Evinger v. McDaniel Title Co., WD

• Decision Date: 17 March 1987
• Docket Number: No. WD,WD
• Citation: 726 S.W.2d 468
• Court: Missouri Court of Appeals
• Parties: Betty & Lee EVINGER, Respondents, v. McDANIEL TITLE COMPANY, Appellant. 38549.

Page 468

726 S.W.2d 468

Betty & Lee EVINGER, Respondents, v. McDANIEL TITLE COMPANY, Appellant.

No. WD 38549.

Missouri Court of Appeals Western District.

March 17, 1987.

Donald G. Stubbs, David K. Stubbs of Stubbs & Mann, P.C., Kansas City, for appellant.

Charles W. Gardner, Lee's Summit, for respondents.

Before PRITCHARD, P.J., and MANFORD and BERREY, JJ.

MANFORD, Judge.

This is an appeal from a judgment in a jury-tried case in favor of respondents (plaintiffs) on their claim for damages. The judgment is affirmed in part and reversed and remanded in part.

Respondents' petition alleged that appellant (defendant) had been negligent in its preparation of a preliminary title report and in reliance on the false report that respondents purchased some real estate which was subject to an adverse claim. Subsequently, the adverse claimants successfully prosecuted an action against respondents which resulted in a reformation of respondents' title. See Walkup v. Evinger, 653 S.W.2d 383 (Mo.App.1983).

In the present action, respondents alleged that due to the negligence of appellant, respondents were damaged. The jury awarded respondents $44,500.00 in damages.

On appeal, appellant raises five points and charges, in summary, that the trial court erred (1) in overruling appellant's motions for directed verdict or, in the alternative, in refusing to instruct the jury as to certain factual issues because respondents are collaterally estopped to dispute said factual issues; (2) in submitting respondents' verdict-directing instruction because the evidence did not establish a duty owed to respondents or that appellant breached any such duty; (3) in refusing to submit appellant's instruction on contributory negligence because said issue had been tried with the implied consent of respondents; (4) in sustaining respondents' objection to appellant's use of the transcript in the Walkup case to refresh the recollection of a witness; and (5) in overruling appellant's motion for new trial because the verdict was not supported by substantial evidence.

As indicated supra, this action arises from the purchase of some real estate which was subject to an adverse claim. For detailed facts concerning the exact nature of the dispute, see Walkup v. Evinger, 653 S.W.2d 383 (Mo.App.1983). For the purpose of this appeal, it is sufficient to note that the dispute centered around the legal description of the property contained in a predecessor deed recorded in 1912.

Respondents entered into an agreement with Robert and Judith Parker for the purchase of the real estate. Prior to the closing on the property, respondents ordered a preliminary title report from appellant. The description given appellant was the legal description contained in the Parker deed. Appellant issued its report which stated that "[p]ursuant to application for title insurance, we find the fee simple title to said real estate ... vested in Robert S. Parker and Judith M. Parker, husband and wife." After receipt of the preliminary title report, respondents proceeded with the closing on the transaction.

After the closing, respondents received, from the Parkers, a letter from an attorney for the adverse claimants which indicated that, because of an alteration of the legal description which occurred around 1952, the Parker deed incorrectly reflected that the property contained 80 acres, when in reality, there were only 55 acres. Respondents notified appellant of the dispute and subsequently appellant informed respondents that the Parker deed was, in fact, incorrect and that the dispute could be settled with the execution of quit claim deeds. Respondents refused to execute the quit claim deeds and appellant thereafter refused to issue title insurance on the property and refunded the insurance premium to respondents.

As indicated supra, respondents were later sued by the adverse claimants and such suit resulted in the reformation of the incorrect deeds. Respondents then initiated the present action against appellant. Any other facts are set forth infra as the disposal of appellant's points warrants.

Under point (1), appellant argues that in the case of Walkup, supra, certain facts had been established and issues determined and that the trial court in the present action erred in refusing to hold that respondents were collaterally estopped to relitigate those same facts and issues.

The doctrine of collateral estoppel precludes the relitigation of issues determined by a former judgment when (a) the issue decided in the prior adjudication is identical to the issue presented in the present action; (b) the prior adjudication resulted in a judgment on the merits; and (c) the party against whom collateral estoppel is asserted was a party in the prior adjudication. Oates v. Safeco Insurance Co. of America, 583 S.W.2d 713, 719 (Mo. banc 1979). Consumers Oil Co. v. Spiking, 717 S.W.2d 245, 249 (Mo.App.1986).

