Johnson v. Alexander , 413 S.C. 196 ( 2015 )


Menu:
  •           THE STATE OF SOUTH CAROLINA
    In The Supreme Court
    Amber Johnson, Petitioner,
    v.
    Stanley E. Alexander, Mario S. Inglese and Mario S.
    Inglese, PC, of whom Stanley E. Alexander is the
    Respondent.
    v.
    Mario S. Inglese and Mario S. Inglese, PC, Third Party
    Plaintiffs,
    v.
    Charles Feeley, Third Party Defendant.
    Appellate Case No. 2014-001167
    ON WRIT OF CERTIORARI TO THE COURT OF APPEALS
    Appeal from Charleston County
    The Honorable J. C. Nicholson, Jr., Circuit Court Judge
    Opinion No. 27553
    Heard June 2, 2015 – Filed July 29, 2015
    REVERSED AND REMANDED
    Mary Leigh Arnold, of Mary Leigh Arnold, PA, of Mt.
    Pleasant; Justin S. Kahn and Wes B. Allison, both of
    Kahn Law Firm, LLP, of Charleston, for Petitioner.
    Joel W. Collins, Jr., of Collins & Lacy, PC, of Columbia,
    and Robert F. Goings, of Goings Law Firm, LLC, of
    Columbia, for Respondent.
    JUSTICE HEARN: In this attorney malpractice case, Amber Johnson
    alleges her closing attorney, Stanley Alexander, breached his duty of care by
    failing to discover the house Johnson purchased had been sold at a tax sale the
    previous year. The trial court granted partial summary judgment in favor of
    Johnson as to Alexander's liability. On appeal, the court of appeals held Alexander
    could not be held liable as a matter of law simply because the attorney he hired to
    perform the title work may have been negligent. Instead, the court determined the
    relevant inquiry was "whether Alexander acted with reasonable care in relying on
    [another attorney's] title search"; accordingly, it reversed and remanded. Johnson
    v. Alexander, 
    408 S.C. 58
    , 64, 
    757 S.E.2d 553
    , 556 (Ct. App. 2014). We disagree
    and find the trial court properly granted summary judgment as to liability. We
    therefore remand to the trial court for a hearing on damages.
    FACTUAL/PROCEDURAL BACKGROUND
    Alexander acted as Johnson's closing attorney when she purchased a home
    in North Charleston on September 14, 2006. The title examination for the home
    had been performed by attorney Charles Feeley at the request of Johnson's
    previous attorney, Mario Inglese. Alexander purchased the title work from Inglese
    and relied on this title exam in concluding there were no back taxes owed on the
    property. Thereafter, Johnson learned the house had been sold at a tax sale and she
    did not have title to the property. In fact, the property had been sold October 3,
    2005, almost a year prior to Johnson's purchase. Because of the title issue, the
    mortgage payments on the home ceased and the property eventually went to
    foreclosure.
    Johnson brought this cause of action for malpractice, breach of fiduciary
    duty, and breach of contract against Alexander and Inglese. Specifically, Johnson
    alleged the attorneys owed her a duty to perform a complete title exam on the
    property to ensure she received good and clear title.
    Johnson moved for partial summary judgment as to Alexander's liability.
    At the hearing, Johnson submitted the affidavit of Mary Scarborough, the
    Delinquent Tax Collector for Charleston County. She attested that she "had direct
    and personal knowledge that information regarding delinquent taxes for real
    properties located in Charleston County, South Carolina, was readily and publicly
    available in July, August and September of 2006" in the Office of the Register
    Mesné Conveyance for Charleston County via a mainframe database.
    Furthermore, she stated that the Delinquent Tax data for Charleston County real
    properties has been publicly available on a mainframe database since 1997, when
    she helped design the system currently in use.
    Alexander presented an affidavit from Feeley stating that although he could
    not remember the specific details of this title exam, he conducted all his
    examinations the same. Feeley further detailed his process at length, explaining
    his reliance on the Charleston County Online Tax Systems and his practice of
    searching back ten years of tax payments. He indicated his notes showed he found
    no back taxes due or owing. Feeley also attested that a prior tax sale would not
    have been disclosed in the chain of title for this property or made publically
    available in the RMC office at the time of the title examination and closing in 2006
    because the tax sale deed was not recorded until December 12, 2006.
    The circuit court granted Johnson's motion as to Alexander's liability. The
    court relied heavily on Alexander's pleadings and admissions in his deposition that
    as a closing attorney he had a responsibility to ensure marketable title.
    Additionally, the court found Alexander had proximately caused Johnson's
    damages, but left the determination of the amount for a later hearing.
    On appeal, the court of appeals reversed and remanded, holding the circuit
    court incorrectly focused "its inquiry on whether an attorney conducting a title
    search on this property should have discovered the delinquent taxes from 2003 and
    2004 and the tax sale from 2005." 
