Bonner v. Chicago Title Ins. Co.

• Decision Date: 01 June 1992
• Docket Number: Docket No. 126793
• Citation: 194 Mich.App. 462,487 N.W.2d 807
• Parties: Ben V. BONNER, Personal Representative of the Estate of ASA W. Bonner, Jr., Deceased, and Virginia M. Bonner, Plaintiffs-Appellants, v. CHICAGO TITLE INSURANCE COMPANY and Charlevoix Abstract & Engineering Company, Defendants-Appellees.
• Court: Court of Appeal of Michigan — District of US

Page 807

487 N.W.2d 807

194 Mich.App. 462

Ben V. BONNER, Personal Representative of the Estate of ASA W. Bonner, Jr., Deceased, and Virginia M. Bonner Plaintiffs-Appellants, v. CHICAGO TITLE INSURANCE COMPANY and Charlevoix Abstract &amp Engineering Company, Defendants-Appellees.

Docket No. 126793.

Court of Appeals of Michigan.

Submitted Nov. 13, 1991, at Grand Rapids.

Decided June 1, 1992, at 9:20 a.m.

Released for Publication Aug. 28, 1992.

Bendure & Thomas (by J. Christopher Caldwell), Detroit, for plaintiffs.

Maddin, Hauser, Wartell, Roth, Heller & Pesses by C. Robert Wartell and Julie Chenot Mayer, Southfield, for Chicago Title Ins. Co.

Straub, Seaman & Allen, P.C. by John M. Donahue and Drew F. Seaman, St. Joseph, for Charlevoix Abstract & Engineering Co.

Before DOCTOROFF, P.J., and HOLBROOK, and FITZGERALD, JJ.

DOCTOROFF, Presiding Judge.

Plaintiffs appeal as of right from a circuit court order granting summary disposition in favor of defendants. Plaintiffs claim that the trial court erred in granting summary disposition of their negligence claim, in ruling that plaintiffs could not recover attorney fees as damages, in ruling that plaintiffs' claim of slander of title was time-barred, and in dismissing their claim alleging abuse of process against defendant Chicago Title Insurance Company. We affirm.

Plaintiffs own land in Eveline Township, Charlevoix County, Michigan. On October 1, 1970, Claud and Edith Gill, who owned land adjacent to plaintiffs' property, sold their land to Alex and Jean Pomnichowski under a land contract. On October 24, 1977, the Gills gave the Pomnichowskis a warranty deed to the property, which also conveyed to the Pomnichowskis an easement across plaintiffs' property. However, plaintiffs never granted an easement to the Gills or their predecessors in title. The Pomnichowskis' title was insured by defendant Chicago Title after a title examination was performed by Chicago Title's agent, defendant Charlevoix Abstract & Engineering Company.

In the fall of 1985, plaintiffs discovered that the Pomnichowskis were cutting trees on plaintiffs' property. Plaintiffs obtained an injunction preventing the further destruction of their property, and on October 28, 1985, plaintiffs commenced suit against the Pomnichowskis to clear the cloud on their title. As required by the title insurance contract between Chicago Title and the Pomnichowskis, Chicago Title defended the Pomnichowskis in the suit brought by plaintiffs. In May 1987, plaintiffs and the Pomnichowskis settled the suit by stipulation and agreement, and the Pomnichowskis quitclaimed to the plaintiffs whatever right they claimed to have in the easement and paid for the damage to the trees.

On August 11, 1988, plaintiffs filed this suit against defendant Chicago Title in the Oakland Circuit Court. The complaint alleged that Chicago Title had negligently insured the Pomnichowskis' title when they should have discovered the illegal easement, thereby causing plaintiffs to incur legal expenses of $29,000 to clear the title to their property. The second count of plaintiffs' complaint alleged abuse of process by Chicago Title in vigorously defending the Pomnichowskis in the prior suit. Plaintiffs alleged that Chicago Title knew that its position was indefensible, but that it hoped to use its superior economic power to prolong the litigation and thereby force plaintiffs to abandon the suit.

Chicago Title moved for summary disposition on October 3, 1988, pursuant to MCR 2.116(C)(8) and (10). Oakland Circuit Judge James S. Thorburn granted partial summary disposition with regard to the claim of abuse of process.

After Judge Thorburn's retirement, the suit was transferred to Oakland Circuit Judge Edward Sosnick. On June 27, 1989, plaintiffs amended their complaint by leave granted, adding defendant Charlevoix Abstract and adding the allegation of slander of title.

On September 26, 1989, Judge Sosnick transferred the suit to the Charlevoix Circuit Court, finding venue to be proper there. Both defendants moved for summary disposition of all counts of plaintiffs' complaint, pursuant to MCR 2.116(C)(7), (8), and (10). The Charlevoix Circuit Court granted defendants' motions and, in an order dated February 23, 1990, dismissed all counts of plaintiffs' amended complaint.

Plaintiffs first claim that the trial court erred in granting summary disposition of their negligence claim. Plaintiffs argue that the trial court erred in ruling that defendants owed no duty to plaintiffs because plaintiffs had not relied upon the title insurance policy.

