Family Sav. & Loan, Inc. v. Ciccarello

• Decision Date: 16 July 1974
• Docket Number: No. 13409,13409
• Citation: 157 W.Va. 983,207 S.E.2d 157
• Court: West Virginia Supreme Court
• Parties: FAMILY SAVINGS AND LOAN, INC. v. Arthur T. CICCARELLO v. Walter L. WAGNER, Jr.

Page 157

207 S.E.2d 157

157 W.Va. 983

FAMILY SAVINGS AND LOAN, INC. v. Arthur T. CICCARELLO v. Walter L. WAGNER, Jr.

No. 13409.

Supreme Court of Appeals of West Virginia.

July 16, 1974.

Syllabus by the Court

1. Where a complaint in an action in which the plaintiff may proceed in contract or in tort charges that the defendant 'negligently, carelessly, and unskillfully' performed the service or act complained of and contains no reference to a breach of contract, such action clearly sounds in tort and the time within which it may be instituted is governed by Code, 1931, 55--2--12, as amended, the statute of limitations applicable to a cause of action involving tort liability.

2. Where, in a civil action against an attorney, the plaintiff alleges that he suffered damages by reason of the defendant's negligence in certifying as good and marketable the title to certain real property, the period of the applicable statute of limitations does not commence to run against the plaintiff's cause of action until he learns, or by the exercise of reasonable diligence should have learned, of the defect in the title.

Marshall & St. Clair, James W. St. Clair, Huntington, for appellant.

Steptoe & Johnson, Edward W. Eardley, Kay, Casto & Chaney, George S. Sharp, Charleston, for appellees.

CAPLAN, Chief Justice:

In this appeal the plaintiff, Family Savings and Loan, Inc., a corporation, sometimes hereinafter referred to as Family Savings, seeks a reversal of a final judgment of the Circuit Court of Kanawha County which denied an appeal from the Common Pleas Court of said county, holding that the judgment of that court was plainly right. The plaintiff instituted an action against the defendant, Arthur T. Ciccarello, for the recovery of damages which it alleged it suffered by reason of the defendant's negligence in certifying as good and marketable the titles to certain real property.

The defendant, upon the pleadings and certain depositions, moved the court for summary judgment, alleging as grounds therefor that there was no genuine issue as to any material fact. The court granted the motion and entered judgment dismissing the complaint. It is this judgment which the circuit court affirmed and which is ultimately the subject of this appeal.

In November, 1966 Family Savings retained Arthur T. Ciccarello, an attorney, to make a search of the records in the office of the clerk of the county court for the purpose of determining the legal status of the titles to certain lots in the City of Dunbar. These properties are designated as lot Nos. 57 and 63 of Section 4, Reservoir Hill, Union District, Kanawha County. Pursuant to that employment, the defendant, on December 6, 1966, accepted from Walter L. Wagner, Jr., an attorney, a certificate in which the latter certified as good and marketable the titles to the above lots. Relying on the certification by Mr. Wagner, the defendant, on December 19, 1966, similarly certified such titles to Family Savings. In his deposition, Mr. Ciccarello acknowledged that his certification of title was made without having examined the records in the clerk's office and that he had relied entirely on the certificate of Mr. Wagner. It was reflected in the depositions of both attorneys that the practice of relying on another attorney's certification of title was a fairly common practice among members of the bar in Kanawha County.

As alleged in its complaint, Family Savings, in reliance upon the title report submitted to it by the defendant, made a loan to Margaret M. Duncan, the prospective purchaser of the lots in the sum of $12,129.00, for which it received her note secured by a deed of trust on lot No. 57, and a loan in the same amount, with a note and deed of trust on lot No. 63. The borrower made payments on the loans until July, 1968. Upon default, Family Savings employed counsel other than Mr. Ciccarello to handle the foreclosure pursuant to the deeds of trust.

During the procedures followed by its counsel, it was for the first time reported and made known to Family Savings and Loan that the deed conveying the subject lots from an agency of the United States government to Allstate Realty Company, the predecessor in title to plaintiff's borrower, contained the following stipulation:

Special Use Limitation. The Grantee covenants and agrees that the improvements located on the land will be removed at the expense of the Grantee within 6 (six) months following the date of this deed, and that if the Grantee or his successors or assigns of the property hereby conveyed shall fail to observe said covenants, the property hereby conveyed shall revert and the title thereof shall be revested in the Grantor herein or his successors or assigns.

