Walker v. Anderson-Oliver Title Insurance Agency, Inc.

2013 UT App 202_________________________________________________________
THE UTAH COURT OF APPEALS
JACK WALKER,
Plaintiff and Appellant,
v.
ANDERSON‐OLIVER TITLE INSURANCE AGENCY, INC.; STEWART
TITLE GUARANTY COMPANY; AND DANIEL G. ANDERSON,
Defendants and Appellees.
Opinion
No. 20111048‐CA
Filed August 15, 2013
Seventh District, Moab Department
The Honorable Wallace A. Lee
No. 090700198
Matthew N. Evans and S. Brandon Owen,
Attorneys for Appellant
George W. Burbidge II, Geoffrey C. Haslam, and
Tyler V. Snow, Attorneys for Appellees Anderson‐
Oliver Title Insurance Agency, Inc. and
Daniel G. Anderson
Laura S. Scott, Attorney for Appellee Stewart Title
Guaranty Company
JUDGE STEPHEN L. ROTH authored this Opinion, in which JUDGES
WILLIAM A. THORNE JR. and CAROLYN B. MCHUGH concurred.
ROTH, Judge:
¶1 Plaintiff Jack Walker appeals the district court’s grant of
summary judgment in favor of Defendants Anderson‐Oliver Title
Insurance Agency, Inc. (A‐O Title), Stewart Title Guaranty
Walker v. Anderson‐Oliver Title Insurance
Company (Stewart Title), and Daniel G. Anderson (collectively, the
Defendants) on various tort claims.1 We affirm.
BACKGROUND2
¶2 In 2003, in connection with the sale and purchase of
commercial property in downtown Moab, Utah (the Bank
Property), the prospective buyers (the Buyers) contracted with A‐O
Title to prepare a commitment for title insurance (the
Commitment) and to issue a title insurance policy (the Title
Insurance Policy) to “insure that upon closing, there will be vested
in [the Buyers] good and marketable fee simple title to the [Bank]
Property, free and clear of all liens, encumbrances, and other
objections and exceptions to title other than the permitted
exceptions.” The Buyers did not ask A‐O Title to prepare an
abstract of title.
¶3 Walker owns property immediately adjacent to the Bank
Property on which he has operated a drug store (the Walker
Property) for several decades. In the course of its search of county
records, A‐O Title became aware of two special warranty deeds
related to the Bank Property (the Access Deeds). Walker recorded
the Access Deeds in 1969, purporting to convey to himself an
easement on and over the Bank Property for access to and parking
for his business. The Defendants determined, however, that Walker
was not the record owner of the Bank Property when he recorded
1
A‐O Title is an agent for Stewart Title, a national title
insurance underwriter, and Anderson is an owner of A‐O Title.
2
In reviewing the district court’s grant of summary judg‐
ment, we view “the facts and all reasonable inferences drawn
therefrom in the light most favorable to the nonmoving party.”
Orvis v. Johnson, 2008 UT 2, ¶ 6, 177 P.3d 600 (citation and inter‐
nal quotation marks omitted).
20111048‐CA 2 2013 UT App 202Walker v. Anderson‐Oliver Title Insurance
the Access Deeds. After some discussion, the Defendants
ultimately determined that the Access Deeds did not create a valid
easement on the Bank Property and, therefore, decided not to list
them as exceptions in either the Commitment or the Title Insurance
Policy. In other words, the Defendants decided that “they were
willing to insure title” to the Bank Property “against loss or
damage [for any claim] . . . aris[ing]” from the Access Deeds. The
Defendants then issued the Commitment and the Title Insurance
Policy without listing the Access Deeds as exceptions to coverage
or otherwise disclosing them in either document. The Buyers
subsequently closed on the sale of the Bank Property with their title
to the property insured by the Defendants.
¶4 Sometime after closing, the Buyers approached Walker and
explained that they planned to expand the building located on the
Bank Property. The expansion would have extended the building
into the area that Walker used for access to and parking for his
business. Walker informed the Buyers of his claimed interest in the
Bank Property and provided them with copies of the Access Deeds.
The Buyers disputed the validity of the easement purportedly
created by the Access Deeds, and Walker brought suit against the
Buyers in federal court. At the conclusion of the federal lawsuit, a
jury found that the Access Deeds did not create a valid easement
but determined that Walker nonetheless had an easement under
theories of express oral agreement, estoppel, and prescriptive
easement.
