Driebe v. Cox

• Decision Date: 31 January 1992
• Docket Number: No. A91A1973,A91A1973
• Citation: 416 S.E.2d 314,203 Ga.App. 8
• Parties: DRIEBE et al. v. COX.
• Court: Georgia Court of Appeals

Page 314

416 S.E.2d 314

203 Ga.App. 8

DRIEBE et al. v. COX.

No. A91A1973.

Court of Appeals of Georgia.

Jan. 31, 1992.

Reconsideration Denied Feb. 20, 1992.

Certiorari Denied April 6, 1992.

Driebe & Driebe, Charles J. Driebe, Jr., Jonesboro, for appellants.

Strauss & Walker, John T. Strauss, Covington, Haber & Horne, Joel M. Haber, Conyers, W. Dan Greer, Covington, for appellee.

POPE, Judge.

This appeal involves a claim by a seller of real estate against the buyer's closing attorney and his law firm for the closing attorney's alleged negligence in drafting the warranty deed from seller to buyer. Appellee Richard J. Cox entered into a contract to sell Rotomco, Inc., certain real estate located in Newton County. Rotomco employed appellant Charles J. Driebe and his firm Driebe & Driebe, P.C. to close the sale. Relying on a survey prepared by East Metro Surveyors, Inc., who were also third party defendants below, Driebe prepared a warranty deed wherein Cox purported to transfer 130.1 acres to Rotomco. Cox in fact did not own approximately 4.5 acres of that tract. Cox attended the closing with his attorney.

Approximately a year later, an attorney, representing the owners of the 4.5 acre tract that was erroneously transferred, contacted the parties to this transaction pointing out the mistake. Rotomco made a demand on Cox to refund the apportioned part of the purchase price, which was determined to be $25,076.88. Cox refused. Driebe then paid the lender the apportioned purchase price and obtained the necessary quitclaim deeds from Rotomco and Rotomco's lender for the true owners.

Rotomco thereafter sued Cox for breach of his warranty of title and for his failure to pay the requested apportioned value of the 4.5 acre tract. Cox responded denying liability and filed a third-party action against Driebe, his law firm (hereinafter collectively "the Driebe defendants") and the surveyors. This case was tried before a jury and bifurcated as to the two claims: (1) the "main" claim in which Rotomco sought damages against Cox for breach of warranty; and (2) the "third-party" claim in which Cox sought indemnity against the Driebe defendants and the surveyors. The jury returned a verdict in favor of Rotomco against Cox on the main claim in the amount of $17,510.32. On the third-party claim, the jury returned a verdict in favor of Cox, finding that he was entitled to indemnity from the Driebe defendants in the amount of $15,759.38 and from the surveyors in the amount of $875.52. The Driebe defendants filed this appeal from that judgment.

1. This case presents the novel issue to this court of whether the attorney for the buyer in a real estate transaction can be held liable to the seller for negligence in legal work in connection with the sale. Before an action for malpractice or negligence can lie against an attorney, there must be a legal duty from the attorney to the plaintiff. Like many states, the trend in Georgia has been to relax the rule of strict contractual privity in malpractice actions, recognizing that under certain circumstances, professionals owe a duty of reasonable care to parties who are not their clients.

In deciding whether Driebe owed a duty to Cox, we are guided by other decisions of this court in which we were asked to consider whether an attorney had a duty to a third party in a real estate transaction. In Simmerson v. Blanks, 149 Ga.App. 478, 254 S.E.2d 716 (1979), the seller in a real estate transaction was allowed to pursue a negligence claim against the buyer's attorney, when following the closing, the buyer's attorney offered to "take care of the filing of the papers." The attorney's offer encompassed the filing of a financing statement to give the seller a first lien on the property. The attorney filed the "papers" in the wrong county. This court held that "a gratuitous agent owes his principal the duty to exercise slight diligence, and a proper appraisal of the agent's conduct encompasses the knowledge which he professes to possess. [Cits.]" Id. at 480, 254 S.E.2d 716. Therefore, we concluded that by gratuitously offering to act for the buyer, the attorney subjected himself to liability for his misfeasance. Id. at (2), 254 S.E.2d 716.

In Kirby v. Chester, 174 Ga.App. 881(2), 331 S.E.2d 915 (1985), this court held that a third-party beneficiary to a contract between an attorney and his client can maintain a malpractice action against the attorney. In that case, the attorney knew his client's lender was relying upon his title search and title certification for assurance that the lender would have sufficient collateral for its real estate loan to his client.

In Tower Fin. Svcs. v. Mapp, 198 Ga.App. 563, 402 S.E.2d 286 (1991), the surviving wife of a decedent misrepresented that she held title in fee simple to certain property inherited from her deceased husband. Based on her representation, Tower Financial Services (the "lender") made a loan to her secured by this property and filed its security deed. In fact, the decedent was also survived by three children from a former marriage who acquired an interest in the property securing the loan upon the death of their father, since he died intestate. The children brought an action against the lender, alleging that it had negligently or wrongfully interfered with their interests in the realty. The evidence at trial showed that the lender employed an attorney to conduct a title search but his search...