There is no question that the prior adjudication in Walkup was upon the merits of the case, or that the party against whom collateral estoppel is asserted (respondents) was a party in the prior adjudication.

Appellant further argues that this court determined in Walkup that (a) respondents (appellants in Walkup ) were aware of the adverse claim to the property prior to the closing, and (b) the course of Sni-A-Bar Creek (which was involved in the dispute as to the boundaries of the property in question) had changed over the years. ¹ Therefore, appellant argues, respondents should be collaterally estopped to relitigate those issues. Even if this court agreed with appellant that the court in Walkup determined those issues as appellant asserts, collateral estoppel would not apply because those issues (i.e., respondents' prior knowledge, and the course of Sni-A-Bar Creek) are not issues in the present action. The present suit involves the possible negligence of appellant in the preparation of the preliminary title report. Any prior knowledge of respondents would only be pertinent if appellant had pleaded and submitted the issue of respondents' contributory negligence. ² Respondents' prior knowledge of an adverse claim has no bearing on whether appellant owed a duty to respondents, whether that duty was breached, whether such breach was the proximate cause of respondents' injuries, and whether respondents were thereby damaged.

Likewise, the issue of the course of Sni-A-Bar Creek is not of any pertinence herein. The negligence alleged by respondents concerns appellant's failure to discover a discrepancy in the legal description which was contained in an earlier-recorded document. Granted, the discrepancy involved a reference to Sni-A-Bar Creek, but whether the creek actually changed its course over the years has nothing to do with the fact that there was a patent discrepancy between the Parker deed and an earlier-recorded deed or whether appellant's failure to discover the discrepancy amounts to negligence.

This court holds that the doctrine of collateral estoppel does not apply and the trial court did not err in refusing to instruct the jury as to the issues of respondents' prior knowledge and/or the course of Sni-A-Bar Creek. There is no merit to appellant's point (1) and it is ruled against appellant.

Under point (2), appellant argues that the trial court erred in submitting, over appellant's objection, Instruction No. 7, which states:

Your verdict must be for the plaintiffs if you believe:

First, defendant McDaniel Title Company issued to plaintiffs its Preliminary Title Report without first ascertaining that there was a potential adverse claim to the property described in plaintiffs' deed as disclosed by recorded documents, and

Second, defendant was thereby negligent, and

Third, as a direct result of such negligence plaintiffs suffered damage.

It is essential for a proper instruction that an issue in an instruction be supported by substantial evidence from which a jury can reasonably find such issue, and not be based on mere speculation or conjecture. Blase v. Bi-State Development Agency, 503 S.W.2d 463, 466 (Mo.App.1973). Appellant asserts that there was no evidence presented that appellant could have discovered that there was a potential adverse claim by examination of recorded documents, there was no evidence presented at trial to establish the legal duty of appellant to conform to a certain standard of conduct, and there was no evidence presented that appellant breached any such duty. Appellant's assertions are directly refuted by the record. The record clearly indicates that the Parker deed contained a legal description of the property in question that varied from the legal description contained in a predecessor deed; that the deeds in question were recorded and available to appellant in the Office of the Recorder of Deeds in the Jackson County Courthouse in Independence, Missouri; and that, in the opinion of an employee of appellant, the discrepancy indicated "quite obvious[ly]" that the deeds post-dating the 1912 deed contained an inaccurate legal description of the property. From this evidence, a jury could reasonably find that appellant could have ascertained that there was a potential adverse claim by the examination of recorded documents.

Further, as to the legal duty appellant owed to respondents, the record indicates that respondents had ordered from appellant a preliminary title report; that appellant issued to respondents said report; that said report states, in effect, that appellant has examined everything of record pertaining to the title. The jury was instructed that the term "negligence" means "the failure to use that degree of care that an ordinarily careful and prudent person would use under the same or similar circumstances." A duty to exercise care may be imposed by entering into a contractual relationship. See Scheibel v. Hillis, 531 S.W.2d 285, 288 (Mo. banc 1976) and Helton v. Hake, 564 S.W.2d 313, 317 (Mo.App.1978), cert. denied, 439...