Campbell v. Krupp

• Decision Date: 03 June 2011
• Docket Number: No. L–10–1224.,L–10–1224.
• Citation: 961 N.E.2d 205,195 Ohio App.3d 573,2011 -Ohio- 2694
• Parties: CAMPBELL, Appellee and Cross–Appellant, v. KRUPP et al., Aames Funding Corporation, Appellant and Cross–Appellee;Old Republic National Title Insurance Company, Cross–Appellee.
• Court: Ohio Court of Appeals

195 Ohio App.3d 573

2011 -Ohio- 2694

961 N.E.2d 205

CAMPBELL, Appellee and Cross–Appellant,

v.KRUPP et al., Aames Funding Corporation, Appellant and Cross–Appellee;Old Republic National Title Insurance Company, Cross–Appellee.

No. L–10–1224.

Court of Appeals of Ohio, Sixth District, Lucas County.

Decided June 3, 2011.

Gary A. Breier, Oregon, for appellee and cross-appellant.

Thomas W. Heintschel, Toledo, and Laura C. Infante, for appellant and cross-appellee.

Thomas W. Heintschel, for cross-appellee.YARBROUGH, Judge.

[Ohio App.3d 577] {¶ 1} This is an appeal and cross-appeal from a decision of the Lucas County Court of Common Pleas granting summary judgment for plaintiff-appellee/cross-appellant Dorothy Campbell, quieting title in real property located at 6119 Seaman Street in Oregon, in Lucas County, Ohio. Upon consideration of the assignments of error, we affirm.

{¶ 2} The facts of this case are as follows. William F. Fisher (“Fisher”), now deceased, was the father of William F. Fisher Jr. (“Fisher Jr.”) and Penny Krupp. Fisher also was a longtime close companion and friend of Campbell. In 1989, after suffering a stroke, Fisher moved in with Campbell and resided with her until 2002, when he subsequently moved into a nursing home. During the time that Fisher and Campbell lived together, Fisher rented out his house in Oregon, Ohio, and used the rental income to pay off the mortgage on that house. Fisher's Oregon house is the property at issue in this appeal.

{¶ 3} On January 10, 2003, Fisher executed a general power of attorney declaring his daughter, Mrs. Krupp, to be his attorney-in-fact. Fisher and Mrs. Krupp signed the document, and Mrs. Krupp's attorney, Thomas Luettke, signed it as a witness. Luettke also notarized the document, affixing his seal directly beneath these signatures. However, only Mrs. Krupp's name appeared in the acknowledgment clause, while Fisher's name did not. This power of attorney was not filed in Lucas County until November 2, 2005.

{¶ 4} Two months after the power of attorney was executed, Mrs. Krupp initiated guardianship proceedings in the Wood County Probate Court and, along with Fisher Jr., was appointed as a coguardian of Fisher. As part of the order granting guardianship, the court required that “[f]unds being held in the name of [Fisher] shall not be released to Guardian without a Court order directing release of a specific fund and amounts thereof.”

[Ohio App.3d 578] {¶ 5} Shortly after the guardianship proceedings, Fisher, Mrs. Krupp, and her family—consisting of her husband, David Krupp, and their three children—moved into Fisher's home in Oregon, Ohio. In order to provide better care for Fisher, Mrs. Krupp requested that the Wood County Probate Court grant her permission to borrow $40,000 against the value of the home to make it handicapped-accessible. After an investigation, the probate court ordered that the amount could be borrowed and that Mrs. Krupp would make the monthly mortgage payments on the $40,000 loan as rent for living in the home. Mrs. Krupp then requested that the court allow her to be added to the deed for the purpose of being able to obtain the loan. The court granted this request on August 11, 2003, and authorized the coguardians to make a new deed naming both Fisher and Mrs. Krupp as owners of the real estate in fee simple absolute. Mrs. Krupp did obtain a $40,000 mortgage on the property; however, the new deed naming her as an owner was not executed at that time.

{¶ 6} Subsequently, four additional loan transactions were executed with respect to Fisher's property, all of which occurred after he was adjudged incompetent, and none of which were approved by the Wood County Probate Court. The first was a September 30, 2004 mortgage for $114,000 purporting to have been signed by Fisher himself despite his incompetency. The second was a June 22, 2005 home-equity mortgage loan for $31,700 through M & I Bank FSB. Concurrently with this second mortgage, a new deed was executed granting Fisher's interest in the property to Fisher, and Mrs. Krupp and Mr. Krupp as joint tenants with rights of survivorship. Mrs. Krupp signed this quitclaim deed “William W. Fisher” as grantor, without making any notation that she was signing as his attorney-in-fact or guardian. In the same manner, Mrs. Krupp also signed the June 22, 2005 mortgage “William W. Fisher.” In addition, Mrs. Krupp and Mr. Krupp signed this loan on their own behalf.

