Fox v. Title Guaranty & Abstract Co. of Mobile, Inc.

• Decision Date: 01 October 1976
• Citation: 337 So.2d 1300
• Parties: Hattie P. Cooper FOX and Charles J. Fox v. TITLE GUARANTY AND ABSTRACT COMPANY OF MOBILE, INC., a corporation. Hattie P. Cooper FOX and Charles J. Fox v. FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION, a corporation. SC 1617, SC 1579.
• Court: Alabama Supreme Court

Page 1300

337 So.2d 1300

Hattie P. Cooper FOX and Charles J. Fox v. TITLE GUARANTY AND ABSTRACT COMPANY OF MOBILE, INC., a corporation.

Hattie P. Cooper FOX and Charles J. Fox v. FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION, a corporation.

SC 1617, SC 1579.

Supreme Court of Alabama.

Oct. 1, 1976.

William Roberts Wilson, Jr., Mobile, for appellants.

Michael J. Salmon, Mobile, for appellee.

ALMON, Justice.

This is an appeal from summary judgments against the defendants-appellants in a suit for ejectment and rent.

On or about November 15, 1972, Hattie P. Cooper Fox and her husband, Charlie J. Fox, approached First Federal Savings and Loan Association of Mobile (now Southern Federal) relative to refinancing their home, which Hattie Fox had acquired prior to their marriage. They dealt with John Watson, a loan officer at First Federal. According to sworn affidavits of the Foxes, Mrs. Fox advised Watson that there was a possibility that the Internal Revenue Service had placed a lien on the house as a result of a transfer made to her by her previous deceased husband. She said she told Mr. Watson that if she owed the Internal Revenue Service, she wanted to use the money from the loan to pay them. Otherwise, she would use the money to consolidate some bills.

According to the affidavit of Mrs. Fox, Watson advised her and her husband that First Federal had a company that they worked with all the time and, if there was any lien whatsoever, they would find it. The Foxes alleged that they understood Watson to be talking about a title insurance company, and they accepted his representations and placed their trust in him. Thereafter, according to the Foxes, Watson assured them that the title company had cleared the property and there was no lien on it.

According to Watson's affidavit, neither he nor anyone at First Federal made any inducements or representations to the Foxes concerning title to the property. He further stated that at no time was he advised of a lien and neither he nor First Federal undertook any duties to the Foxes concerning title to the property.

On or about December 19, 1972, the loan was closed and a new mortgage was executed to First Federal. The Foxes used the money to pay off debts, thereby dissipating their collateral and ability to pay off the Internal Revenue Service lien which thereafter surfaced in the form of a tax sale.

In December, 1972, First Federal took out a policy of mortgage title insurance from Title Guaranty and Abstract Company of Mobile, Inc. First Federal was the only named insured. On September 25, 1973, the Internal Revenue Service sold the Fox property. Title Guaranty and Abstract Company of Mobile purchased the property at the sale, paying $8,006.89 for it.

Title Guaranty sued the Foxes for ejectment and rent, alleging that Title Guaranty had legal title to the property, that the Foxes were in possession, and that the Foxes were unlawfully withholding possession from Title Guaranty.

The Foxes made a general denial and pleaded unjust enrichment and estoppel as special defenses. They joined to their answer a counterclaim and third party complaint against First Federal. The counterclaim and third party complaint were both in one pleading. It asserted six claims jointly against Title Guaranty and First Federal and Sought substantial damages, compensatory and punitive, against them jointly and severally. The claims are summarized briefly below:

1. That First Federal, an agent for Title Guaranty, and Title Guaranty, induced the Foxes to sign a note and mortgage and to borrow $28,840.00 from First Federal by misrepresenting to them that they did not have a tax lien on their property, when in fact there was such a lien; further, that the Foxes had a policy of title insurance on the property with Title Guaranty which they bought and paid for. As a result, they claimed Internal Revenue Service sold their property for taxes, and Title Guaranty bought it at a sale. In addition, the Foxes claimed that Title Guaranty was negligent in searching the title, thereby breaching a legal duty owed the Foxes.

2. On the same allegations, that Title Guaranty and its agent, First Federal, were grossly negligent in failing to discover the tax lien.

3. On the same allegations, that First Federal and Title Guaranty, acting in concert, breached express and implied warranties to them in undertaking to search the title to their property.

4. On the same allegations, the Foxes claimed that they were third-party beneficiaries under a policy of title insurance issued by Title Guaranty to First Federal on their property (a mortgage title policy), and claimed thereunder.

5. On the same allegations, the Foxes claimed that the Title Company and First Federal were guilty of the unauthorized practice of law.

6. That the same allegations constituted the tort of insult and outrage.

Title Guaranty and First Federal each filed motions to strike and dismiss the counterclaims and Third-Party action; Title Guaranty also filed a motion to strike the Foxes special defenses of estoppel and unjust enrichment.

The trial court ruled on these motions at pre-trial and made the rulings part of its pre-trial order. The order struck First Federal as a third party defendant, ordered the Foxes to amend so as to sever the claims against the two parties, and ordered the severed claim against First Federal docketed and tried as a separate action, the court declining consolidation.

The court also struck the Foxes third defense to the ejectment complaint, estoppel, and their fifth counter-claim or cause of action charging the unauthorized practice of law.

The Foxes never amended.

With trial date approaching, Title Guaranty filed a motion for summary judgment with affidavits; counter-affidavits and the deposition of Mrs. Fox were before the court. The court granted summary judgment for Title Guaranty on its ejectment complaint, and also granted summary judgment for Title Guaranty for the Foxes' counter-claims.

First Federal filed a motion for summary judgment in the severed action against it based on the pleadings, the affidavits, documents and deposition which had previously been filed, and a supplemental affidavit by John Watson, a loan officer of First Federal. The trial court granted First Federal's motion for summary judgment.

The Foxes claim the trial court erred in striking the various defenses, counterclaims and in granting the summary judgments. We shall address ourselves primarily to the summary judgments.

Summary judgment may be granted only where the moving papers show that there is no genuine issue as to any material fact, and the moving party is entitled to judgment as a matter of law. Isbell v. City of Huntsville, 295 Ala. 380, 330 So.2d 607, 10 ABR 769, 775 (1976); Birmingham Television Corp. v. Water Works, 292 Ala. 147, 152, 290 So.2d 636, 640 (1974).

The moving party for summary judgment has the burden of showing the absence of any genuine issue as to all material facts, which, under the applicable principles of substantive law, entitled it to a judgment as a matter of law. On review all reasonable doubts touching the existence of a genuine issue of a material fact must be resolved against the party moving for summary judgment. Bennett v. United Auto Parts, Inc., 294 Ala. 300, 315 So.2d 579 (1975). A trial judge may not make material factual findings on a motion for summary judgment. Ray v. Midfield Park, 293 Ala. 609, 308 So.2d 686 (1975).

Basically, what the Foxes are attempting to say is that they have some rights under the title insurance policy issued to First Federal. This claim is predicated upon their...