (2013).

In order to prove that Mr. Stephens created and recorded the Correction Deed, Mr. Cummings only offered the testimony of the manager of Northern Title. She stated that she altered the Original Deed into the Correction Deed after discussing the matter with the title officer, who had made the error, and the regional president of Northern Title. The title officer assured the manager that she should change the header above the warranty

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[157 Idaho 356] deed to read " re-recorded to correct the legal" and place the exclusionary language at the very top of the legal description. The manager testified that after unsuccessfully attempting to contact Mr. Cummings by telephone, she made those changes to the Original Deed, went to the courthouse, and re-recorded it.

The manager also testified that Mr. Stephens did not participate in the modification. In fact, there was no evidence that he was even present when those changes were made or knew that they were to be made. His only conduct to which the manager testified was that he informed her of the error in the legal description. There was no other testimony or evidence as to his conduct in connection with the modification of the Original Deed and re-recording it as the Correction Deed. The recorder's stamp shows that it was re-recorded at the request of Northern Title. The evidence was sufficient for the district court to find that Mr. Cummings had failed to prove his claims against Mr. Stephens.

On appeal, Mr. Cummings argues that " this ruling was made without any actual testimony from Roger Stephens, and without the testimony from any of the realtors." A motion for involuntary dismissal can be made " [a]fter the plaintiff, in an action tried by the court without a jury, has completed the presentation of the plaintiff's evidence." I.R.C.P. 41(b). Before resting, Mr. Cummings did not call either Mr. Stephens or the realtors to testify. The court can decide the motion based upon the evidence presented during the plaintiff's case in chief.

c. Did the district court err in failing to uphold the Original Deed?

Mr. Cummings argues on appeal that the district court erred in failing to uphold the Original Deed. He argues that the Original Deed unambiguously conveyed to him the Stephenses' property located on both sides of the highway; that Mr. Stephens had the burden of proving unilateral mistake by clear and convincing evidence in order to reform the deed; that Mr. Stephens did not present sufficient evidence to do so; and that the district court erred by ruling that Mr. Stephens had proved unilateral mistake.

This argument is based upon a misunderstanding of the proceedings. As stated above, the issues of mutual and unilateral mistake were raised by Mr. Stephens in his motion for summary judgment, but the district court ultimately denied the motion. Therefore, this case went to trial on the issues raised in the pleadings. The district court did not grant Mr. Stephens's motion for involuntary dismissal on the ground of unilateral mistake. In its recitation of what the facts showed, the district court did state that Mr. Stephens did not intend to sell that portion of the property on the east side of the highway, but that was just to put in context the error made by Northern Title and its actions to correct that error. The court stated:

In weighing the evidence, it seems very clear to me that Stephens had no intention to sell the property east of the highway; that Stephens never authorized the sale of the property east of the highway; that both the real estate agents and the title company understood ...

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