DocketNumber: No. 08CA1.
Judges: McFARLAND, J.
Filed Date: 11/14/2008
Status: Non-Precedential
Modified Date: 4/18/2021
{¶ 3} After Collins had worked on the second parcel for approximately eight years, the Littletons filed for divorce. At this point in time, Collins had invested several thousand dollars in the second parcel.1 At some point prior to the finalization of the Littletons' divorce, Mrs. Littleton accepted a $200.00 payment from Collins as a down payment on the second parcel. At the final hearing on the Littletons' divorce, Mr. Littleton agreed to sell the second parcel to Collins for the remaining price, $3,300.00. In the Littetons' final divorce decree, it was noted that the second parcel was "allegedly encumbered by an oral pending purchase agreement," such agreement being that between Collins and Mr. Littleton for transfer of the second parcel to Collins following the tender of the $3.300.00 remaining purchase price to Littleton.
{¶ 4} On May 22, 2000, Collins assigned his interest in the second parcel to Appellant. On September 25, 2000, Appellant tendered the remaining $3,300.00 purchase price for the second parcel to Mr. Littleton's attorney. On November 15, 2000, Mr. Littleton's new counsel returned Appellant's tender, noting that Mr. Littleton stated that "the property [was] *Page 4 not for sale, particularly to Jeff Collins or his assignees." When his tender was returned, Appellant hired attorney David Pence to record the Littletons' final divorce decree in the Highland County Recorder's Office. As noted supra, the divorce decree stated that the second parcel was encumbered by an oral pending purchase agreement. The second parcel was identified only by street address, did not contain a metes and bounds description of the property or a deed reference and was not cross indexed to the deed for the second parcel. Further, the provision in the divorce decree did not state the names of the parties to the oral, pending purchase agreement.
{¶ 5} On December 9, 2000, Mr. Littleton transferred the second parcel to Appellees by means of a warranty deed for $6,700.00 consideration. On December 21, 2000, Appellant filed a motion to compel Mr. Littleton to convey the parcel to him. Littleton was served with the complaint on January 4, 2001. On February 9, 2001, Appellant filed a motion for default judgment. Littleton filed his answer to Appellant's motion eleven days late.
{¶ 6} On February 20, 2002, Appellees moved to intervene in the case, and on February 27, 2002, the trial court granted their motion. On the same day, Appellees filed a counterclaim against Appellant, and a cross-claim against Mr. Littleton. On December 24, 2002, the trial court overruled *Page 5 Appellant's motion for default judgment. On May 12, 2003, Appellant moved for summary judgment against Mr. Littleton. The trial court denied this motion on July 1, 2003. Thereafter, the trial court bifurcated the cases and proceeded with Appellant's case against Mr. Littleton. The trial court decided that case in favor of Appellant.
{¶ 7} On March 14, 2005, Appellant moved for summary judgment against Appellees. On April 13, 2005, Appellees moved for summary judgment against Appellant. By judgment entry dated September 1, 2005, the trial court granted Appellees' motion for summary judgment and denied Appellant's motion for summary judgment. In light of the trial court's decision, Appellees voluntarily dismissed their counterclaim against Appellant on September 9, 2005. Appellant appealed that decision. On appeal, we reversed and remanded the trial court's grant of summary judgment in Appellees' favor on March 27, 2007, in Pitzer v.Littleton, Highland App. No. 06CA14,
{¶ 8} As a result of our reversal and remand of the trial court's grant of summary judgment in Appellees' favor, the trial court conducted further proceedings, which included a bench trial on October 9, 2007.2 During the trial, there was much debate among counsel for both Appellant and *Page 6 Appellees, as well as the court, regarding how to interpret this Court's reasoning in reversing and remanding the grant of summary judgment. In addition to hearing arguments by counsel regarding the issues to be decided upon remand, Appellees presented their case, which included testimony from both Appellees, as well as the attorney who conducted the title search on the second parcel, Susan Davis.
{¶ 9} After considering briefs submitted by the parties, the trial court again found in favor of Appellees and against Appellant, determining that Appellees were "bona fide purchasers and took title to the property free and clear of any interest of the [appellant]. The trial court further held "that the filing of the Divorce Decree between Brian Littleton and his wife which contained the clause ``which is allegedly encumbered by an oral pending purchase agreement', [sic] does not act as ``notice', [sic] to the McKeehans even though this Decree was also recorded at the Recorders Office of Highland County, Ohio." In its decision, the trial court went on to discuss the issues regarding notice that exist in this case, which will be fully discussed, infra. Appellant now appeals the trial court's decision in favor of Appellees, assigning a single assignment of error for our review.