¶5 Walker then brought this suit against the Defendants
alleging various causes of action sounding in tort, including
negligence and intentional interference with economic relations, or
tortious interference. He sought general damages and recovery of
attorney fees expended in the federal litigation. In alleging his
claim for negligence, Walker asserted that “by virtue of their
extensive review and analysis of” county records that affected the
Bank Property, the Defendants owed a duty to Walker and
breached that duty by failing to disclose the Access Deeds to the
Buyers in either the Commitment or the Title Insurance Policy. In
20111048‐CA 3 2013 UT App 202Walker v. Anderson‐Oliver Title Insurance
alleging his claim for tortious interference, Walker asserted that the
Defendants intentionally interfered with his economic relations in
operating his business and did so “for an improper purpose and/or
by improper means” by discovering and then failing to disclose the
Access Deeds to the Buyers in the Commitment and the Title
Insurance Policy. In support of his claims, Walker alleged that in
preparing the Commitment and the Title Insurance Policy, the
Defendants had acted as abstractors and had assumed and then
breached the duties typically imposed on abstractors. Ultimately,
he alleged that had the Buyers been advised of the Access Deeds,
they would not have purchased the Bank Property and Walker’s
use of a portion of that property would not have been challenged.
¶6 The Defendants moved for summary judgment on Walker’s
claims, arguing that in preparing and issuing the Commitment and
the Title Insurance Policy they had acted only as title insurers, not
as abstractors, and therefore were subject to liability only under the
terms of the insurance contract and not in tort. In opposition to the
Defendants’ motion, Walker argued that there were genuine issues
of material fact as to whether the Defendants had acted as
abstractors rather than title insurers in preparing and issuing the
Commitment and the Title Insurance Policy. Walker also argued
that the Defendants “owed a separate duty to Walker,” regardless
of whether they had acted as abstractors. The district court granted
the Defendants’ motion for summary judgment, concluding that,
as a matter of law, they had acted as title insurers, not as
abstractors, and had no duty to Walker. Walker appeals.
ISSUE AND STANDARD OF REVIEW
¶7 Walker challenges the district court’s decision to grant the
Defendants’ motion for summary judgment on his claims for
negligence and tortious interference. A district court’s decision to
grant summary judgment presents a question of law that is
reviewed for correctness. Chapman v. Uintah Cnty., 2003 UT App
383, ¶ 5, 81 P.3d 761.
20111048‐CA 4 2013 UT App 202Walker v. Anderson‐Oliver Title Insurance
ANALYSIS
I. Summary Judgment
¶8 To be entitled to summary judgment, the moving party must
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.”
Utah R. Civ. P. 56(c). Walker argues that the district court erred in
granting summary judgment on his claims for negligence and
tortious interference. In particular, he challenges the district court’s
determination that there were no genuine issues of material fact as
to whether the Defendants assumed and negligently breached the
duties of an abstractor. He also argues that the district court
improperly disposed of his claim for tortious interference and an
alternative theory of negligence because the court ignored his
argument that these claims depended on a duty distinct from that
of an abstractor. We conclude that under Utah case law, except in
unusual circumstances not present here, title insurers are not held
liable as abstractors. We also conclude that Walker’s other tort
claims fail because they attempt to impose abstractor liability on
title insurers contrary to Utah law.
A. Abstractor Liability
¶9 The distinction between abstractors and title insurers is
important because abstractors may be held liable in tort while title
insurers generally are liable only under the terms of the insurance
contract. See Culp Constr. Co. v. Buildmart Mall, 795 P.2d 650, 653–54
(Utah 1990); Chapman, 2003 UT App 383, ¶ 16. Our case law has
addressed the distinction between abstracts of title and title
insurance. An abstract of title is defined as
“[a] condensed history of the title to land, consisting
of a synopsis or summary of the material or
operative portion of all the conveyances, of whatever
kind or nature, which in any manner affect said land,
or any estate or interest therein, together with a
20111048‐CA 5 2013 UT App 202Walker v. Anderson‐Oliver Title Insurance
statement of all liens, charges, or liabilities to which
the same may be subject, and of which is in any way
material for purchasers to be apprised. An epitome
of the record evidence of title, including maps, plats,
and other aids.”
