Hulse v. First American Title Co.

• Decision Date: 12 October 2001
• Docket Number: No. 99-256, No. 99-265.
• Parties: Raymond M. HULSE and Kristina Hulse, f/k/a Kristina Bova, Appellants (Plaintiffs), v. FIRST AMERICAN TITLE COMPANY OF CROOK COUNTY, f/k/a First American Title Guaranty Agency of Crook County; First American Title Insurance Company; and BHJ, Inc., Appellees (Defendants). First American Title Company of Crook County, f/k/a First American Title Guaranty Agency of Crook County, Appellant (Defendant), v. Raymond M. Hulse and Kristina HULSE, f/k/a Kristina Bova, Appellees (Plaintiffs).
• Court: Wyoming Supreme Court

33 P.3d 122

2001 WY 95

Raymond M. HULSE and Kristina Hulse, f/k/a Kristina Bova, Appellants (Plaintiffs), v. FIRST AMERICAN TITLE COMPANY OF CROOK COUNTY, f/k/a First American Title Guaranty Agency of Crook County; First American Title Insurance Company; and BHJ, Inc., Appellees (Defendants).

First American Title Company of Crook County, f/k/a First American Title Guaranty Agency of Crook County, Appellant (Defendant), v. Raymond M. Hulse and Kristina HULSE, f/k/a Kristina Bova, Appellees (Plaintiffs).

Nos. 99-256, 99-265.

Supreme Court of Wyoming.

October 12, 2001.

Rehearing Denied November 20, 2001.

Stephen H. Kline of Kline & Jenkins, Cheyenne, WY; and Michael P. Reynolds and Brad A. Schreiber of Quinn, Day & Barker, Rapid City and Belle Fourche, SD, respectively, Representing Appellants Hulses. Argument by Mr. Schrieber.

Barry G. Williams and Kevin D. Huber of Williams, Porter, Day & Neville, Casper, WY, Representing Appellee First American Title Co. Argument by Mr. Williams.

James R. Bell and Kathleen J. Swanson of Murane & Bostwick, Casper, WY, Representing Appellee BHJ, Inc. Argument by Ms. Swanson.

Before LEHMAN, C.J., and GOLDEN, HILL and KITE, JJ. LEHMAN, Chief Justice.

[¶ 1] In these consolidated appeals we first determine the manner in which a private road, established pursuant to Wyo. Stat. Ann. § 24-9-101 et seq., is vacated. We will then analyze the effect our determination has upon the plaintiffs' causes of action.

[¶ 2] In case number 99-256 plaintiffs/appellants Raymond and Kristina Hulse appeal the district court's grant of summary judgment for defendants First American Title Insurance Company, its issuing agent First American Title Insurance Company of Crook County (collectively, First American), and BHJ, Inc., a real estate brokerage, on their claims of breach of contract, bad faith, fraud, and negligent misrepresentation. This case presents the novel issue whether the issuance of a title commitment and subsequently issued title insurance policy give rise in Wyoming to a tort cause of action against the title insurer and/or its issuing agent separate and apart from the contractual obligations of the title policy. It also requires us to address the scope of the duty owed by a licensed real estate broker to non-client purchasers. We affirm the district court's grant of summary judgment as applied to defendant First American, but vacate and remand for further determination as to the real estate brokerage, BHJ, Inc.

[¶ 3] In case number 99-265, the defendants cross-appeal the district court's holding that a private road providing access to the Hulses' property had been properly vacated by a recorded, written agreement of the previous landowners. We reverse the district court's holding.

ISSUES

99-256

[¶ 4] Plaintiffs/appellants Hulses present this statement of the issues:

1. Whether a genuine issue of material fact exists precluding summary judgment on Hulses' claims of breach of contract, bad faith, fraud and negligent misrepresentation against First American Title Company of Crook County, f/k/a First American Title Guaranty Agency of Crook County, First American Title Insurance Company.

2. Whether a cause of action exists for negligent search and disclosure.

3. Whether a genuine issue of material fact exists on Hulses' claim of fraud and negligent misrepresentation against BHJ, Inc.

4. Whether a genuine issue of material fact exists precluding summary judgment concerning the causation of any of Hulses' damages.

Defendant/appellee First American restates the issues:

1. Was the District Court correct in its findings that the alleged actions of First American resulted in no damages to the Hulses or in the alternative that any damages were caused by the actions of the Hulses themselves?

2. Was the District Court correct in ruling as a matter of law that no cause of action exists in Wyoming for negligent search and disclosure by a title insurance agent?

3. Was the District Court correct in its finding that no genuine issue of material fact existed with respect to the Hulses' claims for fraud and negligent misrepresentation against First American and therefore First American was entitled to judgment as a matter of law?