{¶ 13} Further, we noted in Pitzer, supra, that in David MooreBuilders, Inc. v. Hudson Village Joint Venture, Summit App. No. 22118, 2004-Ohio-4950, at ¶ 8, it was held that:
A purchaser of land who has notice that his grantor has contracted with a third party for the sale of such property or a part thereof takes subject to that contract or option to buy. Dunlap v. Ft. MohaveFarms (1961),
{¶ 14} In our prior decision related to the case sub judice, we reasoned that Appellees had failed to demonstrate the absence of genuine issues of material fact regarding whether to not they were on notice of Collins' prior claim against the property. The basis for our holding centered on concerns related to the doctrine of imputed notice with respect to the information obtained by Appellees' counsel, Susan Davis, while searching the title to the second parcel. When Appellees submitted their motion for summary judgment, they relied on the affidavit of their attorney, Susan Davis, to support their claim that they were bona fide purchasers without notice of Appellant's interest in the second parcel.
{¶ 15} In her affidavit, Davis attested that she was retained by Appellees in December 2000 to conduct a title search on the second parcel. Paragraphs 4-5 of her affidavit state, in pertinent part: *Page 10 "* * * [I]n the course of examining the title to the subject said real estate there was only found in the public records a notation in the records of the Highland County Recorder which stated: ``it is allegedly encumbered by an oral pending purchase agreement,' which was not sufficient notice, in her opinion, regarding the potential claim of Jack Pitzer or someone else to purchase said real estate.
* * * [A]s a consequence of her professional opinion stated above, she did not notify Mr. and Mrs. McKeehan of said statement as said statement did not contain any notices, names, or addresses of those potentially having an interest in said real estate."
{¶ 16} As we explained in Pitzer, supra, the doctrine of imputed notice to a client or principal rests upon the ground that the attorney or agent has knowledge of something, material to the particular transaction, which it is his duty to communicate to his principal.American Export Inland Coal Corp. v. Matthew Addy Co. (1925),
{¶ 17} A review of the transcript of the bench trial held pursuant to remand indicates there was much confusion among counsel and the court with respect to the interpretation of our reversal of summary judgment. For purposes of clarification, this Court's reversal and remand of the grant of summary judgment in Appellees' favor, was just that, a reversal based upon the failure of Appellees to show there were no genuine issues of material fact regarding the issue of notice. Our holding should be limited to the facts of that case, and simply indicated that summary judgment was premature based upon the evidence in the record at that time. It should not be construed to mean that we had already made a determination that Appellees were on notice of Appellant's claim and therefore could never be bona fide purchasers of the property. We include this language simply for purposes of clarification for the parties involved and to dispel any confusion. *Page 12
{¶ 18} As stated, the trial court conducted further proceedings upon remand, which included additional testimony by Appellees, as well as Susan Davis, the attorney Appellees hired to perform a title search on the property. After a thorough review of the transcript, we conclude that the record contains competent, credible evidence to support the trial court's determination that Appellees did not have notice of Appellant's claimed interest in the property and thus, were bona fide purchasers. However, it is at this point that we must address the arguments raised by Appellees regarding the application of the Marketable Title Act in so far as they deal with a purported adverse interest filing under R.C.
{¶ 19} R.C.
(A) Any person claiming an interest in land may preserve and keep effective the interest by filing for record during the forty-year period immediately following the effective date of the root of title of the person whose record title would otherwise be marketable, a notice in compliance with section
Further, R.C.
(1) Be in the form of an affidavit;
(2) State the nature of the claim to be preserved and the names and addresses of the persons for whose benefit the notice is being filed;
(3) Contain an accurate and full description of all land affected by the notice, which description shall be set forth in particular terms and not by general inclusions, except that if the claim is founded upon a recorded instrument, the description in the notice may be the same as that contained in such recorded instrument;
(4) State the name of each record owner of the land affected by the notice, at the time of its recording, together with the recording information of the instrument by which each record owner acquired title to the land;
(5) Be made by any person who has knowledge of the relevant facts or is competent to testify concerning them in court.
R.C.
{¶ 20} Here, in an attempt to protect his interest in the property at issue, Appellant's predecessor, Jeff Collins had a copy of Littleton's divorce decree recorded at the Highland County Recorder's Office. However, that decree merely provided that Littleton received, as his own separate property, the property identified as 14015 Cynthiana Rd., Hillsboro, Ohio. While the decree also provided that the property located at 14015 Cynthiana Rd., *Page 14
Hillsboro, Ohio, was "allegedly encumbered by an oral pending purchase agreement," it did not meet the requirements specified in R.C.
{¶ 21} During the bench trial that was held upon remand, Appellees' attorney, Susan Davis, testified regarding the title search she performed on the property. In regards to her review of the recorded divorce decree, Davis testified as follows:
"Q So, now you have this bit of information that you found, you have told us why you didn't think it was worth reporting, am I correct?
A I don't know if I said it was [sic] reporting, I think that I was
responsible for reporting anything that I felt was an encumbrance on the property and I did not feel that an alleged oral pending contract was an encumbrance.