Culp, 795 P.2d at 654 (alteration in original) (quoting Black’s Law
Dictionary 10 (5th ed. 1979)). By contrast, title insurance is
“the insuring, guaranteeing, or indemnifying of
owners of real or personal property or the holders of
liens or encumbrances on that property, or others
interested in the property against loss or damage
suffered by reason of liens or encumbrances upon,
defects in, or the unmarketability of the title to the
property, or invalidity or unenforceability of any
liens or encumbrances on the property.”
Id. at 653–54 (quoting Utah Code Ann. § 31A‐1‐301(82) (Michie 1986
& Supp. 1989) (current version at Utah Code Ann. § 31A‐1‐301(164)
(LexisNexis Supp. 2013))). Title insurers have a statutory duty “to
make a reasonable search and examination of title for the purpose
of determining insurability.” Id. at 654 (citing Utah Code Ann.
§ 31A‐20‐110(1) (Michie 1986) (current version at id. § 31A‐20‐110(1)
(LexisNexis 2010))). Indeed, “[n]o title insurance policy may be
written until the title insurer or its agent has conducted a
reasonable search and examination of the title and has made a
determination of insurability of title under sound underwriting
principles.” Id. (citation and internal quotation marks omitted).
Nevertheless, this duty to perform “a reasonable search and
examination” is “for the purpose of determining the insurability of
title” and does not extend so far as to “impose a duty to abstract
titles upon title insurance companies.” Id.
¶10 Accordingly, “‘[t]he function, form, and character of a title
insurer is different from that of an abstractor.’” Chapman, 2003 UT
App 383, ¶ 16 (quoting Culp, 795 P.2d at 654). “‘A title insurance
20111048‐CA 6 2013 UT App 202Walker v. Anderson‐Oliver Title Insurance
company’s function is generally confined to the practice of
insurance, not to the practice of abstracting.’” Id. (quoting Culp, 795
P.2d at 654). “‘One who hires a title insurance company does so for
the purpose of obtaining the assurance or guarantee of obtaining
a certain position in the chain of title rather than for the purpose of
discovering the title status’” or the history of title. Id. (quoting Culp,
795 P.2d at 654). Thus, “preliminary title reports and commitments
for title insurance” are considered to be “no more than a statement
of the terms and conditions upon which the insurer is willing to
issue its title policy.” Culp, 795 P.2d at 653 (citation and internal
quotation marks omitted). “A commitment is not an abstract of
title” and therefore cannot reasonably be relied upon “as a
comprehensive statement of the status of title,” even by the
insured. Id. at 655. As a result, a title insurance company generally
is not subject to liability in tort3 for omitting the kind of information
in a commitment or title insurance policy that would typically be
included in an abstract of title. Id. at 653; Chapman, 2003 UT App
383, ¶ 16.
¶11 In granting summary judgment, the district court concluded
that the Defendants had acted as title insurers and not abstractors,
emphasizing that they were not asked to prepare an abstract of title
nor did they agree to prepare an abstract of title and that neither of
the documents they issued purported to be abstracts of title.
Rather, the Defendants agreed only to prepare and to issue the
Commitment and the Title Insurance Policy. Walker, however,
argues that despite what the Defendants agreed to do, the district
court erred in granting summary judgment because there are
genuine issues of material fact as to whether the Defendants acted
as abstractors and, therefore, assumed the duties of abstractors in
preparing and issuing the Commitment and the Title Insurance
Policy.
3
As we explain in more detail below, title insurance com‐
panies can be liable in tort for misrepresentations in a commit‐
ment and title insurance policy where they assume duties dis‐
tinct from those of a title insurer. See infra ¶¶ 13–14, 26–28.
20111048‐CA 7 2013 UT App 202Walker v. Anderson‐Oliver Title Insurance
¶12 In support, Walker relies on documents, expert testimony,
and depositions from Stewart Title employees and Daniel
Anderson, an owner of A‐O Title that discuss the importance of
providing purchasers of title insurance with a report detailing any
encumbrances that might affect title to the property. Walker argues
that the Defendants acted as abstractors because they determined
that the Access Deeds—documents that might affect title to the
Bank Property—were invalid and chose to exclude them from the
Commitment.