    Johnson, 408 S.C. at 62
    , 757 S.E.2d at 555.
    Instead, the court of appeals held the proper question was "whether Alexander
    acted reasonably under the existing circumstances in relying on the title search
    performed by Feeley." 
    Id. at 63,
    757 S.E.2d at 555. Finding there was a genuine
    issue of material fact as to whether Alexander acted reasonably, the court of
    appeals reversed the grant of summary judgment and remanded for trial. 
    Id. at 64,
    757 S.E.2d at 556. This Court granted certiorari to review the opinion of the court
    of appeals.
    ISSUE PRESENTED
    Did the court of appeals err in reversing the circuit court's grant of summary
    judgment and remanding the case for trial?
    STANDARD OF REVIEW
    When reviewing a grant of summary judgment, this Court applies the same
    standard as the circuit court pursuant to Rule 56(c), SCRCP. Stevens & Wilkinson
    of S.C., Inc. v. City of Columbia, 
    409 S.C. 568
    , 576, 
    762 S.E.2d 696
    , 700 (2014).
    Summary judgment is appropriate where there is no genuine issue as to any
    material fact and the moving party is entitled to a judgment as a matter of law.
    Rule 56(c), SCRCP. In determining whether any triable issues of fact exist, the
    Court views the evidence and all reasonable inferences that may be drawn in the
    light most favorable to the non-moving party. Evening Post Pub. Co. v. Berkeley
    Cnty. Sch. Dist., 
    392 S.C. 76
    , 81–82, 
    708 S.E.2d 745
    , 748 (2011). To withstand a
    summary judgment motion in cases applying the preponderance of the evidence
    burden of proof, the non-moving party is only required to submit a mere scintilla of
    evidence. Turner v. Milliman, 
    392 S.C. 116
    , 122, 
    708 S.E.2d 766
    , 769 (2011).
    LAW/ANALYSIS
    Johnson argues the court of appeals erred in reversing the circuit court's
    grant of summary judgment because it misapprehended the proper standard of care.
    Specifically, Johnson argues the court of appeals erred in holding the requisite
    inquiry is whether an attorney reasonably relied on another attorney's work where
    that work is outsourced. Johnson contends that an attorney should be liable for
    negligence arising from tasks he chose to delegate unless he has expressly limited
    the scope of his representation. We agree.
    In a claim for legal malpractice, the plaintiff must prove: (1) the existence of
    an attorney-client relationship; (2) a breach of duty by the attorney; (3) damage to
    the client; and (4) proximate cause of the client's damages by the breach. Harris
    Teeter, Inc. v. Moore & Van Allen, PLLC, 
    390 S.C. 275
    , 282, 
    701 S.E.2d 742
    , 745
    (2010). An attorney is required to render services with the degree of skill, care,
    knowledge, and judgment usually possessed and exercised by members of the
    profession. Holy Loch Distribs., Inc. v. Hitchcock, 
    340 S.C. 20
    , 26, 
    531 S.E.2d 282
    , 285 (2000).
    In determining the scope of Alexander's duty, we accept his consistent
    characterization of this responsibility—ensuring Johnson received good title. In
    her complaint, Johnson alleged "[d]efendants had professional duties to ensure that
    Plaintiff was receiving good and clear title to the subject property free of any
    encumbrances, liens, or clouds on title before conducting the closing and if there
    was a problem after the closing, to correct said deficiencies and/or advise Plaintiff
    how to correct said deficiencies." In Alexander's answer he admitted those
    allegations. Parties are generally bound by their pleadings and are precluded from
    advancing arguments or submitting evidence contrary to those assertions. Elrod v.
    All, 
    243 S.C. 425
    , 436, 
    134 S.E.2d 410
    , 416 (1964) ("[T]he general rule[ is] that
    the parties to an action are judicially concluded and bound by such unless
    withdrawn, altered or stricken by amendment or otherwise. The allegations,
    statements or admissions contained in a pleading are conclusive as against the
    pleader. It follows that a party cannot subsequently take a position contradictory
    of, or inconsistent with, his pleadings and the facts which are admitted by the
    pleadings are to be taken as true against the pleader for the purpose of the action.
    Evidence contradicting such pleadings is inadmissible."). Additionally, during
    Alexander's deposition, he plainly conceded he owed a duty to Johnson to have
    clear title:
    Q. Alright. And you were hired, or you were her attorney for this
    closing? Right?
    A. Correct.
    Q. And you had responsibility to make sure that she got good and
    marketable title? Correct?
    A. Correct.
    Q. And that's one of the responsibilities of a lawyer handling the
    closing, representing the purchaser? Right?
    A. Correct.
    lexander cannot now assert his duty was anything other than what he has
    admitted—that he ensure good and clear title.
    However, even absent Alexander's admissions, we find the court of appeals
    erroneously equated delegation of a task with delegation of liability. Certainly,
    Feeley's negligence is the issue here, but that does not displace Alexander's