Defendant/appellee BHJ, Inc. states the issues:

A. Did the trial court properly rule that plaintiffs cannot recover for fraud or misrepresentation when they cannot prove any reliance on any representations by BHJ, Inc. about the subject property and cannot demonstrate loss or damage as a result of any misrepresentation?

B. Did the district court err in its finding that as a matter of law, affected parties could vacate a private road established [sic] the Board of County Commissioners without County Commissioner approval?

99-265

Defendant/appellant First American presents this statement of the issues:

A. Did the trial court err in its finding that as a matter of law affected parties could vacate a private road established by the Board of County Commissioners?

B. Did the district court err in its finding that as a matter of law affected parties could vacate a private road established by the Board of County Commissioners without County Commissioner approval?

Plaintiffs/appellees Hulses accept appellant's statement of the issues.

FACTS

[¶ 5] Pursuant to our standard of review for summary judgments, the recitation of facts is from the vantage point most favorable to the plaintiffs, as the party opposing the motions, awarding them all favorable inferences that may be drawn from the facts. S & G Investors, LLC v. Blackley, 994 P.2d 941, 943 (Wyo.2000).

[¶ 6] The case before us arises out of the 1994 purchase of a 2,080-acre ranch in Crook County, Wyoming known as the "Tumbling T" by plaintiffs Raymond and Kristina Hulse from William Moore. Access to this property is the focus of the parties' dispute; therefore, a discussion of its history is appropriate.

[¶ 7] In 1988, William and Phyllis Russell, Moore's stepfather and mother, owned the Tumbling T. At the time the property did not have access to a public highway so the Russells petitioned the Crook County Commissioners to declare a private road across the property of their neighbors, Albert and Lorene Neiman. In December of 1988, pursuant to Wyo. Stat. Ann. § 24-9-101 (Lexis 1999), the Crook County Commissioners granted the private road to the Russells on an already existing road that traversed the Neimans' property (hereinafter referred to as the Russell Private Road). Mr. Neiman objected to this grant because the private road was located on the east side of Whitetail Creek in an area where he kept a herd of buffalo. He contended that fencing of the private road was required and would effectively prohibit him from using Whitetail Creek to water his livestock. Mr. Neiman then appealed the Commissioners' grant of the private road to the district court, which affirmed the Board's decision to establish the road but reversed its order on the measure of damages.

[¶ 8] Following these developments, Mr. Neiman proposed to the Russells that he establish another road on his property on the west side of Whitetail Creek which would give them access to the Tumbling T. On November 21, 1989, the Neimans signed and filed with the clerk of record a private easement and right of way granting the Russells a restricted easement across their property limited solely to "farming and ranching purposes" (hereinafter referred to as the Neiman restricted easement). In November of 1990, while awaiting the district court's decision on appeal of the measure of damages for the private road, the Neimans and Moore (now in possession of the Tumbling T) signed a "settlement agreement." The agreement provided that Moore would take the necessary steps to withdraw his request for the private road previously established by the county commissioners in exchange for which the Neimans would agree to dismiss their appeal and to consent to the establishment of a road across to "the school section" as a continuance of the easement previously granted by them. The parties agreed to execute the necessary documents to carry out the intent of their agreement.¹ On June 4, 1991, Moore and the Neimans signed an "Agreement to Vacate Private Road" which purported to vacate the previously established private road and consider the Commissioners' order null and void. This document was filed with the clerk of record on September 9, 1991.

[¶ 9] We now turn to the facts surrounding the Hulses' purchase of the Tumbling T ranch. Ray Hulse and Bill Moore became acquainted when Hulse visited Wyoming to hunt. On these occasions Hulse often expressed an interest in purchasing the ranch from Moore. In a telephone conversation with Moore in 1994, Hulse learned that Moore had listed the property with BHJ, Inc., a real estate agency in Sheridan. Edward "Amory" Hubbard was the listing agent, and the ranch was priced at $975,000. Hulse continued to reside in Pennsylvania before the purchase and communicated with the parties in Wyoming generally by phone or fax with occasional visits. Hulse testified in deposition that at all times he intended to purchase the ranch for the purpose of operating a commercial hunting and outfitting business, bed and breakfast, and sporting goods shop. He further testified that he and/or Moore, more than once prior to and after signing a purchase agreement for the Tumbling T on May 24, 1994, had informed real estate agent Hubbard of Hulse's intended purpose for the ranch. In May of 1994, Moore assisted Hulse in his effort to obtain an outfitter's license by sending a letter of recommendation to the Wyoming State Board of Outfitters and Professional Guides.

[¶ 10] On May 24, 1994, Hulse signed a purchase agreement contracting to purchase the Tumbling T for $800,000. This agreement was written and provided by BHJ, Inc. and contained a standard disclaimer stating that the "Purchaser is not relying upon any representations of the Seller or Seller's agents...