¶13 Walker’s position, however, is nearly identical to the
argument we rejected in Chapman v. Uintah County, 2003 UT App
383, 81 P.3d 761. In Chapman, the plaintiff argued that the
defendant title insurance company “voluntarily assume[d] the role
of abstractor . . . by mak[ing] legal conclusions about . . . public
records”—in particular, by including language in the title
insurance policy that suggested that an adjacent road was private
and appurtenant to the plaintiff’s newly‐acquired property. Id. ¶¶
2, 17 (alterations in original) (internal quotation marks omitted).
The plaintiff apparently relied on information in the title insurance
policy to conclude that the road was private. After purchasing the
property, he gated off the road only to later discover that the road
was actually public when the county ordered him to remove the
gate. Id. ¶¶ 2–3. The plaintiff sued his title company for negligence.
Id. The district court granted summary judgment to the title
insurance company, concluding that the title insurance company
was not liable in tort, id. ¶¶ 3–4, and on appeal, this court affirmed,
reasoning that the title insurance company “ha[d] not assumed any
additional role and did not act as an abstractor.” Id. ¶¶ 17–18.
¶14 In reaching that conclusion, the Chapman court distinguished
Culp Construction Co. v. Buildmart Mall, 795 P.2d 650 (Utah 1990).
See 2003 UT App 383, ¶¶ 17–18. In Culp, the Utah Supreme Court
concluded that the district court’s grant of summary judgment was
inappropriate because there was a genuine issue of material fact as
to whether the defendant title insurance company had actually
assumed the responsibilities of and acted as an abstractor. Culp, 795
20111048‐CA 8 2013 UT App 202Walker v. Anderson‐Oliver Title Insurance
P.2d at 655. Prior to closing, the plaintiff mortgage company
instructed the defendant title insurance company to deposit the
funds for a loan into escrow and not to release the funds to the
borrower unless the status of title remained the same as
represented in the commitment for title insurance. Id. The
mortgage company specified that if the title insurance company
was “unable or unwilling to promptly follow all of the above
referenced instructions,” it should not release the funds from
escrow. Id. (internal quotation marks omitted). The title insurance
company disbursed the funds despite the fact that a number of
intervening liens had been recorded that were not listed in the
commitment. Id. The supreme court explained that generally a
commitment for title insurance may not be relied upon as a
comprehensive statement of the status of the title. Id. at 653–55. The
court reasoned, however, that when the title insurance company
received the instruction not to disburse the loan proceeds unless
the status of the title remained unchanged, the company “may
have assumed the duties and responsibilities of an abstractor”
because it was conceivably on notice that the mortgage company
was relying on the commitment to determine the status of title. Id.
at 655. The Chapman court explained that although the title
insurance company in Culp may have “assumed a role separate and
apart from the issuance of the title insurance commitment and
policy” and acted as an abstractor by following the mortgage
company’s instructions, the title insurance company in Chapman
had “not assumed any additional role and did not act as an
abstractor” by simply making “a legal determination.” Chapman,
2003 UT App 383, ¶¶ 17–18 (citing Culp, 795 P.2d at 655).
¶15 Here, the Buyers requested that A‐O Title prepare and issue
the Commitment and the Title Insurance Policy. As the district
court observed, the Defendants “[were] not asked to prepare an
abstract of title and did not agree to prepare an abstract of title,”
and the Commitment itself does not “purport to be an abstract of
title.” Moreover, there is nothing to indicate that the Defendants
had reason to think that the Buyers were relying on either the
Commitment or the Title Insurance Policy as a comprehensive
20111048‐CA 9 2013 UT App 202Walker v. Anderson‐Oliver Title Insurance
statement of the history or state of the title as opposed to “a
statement of the terms and conditions upon which [the Defendants
were] willing to issue [title insurance].” See Culp, 795 P.2d at 653
(citation and internal quotation marks omitted). For instance,
Walker points to statements on Stewart Title’s public website that
the results of a title search “fully report all ‘material objections’ to
title” to disclose problems “so they can be corrected.” He also cites
a clause in the Defendants’ underwriting agreement that requires
a “written report of title resulting from a complete search and
examination” of title history before issuance of a title insurance
policy. Finally, Walker identifies other statements from A‐O Title
and Stewart Title employees discussing a title insurer’s role of
disclosing any liens in a title insurance commitment that might
affect title to the property. But Walker does not allege that the
Buyers saw any of this information—let alone relied on it—before
requesting the Commitment and Title Insurance Policy from the
Defendants, nor does he establish that the website statements
somehow modified the Commitment and the Title Insurance
Policy, the Defendants’ only written undertakings.