    ultimate responsibility. While an attorney may delegate certain tasks to other
    attorneys or staff, it does not follow that the attorney's professional decision to do
    so can change his liability to his client absent that client's clear, counseled consent.
    See Rule 1.8(h), RPC, RULE 407, SCACR ("A lawyer shall not. . . make an
    agreement prospectively limiting the lawyer's liability to a client for malpractice
    unless the client is independently represented in making the agreement."). Thus,
    Alexander owed Johnson a duty and absent her agreement otherwise, he was liable
    for that responsibility regardless of how he chose to have it carried out.1
    We therefore agree with Johnson that an attorney is liable for negligence in
    tasks he delegates absent some express limitation of his representation. Stated
    another way, without an express limitation in representation, attorneys cannot
    delegate liability for tasks that are undertaken in carrying out the duty owed the
    client. See 7A C.J.S. Attorney & Client § 289 ("Since an attorney has, in general,
    no authority to employ another attorney to attend to the matters in which the first
    attorney has been retained, it follows that, if the first attorney does entrust to
    another the performance or prosecution of matters entrusted to him or her, the first
    attorney becomes liable to the client for any negligence or wrongdoing on the part
    of the other attorney."). A holding to the contrary would effectively allow an
    attorney to independently limit the scope of his representation through the manner
    in which he performs his duties instead of being bound by what the client
    understands his responsibilities to be.
    1
    Alexander separately alleges that because Johnson knew he did not personally
    perform the title examination, its accuracy was not within the scope of his
    representation of her. We find this contention unpersuasive. Pursuant to Rule
    1.2(c), of the Rules of Professional Conduct, Rule 407, SCACR, "A lawyer may
    limit the scope of the representation if the limitation is reasonable under the
    circumstances and the client gives informed consent." In determining whether an
    attorney obtained informed consent, comment 6 to Rule 1.0 of the Rules of
    Professional Conduct, Rule 407, SCACR, clarifes that "A lawyer need not inform a
    client or other person of facts or implications already known to the client or other
    person; nevertheless, a lawyer who does not personally inform the client or other
    person assumes the risk that the client or other person is inadequately informed and
    the consent is invalid." Even assuming Johnson knew Alexander purchased the
    title work from another attorney, this does not alleviate Alexander's responsibility
    to ensure good title. It would only indicate she is aware he has delegated a task.
    Applying this standard to the facts, we find the grant of summary judgment
    was proper because there is no genuine issue of material fact as to liability. The
    circuit court relied on Scarborough's affidavit in concluding Johnson "proved to the
    Court what the public records reflected at the time of closing—taxes for the
    Property were delinquent for the tax years 2003 and 2004 and the Property had
    been sold on October 5, 2005 at a tax sale." Although Alexander submitted an
    affidavit by Feeley stating he would have discovered the information if it was
    public, we agree with the circuit court's ultimate conclusion that there was no issue
    of fact. Feeley admitted he did not remember the specifics of that transaction and
    provided no documentation supporting his assertion that he performed a ten year
    search and found no notice of the sale.
    Furthermore, we find the circuit court properly held there was no genuine
    issue of material fact as to proximate cause. Because of Alexander's failure to
    discover the tax sale, Johnson did not receive marketable title—or any title—to the
    property she purchased. She was therefore unable to sell or rent the property.
    Alexander's arguments that the property foreclosure was due to Johnson's own
    negligence in failing to pay the mortgage will certainly be considered during the
    hearing on damages; however, that allegation does not alter the fact that Johnson's
    purchase of the property that had already been sold was a direct result of his failure
    to ensure she received good title.
    CONCLUSION
    Based on the foregoing, we reverse the opinion of the court of appeals and
    hold an attorney is liable for negligence in tasks he chooses to delegate absent an
    express limitation of his representation. Finding Alexander breached his duty and
    damages resulted, we reinstate the grant of partial summary judgment as to
    Alexander's liability and remand for a determination of damages.
    TOAL, C.J., PLEICONES, KITTREDGE, JJ., and Acting Justice
    James E. Moore, concur.
    

Document Info

Docket Number: Appellate Case 2014-001167; 27553

Citation Numbers: 413 S.C. 196, 775 S.E.2d 697, 2015 S.C. LEXIS 257

Judges: Hearn, Toal, Pleicones, Kittredge, Moore

Filed Date: 7/29/2015

Precedential Status: Precedential

Modified Date: 11/14/2024