A motion for summary disposition based on MCR 2.116(C)(8) tests the legal sufficiency of the claim by the pleadings alone. Terrell v. LBJ Electronics, 188 Mich.App. 717, 719, 470 N.W.2d 98 (1991); Pawlak v. Redox Corp., 182 Mich.App. 758, 763, 453 N.W.2d 304 (1990). The court must accept the factual allegations as true, along with any inferences that may be drawn from the facts. Id. The motion should be granted only when the claim is so unenforceable as a matter of law that no factual development could possibly justify a recovery. Id. In a negligence action, the motion is properly granted if it is determined, as a matter of law, that the defendant owed no duty to the plaintiff. Terrell, supra; New Hampshire Ins. Group v. Labombard, 155 Mich.App. 369, 372, 399 N.W.2d 527 (1986).

The elements of a negligence claim are (1) duty, (2) general standard of care, (3) specific standard of care, (4) cause in fact, (5) legal or proximate cause, and (6) damage. Moning v. Alfono, 400 Mich. 425, 437, 254 N.W.2d 759 (1977). "Duty is essentially a question of whether the relationship between the actor and the injured person gives rise to any legal obligation on the actor's part for the benefit of the injured person." Id., pp. 438-439, 254 N.W.2d 759. The question of duty is for the court to decide. Id., p. 438, 254 N.W.2d 759.

Plaintiffs claim that they were harmed by defendants' action in negligently searching and issuing the title insurance policy to the Pomnichowskis and that defendants owed plaintiffs a duty of care because they were within the class of those who foreseeably could be injured by defendants' negligent conduct.

Whether an abstract company or a title insurance company owes a duty of care to anyone in the class of those who foreseeably could be injured by the negligence of the abstract company or the title insurance company has not been determined in Michigan. In an analogous situation, however, in Williams v. Polgar, 391 Mich. 6, 21-23, 215 N.W.2d 149 (1974), the Michigan Supreme Court held that an abstracter could be liable under a theory of negligent misrepresentation where the abstracter negligently performed a title search. Our Supreme Court determined in that case that a cause of action for negligent misrepresentation ran to all those whom the abstracter reasonably could have foreseen as relying upon the accuracy of the abstract. Id., p. 22, 215 N.W.2d 149.

In Friedman v. Dozorc, 412 Mich. 1, 28, 312 N.W.2d 585 (1981), though factually distinct from this case, our Supreme Court held that reliance is an appropriate factor to be considered when determining whether a duty is owed a third party by a professional. Similarly, this Court in Law Offices of Stockler v. Rose, 174 Mich.App. 14, 35-36, 436 N.W.2d 70 (1989), stated with respect to the tort of negligent misrepresentation, and in reliance upon Williams, that the third parties to whom a duty is owed are limited to those parties whom the actor reasonably could foresee as relying upon the information provided.

In this case, Chicago Title insured the Pomnichowskis' title after a title search was performed by Charlevoix Abstract. The Pomnichowskis apparently relied upon the title search and policy, and believed that they had an easement across plaintiffs' property. As a result, plaintiffs incurred legal expenses to remove this cloud from their title. Plaintiffs do not claim to have had any contractual relationship with defendants, nor do plaintiffs claim to have relied upon the title policy issued by defendants.

In view of Williams, Friedman, and Stockler, we conclude that the trial court correctly held that defendants owed no duty to plaintiffs because plaintiffs did not rely on defendants' allegedly negligent misrepresentations. The grant of summary disposition was proper.

Plaintiffs' second claim is that the trial court erred in ruling that they could not recover attorney fees as damages.

Generally, attorney fees are not recoverable in litigation, either as costs or as an item of damages, unless expressly allowed by statute or court rule. Matras v. Amoco Oil Co., 424 Mich. 675, 695, 385 N.W.2d 586 (1986); DeWald v. Isola (After Remand), 188 Mich.App. 697, 699, 470 N.W.2d 505 (1991). An exception to this rule permits a plaintiff to recover as damages from a third party the attorney fees the plaintiff expended in a prior lawsuit the plaintiff was forced to defend or prosecute because of the wrongful acts of the third party. Warren v. McLouth Steel Corp., 111 Mich.App. 496, 508, 314 N.W.2d 666 (1981). See also Yamaha Motor Corp., U.S.A. v. Tri-City Motors & Sports, Inc., 171 Mich.App. 260, 281, 429 N.W.2d 871 (1988). Where there is no evidence to support a claim that a third party's wrongdoing caused the prior litigation, recovery of attorney fees under this exception is improper. Id.

Plaintiffs argue that they should be able to recover the attorney fees incurred in prosecuting the prior action against the Pomnichowskis because that action was necessitated by defendants' wrongdoing, namely, the negligent misrepresentation that the easement was properly conveyed. Having determined that summary disposition of plaintiffs' negligence claim was proper, we conclude that the trial court correctly ruled that plaintiffs could not recover attorney fees as damages. Plaintiffs cannot show that defendants' wrongdoing caused the prior...