¶16 Rather, consistent with their obligations under Utah law, the
Defendants reviewed public records to identify potential
encumbrances or liens on the title in order to determine the extent
to which they would or would not insure the Bank Property.
During this process, the Defendants discovered the Access Deeds
but ultimately determined that they were invalid. Whatever legal
conclusion the Defendants made in the course of this determination
was within the scope of the “reasonable search and examination of
title for the purpose of determining insurability” required of a title
insurer under Utah law and did not move them into the very
distinct realm of the abstractor. See id. at 654. Because the
Defendants did not assume the duties of an abstractor, they are not
subject to liability in tort as an abstractor. Accordingly, we
conclude that the district court correctly determined that there are
no genuine issues of material fact as to whether the Defendants
acted as abstractors rather than title insurers and appropriately
20111048‐CA 10 2013 UT App 202Walker v. Anderson‐Oliver Title Insurance
granted summary judgment in favor of the Defendants on that
issue.
B. Walker’s “Separate Duty” Argument
¶17 Walker next argues that the district court erroneously
granted summary judgment to the Defendants on his claims for
tortious interference and negligence because the court limited its
analysis to abstractor liability and did not consider his argument
that the Defendants had breached another separate duty they owed
to Walker. We conclude, as did the district court, that the separate
duty upon which Walker’s tortious interference and negligence
claims both depend is simply the duty of an abstractor in a
different guise. Because we have already ruled that Walker has
failed to create a genuine issue of material fact to support his claim
that the Defendants acted as abstractors, the district court was
correct to dismiss the tort claims along with Walker’s claim for
abstractor liability.
1. Tortious Interference
¶18 Walker first argues that the district court erred in granting
summary judgment on his claim for tortious interference. To
prevail on a claim for intentional interference with economic
relations, “the plaintiff must prove that (1) the defendant
intentionally interfered with the plaintiff’s existing or potential
economic relations, (2) for an improper purpose or by improper
means, (3) causing injury to the plaintiff.” Overstock.com, Inc. v.
SmartBargains, Inc., 2008 UT 55, ¶ 18, 192 P.3d 858. According to
Walker, even if the Defendants did not act as abstractors, there is
at least a question of fact as to whether the Defendants interfered
with his economic relations through improper means.4 Walker
4To establish the second element of a claim for tortious
interference with economic relations, a plaintiff can show either
an improper purpose or improper means. Overstock.com, Inc. v.
(continued...)
20111048‐CA 11 2013 UT App 202Walker v. Anderson‐Oliver Title Insurance
explains that to prove improper means, he may show that the
Defendants’ conduct violated an established standard in the title
insurance industry. (Citing Jones & Trevor Mktg., Inc. v. Lowry, 2010
UT App 113, ¶ 17, 233 P.3d 538 (noting that improper means can be
shown by actions “contrary to statutory, regulatory, or common
law” or by the “[violation of] an established standard of a trade or
profession” (citation and internal quotation marks omitted)), aff’d,
2012 UT 39, 284 P.3d 630.) He argues that before title companies
issue insurance policies, “the established professional standard . . .
requires a preliminary report listing all encumbrances that may be
important.” In support of this proposition, he cites expert
testimony and a variety of other sources that discuss Stewart Title’s
internal policy of disclosing certain encumbrances to its customers
before issuing a title insurance policy. This evidence, Walker
contends, shows that “industry standards required that the
[Commitment] should have included the [Access Deeds],” and “is
distinct from the abstractor liability theory.”
¶19 We conclude that the tortious interference claim cannot
survive summary judgment for two reasons. First, the evidence
Walker offers is legally insufficient to establish a title insurance
industry standard. And second, Walker’s improper means
argument, if accepted, would impose the duties of an abstractor on
all title insurers contrary to Culp and Chapman.
