Childs v. Mississippi Valley Title Ins. Co.

• Decision Date: 21 April 1978
• Citation: Childs v. Mississippi Valley Title Ins. Co., 359 So.2d 1146 (Ala. 1978)
• Parties: Oliver D. CHILDS et al. v. MISSISSIPPI VALLEY TITLE INSURANCE COMPANY, a corporation. 77-139.
• Court: Alabama Supreme Court

Page 1146

359 So.2d 1146

Oliver D. CHILDS et al. v.MISSISSIPPI VALLEY TITLE INSURANCE COMPANY, a corporation.

77-139.

Supreme Court of Alabama.

April 21, 1978.

Rehearing Denied June 23, 1978.

Joseph J. Boswell, Mobile, for appellants.

Jere Austill, Jr., of Austill, Austill & Austill, Mobile, for appellee.

Benjamen T. Rowe, Mobile, for Roland Perry and Dub Mitchell, amicus curiae.

EMBRY, Justice.

This is an appeal by Oliver D. and Mary Childs from a judgment dismissing their action, without prejudice, upon grant of Mississippi Valley's Rule 12(b)(6), ARCP, motion to dismiss.

The sole issue presented by this appeal is whether the complaint states a claim upon which relief can be granted.If under a provable set of facts upon a cognizable theory of law it does, then it should not have been dismissed.Jeannie's Grocery v. Baldwin County Electric Membership Corp., 331 So.2d 665(Ala.1976).

The Childses claim their complaint states a claim on the theory of the tort of "outrage," which has neither been accepted nor rejected in Alabama.Stated otherwise the issue is: whether Alabama should allow recovery of punitive and consequential damages and damages for mental pain and anguish in an insured's suit against his insurer predicated upon the insurer's bad faith misconduct.

It is necessary to set that complaint out here for a clear understanding of the case:

"FIRST CAUSE OF ACTION

"1.The plaintiffs in this case, Oliver D. Childs and Mary Childs, are bona fide resident citizens of Mobile County, Alabama.The defendant, Mississippi Valley Title Insurance Company, a corporation, is a foreign corporation with its principal place of business located in Jackson, Mississippi.

"2.Plaintiffs aver that heretofore on to-wit: the 5th of November, 1970, plaintiffs purchased real property situated in Mobile County, Alabama from Wilma B. Jones, a widow.The property described therein was conveyed by said grantor to plaintiffs by vendors lien deed.A copy of that instrument is attached hereto marked as Exhibit 'A' and made a part hereof by reference thereto as if fully herein set out.

"On to-wit: the 9th day of November, 1970, the defendant issued a real estate title insurance policy to the plaintiffs.Under the terms of said insurance policy the defendant insured the plaintiffs against adverse claims to title, defects in or liens or encumbrances on the title to the estate or interest covered in the land described in the policy.A copy of the policy is attached hereto marked as Exhibit 'B' and made a part hereof by reference thereto as if fully herein set out.