Neither the title opinion of attorney Ciccarello nor the one from attorney Wagner made any mention of the above 'Special Use Limitation'.

In his deposition Mr. Wagner testified that pursuant to the special use limitation contained in the deed, the houses had been severed from their foundations, were moved from the lots and were no longer a part of the land. He further stated that in his opinion such severance of the houses from the land did not affect the marketability of such properties.

The plaintiff alleges that by reason of the removal of the houses its security for the loans is now worthless; that the debtor who executed the deeds of trust has left the state; and that by reason of the defendant's negligence in the conduct of his title examination of the subject properties, the plaintiff has lost the amounts of $11,926.85 on Lot No. 63 and $11,928.51 on Lot No. 57.

Subsequent to the institution of this action by Family Savings, the defendant, on June 5, 1969, impleaded Walter L. Wagner, Jr., as a third-party defendant. In this third-party complaint Mr. Ciccarello alleged that he 'engaged the services of the third-party defendant, Walter L. Wagner, Jr., to make a search of the records * * * insofar as said records pertain to Lots 57 and 63 * * * and to determine the legal status of the title to said lots.' He further alleged that Mr. Wagner certified to him that the titles to the lots were good and marketable and that upon the strength of and in reliance upon said report he certified the titles to the plaintiff. Therefore, says the defendant and third-party plaintiff, Arthur T. Ciccarello, if Family Savings has suffered damage by reason of his title report, 'then such damage is the direct result of the failure on the part of the third-party defendant carefully to examine said title diligently and report any and all defects therein.' Consequently, Mr. Ciccarello claims that he is entitled to indemnity from Mr. Wagner, the third-party defendant, 'for any loss he may be compelled to pay as a result of said damage, if any such may exist.'

As herein noted, the common pleas court granted the defendant's motion for summary judgment and dismissed the complaint. It is from the judgment of the circuit court affirming such dismissal that this appeal is prosecuted.

The principal question presented for resolution on this appeal is novel to our jurisdiction, namely: When does the statute of limitations begin to run in a case against an attorney who submits a defective certificate of title? Preliminary questions to be answered are: (1) Was this action instituted in contract or in tort; and (2) What is the appropriate statute of limitations to be applied in this case?

The significance of whether the action was brought in contract or in tort is made clear by a consideration of the various statutes of limitations. If the action is instituted for a breach of contract, Code, 1931, 55--2--6 applies. Basically, that statute provides that an action on a contract shall be brought within five or ten years 'next after the right to bring the same shall have accrued'. The ten-year statute applies to written contracts; the five-year statute applies to any other contract, expressed or implied. Clearly, if, as contended by the plaintiff, this statute were applicable the institution of its action was timely.

On the other hand, if the action in the instant case were brought in tort, Code, 1931, 55--2--12, as amended, would apply. Thereunder, any action for personal injuries or property damages shall be brought within two years 'next after the right to bring the same shall have accrued'; and 'within one year next after the right to bring the same shall have accrued if it be for any other matter of such nature that, in case a party die, it could not have been brought at common law by or against his personal representative.' Inasmuch as the damage alleged to have been suffered in this case cannot be characterized as personal injuries or property damages, it follows that the action falls in the latter category. Therefore, if it is determined that the action was brought within one year next after the right to bring the same shall have accrued, its institution was timely.

Although the instant action could have been brought in contract, alleging that the defendant breached the obligations of his employment, an examination of the complaint leads us to believe that the plaintiff sought recovery in tort. A contract may have been implied in the complaint when the plaintiff alleged that he engaged the services of the defendant, however, there was no express charge of breach of contract or any further reference to the contract in the complaint. Rather, the plaintiff used words and charges in his complaint that sound exclusively in tort. He charged that the defendant 'negligently, carelessly, and unskillfully conducted his title examination * * * and did not use proper diligence'. These words connote charges of tort liability. The very basis for the action was the charge of negligence against the defendant.

In Carter v. Willis, 145 W.Va. 779, 117 S.E.2d 594 (1960), the plaintiff sued the water company for its failure to supply water to him. The Court noted that Carter could have sued in...