¶20 Walker has failed to establish a genuine issue of material fact
regarding the existence of an industry standard. Establishing an
industry standard requires more than evidence of a particular
company’s rules and policies. See, e.g., Wessel v. Erickson
Landscaping Co., 711 P.2d 250, 253–54 (Utah 1985) (relying on the
4
(...continued)
SmartBargains, Inc., 2008 UT 55, ¶ 18, 192 P.3d 858. Improper
purpose requires “a showing that the actor’s predominant pur‐
pose was to injure the plaintiff.” Id. Walker does not argue that
the Defendants interfered with his economic relations for an
improper purpose, and we therefore do not reach the issue.
20111048‐CA 12 2013 UT App 202Walker v. Anderson‐Oliver Title Insurance
Uniform Building Code to establish an industry standard for
construction of a retaining wall); Crandall v. Ed Gardner Plumbing &
Heating, 405 P.2d 611, 612 (Utah 1965) (relying on testimony from
other plumbers about general practices to establish that a
defendant‐plumber violated industry standards); see also Wal–Mart
Stores, Inc. v. Wright, 774 N.E.2d 891, 894 (Ind. 2002) (noting that the
mere existence of a company’s internal corporate policy did not
create a legal duty to a plaintiff). Rather, “‘the standard of conduct
which the community demands must be an external and objective
one, rather than the individual judgment, good or bad, of the
particular actor.’” Wal–Mart Stores, 774 N.E.2d at 895 (quoting W.
Page Keeton, Prosser & Keeton on the Law of Torts § 32, at 173–74 (5th
ed. 1984)).
¶21 The evidence Walker offers, by contrast, focuses almost
exclusively on the Defendants’ internal company policies, not
general practices in the title insurance industry. Walker’s expert,
for example, stated that the “princip[al] facts” upon which he
based his opinion include deposition testimony from John Holt, a
Stewart Title employee, and Daniel Anderson, an owner of A‐O
Title; a clause from the Defendants’ underwriting agreement;
statements from Stewart Title’s website; and the fact that the
Defendants determined the Access Deeds did not need to be
disclosed. Walker’s brief refers to the same evidence as well as the
deposition of another Stewart Title employee discussing Stewart
Title’s internal practices. None of this evidence suffices to establish
the existence of an industry‐wide standard on which to base an
“improper means” claim.5
5
The Defendants also argue that because Walker is a
stranger to the Defendants’ contract with the Buyers, the Defen‐
dants cannot owe Walker a duty of disclosure absent a special
relationship. (Citing Yazd v. Woodside Homes Corp., 2006 UT 47,
¶ 17, 143 P.3d 283 (“A person who possesses important, even
vital, information of interest to another has no legal duty to
(continued...)
20111048‐CA 13 2013 UT App 202Walker v. Anderson‐Oliver Title Insurance
¶22 Moreover, Walker’s purported industry standard is
inconsistent with Utah statutes and case law governing the title
insurance industry. See supra ¶¶ 9–10. As noted earlier, Walker
relies on his expert’s report and evidence of Stewart Title’s internal
policies to argue that the “clear . . . established professional
standard for title insurance work requires a preliminary report
listing all encumbrances.” (Emphasis added.) In essence, Walker
argues that industry standards require that title insurers provide
an accurate title history consisting of all liens, charges, or other
encumbrances which are in any way material to the purchaser
before issuing title insurance—an obligation that is virtually
identical to the duty of an abstractor under Utah law. See Culp
Constr. Co. v. Buildmart Mall, 795 P.2d 650, 654 (Utah 1990) (defining
an “abstract of title” as a “‘condensed history of the title to land,
consisting of a synopsis or summary of the material or operative
portion of all conveyances’” (emphasis added) (quoting Black’s Law
Dictionary 10 (5th ed. 1979))). In other words, Walker’s argument
that industry standards required the Defendants to list the Access
Deeds on the Commitment or the Title Insurance Policy simply
recasts title insurers as abstractors. We have already rejected this
argument as contrary to Culp and Chapman. See Culp, 795 P.2d at
654 (explaining that a title company “did not owe a duty to abstract
the title by virtue of its status as a title insurance company”);
Chapman v. Uintah Cnty., 2003 UT App 383, ¶ 16, 81 P.3d 761 (“[The
plaintiff’s] claim that [the title insurance company] is liable in tort,
similar to an abstractor, for its error in representing the title in the
insurance commitment and policy is not supported by our case
law.”). And neither Walker’s evidence nor his arguments call into
question in any meaningful way the continuing applicability of
those cases. Consequently, the district court correctly granted the
Defendants summary judgment on the tortious interference claim.