"On to-wit: the 9th day of October, 1975, plaintiffs conveyed the property purchased from Wilma B. Jones, a widow, and insured by defendant, to plaintiffs daughter-in-law, Charlotte Childs.That conveyance was made by a full warranty deed.A copy of that instrument is attached hereto marked Exhibit 'C' and made a part hereof by reference thereto as if fully herein set out.Subsequent to plaintiffs said grantee taking title to said property, plaintiffs grantee attempted to obtain a title insurance policy on the property which had been conveyed to her by plaintiffs.In response to that request Title Guaranty and Abstract Company of Mobile issued a title binder on the property purchased by plaintiffs grantee.Said title insurance company advised plaintiffs grantee in said title binder in substance that plaintiffs had failed to convey said property to her free and clear of any defects in title due to the fact that one Steve R. Jones and Cynthia Jones, a son and daughter-in-law of the plaintiffs grantor, Wilma B. Jones had obtained a warranty deed to the same property by an instrument dated, June 7, 1973.A copy of said title binder is attached hereto marked Exhibit 'D' and made a part hereof by reference thereto as if fully herein set out.In said title binder said title insurance company required that a quitclaim deed be obtained from Steve R. Jones and Cynthia Jones conveying the interest they obtained in the warranty deed executed to them on June 7, 1973.Plaintiffs, upon request of their grantee, then contacted Steve R. Jones and requested a quitclaim deed as required in said title binder.There is a deed of record executed in 1969, wherein Cynthia Jones and Steve Jones, husband and wife, joined in a conveyance with all other children and their spouses of Wilma B. Jones conveying to Wilma B. Jones all of their interest in the subject property which they had inherited from their deceased father, Bradley W. Jones.When plaintiffs contacted Steve R. Jones to request a quitclaim deed to remove the cloud on and defect in their warranted title which had been created by the recording of the deed dated June 7, 1973, the said Steve Jones refused to execute a deed of any kind and also advised plaintiffs for the first time that the 1969 deed with his signature thereon purportedly conveying his inherited interest in the property to his mother was invalid in that the signature purporting to be his was forged and that he made a claim against the subject property claiming that he owned an undivided interest in the property at the time his motherWilma B. Jones, conveyed the property to plaintiffs.Upon plaintiffs advising their grantee of the claim of forgery, plaintiffs grantee then called upon plaintiffs to remove or eliminate the adverse claim to title and to remove and eliminate the defect in and cloud on the title which title plaintiffs had warranted to be free of defects.Plaintiffs then verbally contacted said title insurance company, the authorized agent of defendant, in to-wit: December, 1976, and advised defendant of the adverse claim made by said Steve R. Jones wherein he claimed an ownership interest on the property insured by defendant which ownership interest was claimed to have existed on the date the property was conveyed by Wilma B. Jones to plaintiffs and on the date that defendant insured the title to plaintiffs.The defendant failed or refused to take any affirmative action of any kind to clear plaintiffs' title of the cloud thereon and defect therein brought about by the adverse claim to title made by Steve R. Jones.Plaintiffs then hired an attorney to communicate with Title Guaranty and Abstract Company of Mobile, the agent of the defendant, in an effort to obtain from defendant the performance which was due and owing to plaintiffs under the terms of the title insurance policy attached hereto.By letter dated March 14, 1977, plaintiffs' attorney communicated for the first time with Title Guaranty and Abstract Company of Mobile and in said communication made demand upon the defendant to undertake the defense of plaintiffs' insured title and to do whatever may be necessary to remove the cloud created on and the defect in plaintiffs' title as a result of the claim of forgery and adverse claim to title made by Steve R. Jones.A copy of that letter is attached hereto marked Exhibit 'E' and made a part hereof by reference thereto as if fully herein set out.Thereafter, plaintiffs' attorney again communicated with Title Guaranty and Abstract Company of Mobile by letter dated April 12, 1977, and for the second time, made demand upon the defendant to either pay the person who claimed to own an interest in the property at the time plaintiffs purchased the same and at the time defendant insured the same, or in the alternative, to initiate whatever legal action may be necessary to cure the cloud on and defect in plaintiffs' insured title as a result of the adverse claim to title made by Steve Jones.A copy of that letter is attached hereto marked Exhibit 'F' and made a part hereof by reference thereto as if fully herein set out.Thereafter, on July 15, 1977, plaintiffs' attorney again communicated with Title Guaranty and Abstract Company of Mobile, and, for the third time, made demand in writing upon the defendant to either pay the person who claimed to own an interest in the insured title at the time the property was conveyed to plaintiffs and at the time defendant insured the same, or in the alternative, to forthwith initiate whatever legal action may be necessary to remove the cloud on and defect in plaintiffs' insured title resulting from the adverse claim to title made by Steve Jones.A copy of that letter is attached hereto marked Exhibit 'G' and made a part hereof by reference thereto as if fully herein set out.The defendant failed and refused to take any affirmative action in response to the verbal and written demands of plaintiffs.On the 26th day of August, 1977, plaintiffs went to the office of Title Guaranty and Abstract Company of Mobile and inquired of the authorized agent of the defendant company what action, if any, the defendant had undertaken or intended to undertake to remove the cloud on and cure the defect in plaintiffs' insured title resulting from the adverse claim to title made by Steve Jones, and defendant's authorized agent verbally advised plaintiffs that Steve R. Jones had failed to respond to defendant's efforts to communicate with him and that the defendant had done all it intended to do and had no intentions of making any further effort to cure the defect in and remove the cloud on plaintiffs' insured title created by the claim of forgery and adverse claim to title made by the said Steve R. Jones and said agent further verbally advised plaintiffs at that time that if plaintiffs wished to determine the validity or invalidity of the adverse claim to title made by Steve R. Jones that plaintiffs could file their own lawsuit and pay their own legal expenses.

"3.Plaintiffs aver that although the said title insurance policy was in full force and effect and that although notice was given to the defendant that a claim of title or interest adverse to plaintiff's title, as insured by defendant, was made by Steve R. Jones and although repeated demands were made for defendant to defend plaintiffs' insured title or take affirmative...