{¶ 7} The third and fourth mortgage transactions, executed on October 24, 2005, through defendant-appellant/cross-appellee Aames Funding Corporation, were for $135,000 and $45,000 and were for the purpose of refinancing the previous loans. Mrs. Krupp was the only person to sign these mortgages, signing on her own behalf and for Mr. Krupp and Fisher as their attorney-in-fact. In connection with the these mortgages, defendant/cross-appellee Old Republic National Title Insurance Company issued two mortgagee-loan insurance policies to Aames Funding. The loan policies were solely between Old Republic and Aames Funding—no contractual relationship existed between Old Republic and Fisher, Mrs. Krupp, or Mr. Krupp.

{¶ 8} Fisher passed away on December 7, 2005. On April 6, 2006, Campbell, individually and as the executor of the estate of Fisher, filed a complaint to quiet title to Fisher's property in favor of his estate. Campbell then filed a motion for [Ohio App.3d 579] summary judgment on December 14, 2007, which Aames Funding opposed. Before the court issued a judgment, Campbell voluntarily dismissed the complaint on April 1, 2008, reserving the right to refile and incorporate all previous pleadings. She subsequently refiled on July 3, 2008, and amended her complaint on November 24, 2008. The amended complaint sought to quiet title to the property in Fisher's estate and alternatively added a request for compensatory damages in the amount of $180,000 against Mrs. Krupp, Aames Funding, and Old Republic for alleged negligence that allowed Mrs. Krupp to obtain these mortgages. The amended complaint also added a request for $540,000 in punitive damages against Mrs. Krupp, Aames Funding, and Old Republic for their allegedly reckless and malicious acts.

{¶ 9} After the filing of the amended complaint, Campbell moved for a decision on her motion for summary judgment that she had filed before the voluntary dismissal. This earlier motion included an argument seeking compensatory and punitive damages, which she did not request in her initial 2006 complaint, but which she included in the November 24, 2008 amended complaint. In an order journalized on July 13, 2010, the trial court granted Campbell's motion for summary judgment, quieting title to the property in favor of the Fisher estate and against any interests claimed by Aames Funding, Mrs. Krupp, or Mr. Krupp. In its order, however, the trial court denied Campbell's motion for summary judgment as to the claims for compensatory and punitive damages.

{¶ 10} Old Republic, on the other hand, moved for summary judgment on Campbell's second and third causes of action, which pertained to the compensatory and punitive damages respectively. In a separate order also journalized on July 13, 2010, the trial court granted this motion, thereby dismissing these claims against Old Republic.

{¶ 11} Aames Funding now appeals from the judgment that quieted title to the property in favor of Fisher's estate and declared that Aames Funding's mortgage interests are “void and/or invalid.” Campbell is cross-appealing from the judgment dismissing the second and third causes of action against Old Republic and from the denial of her motion for summary judgment as to the claims for compensatory and punitive damages. We will address Campbell's cross-appeal first.

{¶ 12} An appellate court reviews the trial court's grant of summary judgment de novo. Lorain Natl. Bank v. Saratoga Apts. (1989), 61 Ohio App.3d 127, 129, 572 N.E.2d 198; Grafton v. Ohio Edison Co. (1996), 77 Ohio St.3d 102, 105, 671 N.E.2d 241. Applying Civ.R. 56(C), summary judgment is appropriate when (1) there is no genuine issue as to any material fact, (2) the moving party is entitled to judgment as a matter of law, and (3) reasonable minds can come to but one conclusion, and viewing the evidence most strongly in favor of the nonmoving party, that conclusion is adverse to the nonmoving [Ohio App.3d 580] party. Harless v. Willis Day Warehousing Co. (1978), 54 Ohio St.2d 64, 66, 8 O.O.3d 73, 375 N.E.2d 46.

Campbell's Cross–Appeal

{¶ 13} On cross-appeal, Campbell raises the following two assignments of error, which we will address in reverse order. In her second assignment of error, Campbell argues:

{¶ 14} “The trial court erred in granting Old Republic National Title Insurance Company's motion for summary judgment finding that they could not be sued in tort for their reckless title search that led to mortgages being awarded to Penny Krupp.”

{¶ 15} In her amended complaint, Campbell presented two causes of action against Old Republic. The first alleged that Old Republic was negligent in performing the title search that was used in the Aames Funding mortgage transactions. The second alleged that Old Republic's conduct in performing the title search was reckless and intentionally done with “conscious disregard for the great and obvious harm that was caused to [Fisher].” As acknowledged by the parties, these causes of action sound in tort, not in contract. Old Republic argued in the trial court, and now argues on appeal in response to Campbell, that the economic-loss rule bars these tort claims.

{¶ 16} The economic-loss rule “generally prevents recovery in tort of damages for purely economic loss. * * * ‘ “[A] plaintiff who has suffered only economic loss due to another's negligence has not been injured in a manner which is legally cognizable or compensable.” ’ ” (Citations omitted.) Corporex Dev. & Constr. Mgt., Inc. v. Shook, Inc., 106 Ohio St.3d 412,...