5
(...continued)
communicate the information where no relationship between the
parties exists.”).) Because we resolve the question on different
grounds, we do not reach that issue.
20111048‐CA 14 2013 UT App 202Walker v. Anderson‐Oliver Title Insurance
2. Negligence
¶23 Walker also argues that the district court erred in granting
summary judgment on his negligence claim because it failed to
recognize an independent basis for negligence separate from
abstractor liability. According to Walker, instead of expressly
identifying the Access Deeds in the Commitment and the Title
Insurance Policy, the Defendants made a legal determination about
the validity of the Access Deeds and decided to insure over them
without disclosing their existence. In so doing, Walker argues, the
Defendants undertook an act “that gave rise to a duty to Walker . . .
separate and distinct from any duty related to whether the
[D]efendants acted as abstractors.” (Citing Stuckman ex rel. Nelson
v. Salt Lake City, 919 P.2d 568, 573 (Utah 1996).) “In other words,”
Walker asserts, “by failing to disclose the existence of the [Access
Deeds], the . . . Defendants did not act with ordinary care” and
thereby breached a duty owed to Walker. In support, Walker cites
the same evidence upon which he relied to establish abstractor
liability and improper means. See supra ¶¶ 12, 21. According to
Walker, this evidence creates an issue of material fact with respect
to whether the Defendants assumed a tort duty requiring
disclosure of the Access Deeds distinct from that of an abstractor.
¶24 We conclude, however, as did the district court, that the
negligence claim “boil[s] down to whether . . . the nature of the
[D]efendants’ work in this case amounted to abstracting title.” This
is because the negligence claim has no merit unless tort law
requires title insurers to provide an accurate title history when
issuing insurance—a duty our case law imposes only on abstractors
and on title companies that assume certain duties outside the
context of issuing title insurance. See Chapman, 2003 UT App 383,
¶¶ 17–18; see also supra ¶¶ 13–14. But we have already determined
that the Defendants did not act as abstractors by virtue of issuing
title insurance, and none of the evidence Walker provides creates
a genuine issue of material fact regarding whether the Defendants
assumed duties distinct from those of a title insurance company as
Chapman requires. See 2003 UT App 383, ¶¶ 17–18.
20111048‐CA 15 2013 UT App 202Walker v. Anderson‐Oliver Title Insurance
¶25 The fact that, after discovering the Access Deeds in the
course of their title search, the Defendants analyzed the Access
Deeds’ legal effect and then decided to insure over them rather
than identify them as exceptions to coverage on the Commitment
and Title Insurance Policy does not establish that they stepped out
of their title insurer role. Rather, the analytical process they
engaged in is inherent in that role, which is to insure the status of
title to a particular piece of property against all claims not
expressly excepted. To do that, insurers naturally must assess the
legal effect of any pertinent filing that a title search uncovers and
then decide whether to list it as an exception to coverage or insure
over it and take on the attendant risk. In fact, as we have earlier
discussed, Utah law requires just such an analysis as part of the
title insurance underwriting process. See supra ¶¶ 9–10; see also
Utah Code Ann. § 31A‐20‐110(1) (LexisNexis Supp. 2013). Thus, the
Defendants did not step out of their role as title insurers, as Walker
asserts, but acted well within that role. Walker’s contention that the
Defendants had a separate duty to list the Access Deeds on the
Commitment and the Title Insurance Policy despite the decision to
insure over them describes the responsibility of an abstractor, not
an insurer of title. Consequently, the negligence claim cannot
survive summary judgment.
¶26 Walker argues that this approach would effectively render
title companies immune from tort liability and cites a number of
cases in which courts have found title companies liable for
negligence, which he sees as supportive of his position here. See
Sevy v. Security Title Co., 902 P.2d 629 (Utah 1995); Christenson v.
Commonwealth Land Title Ins. Co., 666 P.2d 302 (Utah 1983); Espinoza
v. Safeco Title Ins. Co., 598 P.2d 346 (Utah 1979); Schwartz v. Adair,
2007 UT App 75U (mem.); New W. Fed. Sav. & Loan Ass’n v.
Guardian Title Co. of Utah, 818 P.2d 585 (Utah Ct. App. 1991); South
Sanpitch Co. v. Pack, 765 P.2d 1279 (Utah Ct. App. 1988). In each of
these cases, however, liability was either unrelated to a title
insurance commitment and policy, or under the particular facts the
title company assumed duties distinct from merely issuing title
insurance.