Q Did you give any thought to a bona fide purchaser for value at that juncture, and something like that statement made [sic] play into that concept of whether or not Mr. McKeehan is a bona fide purchaser for value? *Page 15 A Well, I would have considered it as to whether it's Marketable Title or not, and whether he would hold good title, and I felt that he would unless someone who held a contract right or interest would file a separate action to enforce that, that would show that it was an agreement with terms and everything confirmed between the parties.
Q Let me be clear then. In the Recorder's Office nor in the Clerk's Office was there any option to purchase recorded?
A Correct.
Q Was there any contract to sell the real estate recorded?
A None at all.
Q Was there anything like a first right of refusal recorded anywhere?
A None at all.
Q Do you believe or not that the title standard given the fact that you located that require you as the examining attorney to look further into that, such as try to find Mr. Littleton and speak with him or anything of that nature?
A No, I felt like I was reporting what was on the record.
Q And it was it your professional opinion based on your education, training and experience that that language that you just read from the divorce decree did not constitute a lien, or cloud or encumbrance on the title?
A Correct, I did not feel it was a bona fide contract.
Q And did you report that fact to Glenn McKeehan, and let me be clear. Did you report the fact, one, of the existence of that language in the divorce decree?
A I don't think — it wasn't on my title exam. *Page 16 Q Did you feel any necessity in your professional opinion and experience to relate that to Mr. and Mrs. McKeehan that that was somewhere in the records?
A. Well, because apparently David Pence filed this at the Recorder's Office I thought if there was anything else there should have been something else filed as to the contract there. And no, I didn't feel that it was an encumbrance. October 9, 2007 Hrg. transcript pp. 72-75.
{¶ 22} Further, the court questioned Davis with regard to the application of R.C.
Q All right, did you find that either of the divorce decree as filed in the Clerk's Office or the divorce decree filed in the Recorder's Office, did you form an opinion as to whether or not those two filings complied with Section
* * *
A Yes, I did.
Q And that opinion was?
A Based upon that statute that if they attempted to do something it was not according to statute of what should have been done, it did not lead me or put me on notice.
Q And that is the question that the Court has, if a document does not reach the status of being recorded, if it does not comply with 5301.52 do you take the position that for purpose of notice — well, what is your position?
A I felt — my opinion was it was insufficient and then I get into that area of slanderous title, I got to be darn sure before I would put on an opinion and I did not feel complied with the statute.
Q And because it did not comply with the statute what impact did you give to it? *Page 17 A It was not an encumbrance, the title was marketable. October 9, 2007 Hrg. transcript, pp. 90-91.
{¶ 23} In its judgment entry, the trial court found in favor of Appellees, reasoning that Appellees "are bona fide purchasers and took title to the property free and clear of any interest of the [appellant]. The court further determined that the recorded divorce decree did not act as notice to Appellees, relying on R.C.
{¶ 24} In light of the deferential standard of review with which we approach this matter, we must affirm the decision of the trial court. With respect to actual notice, both Appellees testified that they had no notice of Jeff Collins' or Jack Pitzer's claim to the property. They testified that although the property had been maintained, they assumed it had been maintained by Littleton. Further, the trial court's determination that Appellees did not possess constructive knowledge of Appellant's claim is supported competent, credible evidence. Davis' testimony set forth her practice, procedure, reasoning and professional opinion in conducting the title search in question. Davis unequivocally testified that she did not feel that the alleged oral contract was a cloud on title that needed to be reported on the title exam and therefore she did not report it.
{¶ 25} Although the doctrine of imputed notice generally applies to the relationship between an attorney and client, we conclude that it has limited, if any, application in the present context. As set forth above, the doctrine of imputed notice to a client or principal rests upon the ground that the attorney or agent has knowledge of something,material to the particular transaction, which it is his duty tocommunicate to his principal. American Export, supra, (Emphasis added). Although the general rule is that notice to an agent, which acted for his principal, of facts affecting the character of the *Page 19 transaction, is constructive notice to the principal, analyzing the testimony of Susan Davis in light of both the Marketable Title Act and the doctrine of imputed notice, it does not appear that an attorney's knowledge of an alleged claim that does not meet the recording requirements contained in R.C.
{¶ 26} In light of the foregoing, we conclude that the trial court's determination that Appellees were bona fide purchasers of the property and took without notice of Appellant's claim is supported by competent, credible evidence. Accordingly, because the trial court's decision is not against the manifest weight of the evidence, we overrule Appellant's sole assignment of error and affirm the decision of the trial court.
*Page 20JUDGMENT AFFIRMED.
The Court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this Court directing the Highland County Common Pleas Court to carry this judgment into execution.
Any stay previously granted by this Court is hereby terminated as of the date of this entry.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. Exceptions.
Abele, P.J.: Concurs in Judgment Only. Harsha, J.: Not Participating.