20111048‐CA 16 2013 UT App 202Walker v. Anderson‐Oliver Title Insurance
¶27 In Sevy, the Utah Supreme Court held a title company liable
for negligently failing to perfect a security interest in connection
with its contractual obligations to draft documents selling farmland
and transferring water rights. See 902 P.2d at 631–32, 636–37.
Schwartz involved a title company that failed to bid on a piece of
property as it had agreed, see 2007 UT App 75U, para. 3 (mem.),
and in South Sanpitch, a title company was found liable for failing
to correctly record a deed, 765 P.2d at 1282. None of these cases
premised liability on a title company’s failure to report title history
accurately in a title insurance commitment or policy.
¶28 Other cases where Utah courts have held title companies
liable for failing to accurately report title history involve facts
similar to Culp rather than this case. In Christenson, a title company
reported the status of several trust deeds to a developer who had
a right to the unpaid principal. See 666 P.2d at 304. The title
company erroneously signed an acknowledgment reporting that
the trust deeds had not been paid off, allowing the developer to use
the deeds as collateral to finance another project. Id. The supreme
court held that the title company was negligent because upon
signing the acknowledgment, “a duty arose to use reasonable care
to not mislead one whom [the title company] knew would . . . rely
upon the facts as represented.” Id. at 306. Similarly, in New West
Federal, this court held that a title company was negligent for
disbursing loan proceeds for a trust deed without reexamining the
title status of the property. See 818 P.2d at 590. The court noted that
the title company had expressly agreed not to disburse the funds
unless the trust deed was “a first and paramount lien of record,” so
the company breached a duty by failing to discover and disclose
prior liens. Id. at 589–90 (citation and internal quotation marks
omitted). In both cases, as in Culp, the title companies assumed
duties apart from those associated with issuing a title insurance
policy.6 As we have already discussed, see supra ¶¶ 24–25, Walker
6
Walker also cites Espinoza v. Safeco Title Insurance Co., 598
P.2d 346 (Utah 1979), which involved a title insurer that failed to
(continued...)
20111048‐CA 17 2013 UT App 202Walker v. Anderson‐Oliver Title Insurance
has failed to show that the Defendants assumed any duties
analogous to those mentioned in the cases he cites.
¶29 In summary, the district court correctly concluded that
Walker’s claims for negligence and tortious interference “boil
down to whether there is any genuine issue of material fact to
suggest that the nature of the [D]efendants’ work in this case
amounted to abstracting title.” Consequently, because Walker fails
to raise any genuine issues of material fact as to whether the
Defendants assumed responsibilities distinct from those of a title
insurer, neither claim can survive summary judgment. Further,
because our holding disposes of all Walker’s tort claims, his claim
for attorney fees under the third‐party tort rule also fails as a
matter of law. See South Sanpitch, 765 P.2d at 1282–83 (noting that
recovery of attorney fees under the third‐party tort rule requires
success on an underlying tort claim).
CONCLUSION
¶30 We conclude that the district court correctly granted
summary judgment to the Defendants. Because Walker fails to
raise any issues of material fact as to whether the Defendants
assumed any duties apart from issuing the Commitment and Title
6
(...continued)
discover an IRS tax lien before issuing title insurance. See id. at
347. The plaintiff in that case, however, failed to collect any
damages for breach of contract because the company paid the
tax lien, apparently honoring its insurance commitment, and the
plaintiff did not raise any tort claims. Id. at 347–48, 349 n.7.
Although the court acknowledged in a footnote that an insurer
can be liable for attorney fees for breaching a duty to its insured,
it also noted that “the plaintiff ha[d] not shown that [the title
insurer] breached its duty” by failing to discover the tax lien. Id.
at 349 n.7.
20111048‐CA 18 2013 UT App 202Walker v. Anderson‐Oliver Title Insurance
Insurance Policy, Chapman and Culp bar any recovery for abstractor
liability, negligence, tortious interference, and attorney fees under
the third‐party tort rule.
20111048‐CA 19 2013 UT App 202