Michak v. Transnation Title Ins. Co.
| Decision Date | 06 March 2003 |
| Docket Number | No. 71783-4.,71783-4. |
| Citation | 64 P.3d 22,148 Wash.2d 788 |
| Parties | Patricia S. MICHAK, a single person, Respondent, v. TRANSNATION TITLE INSURANCE COMPANY, an Arizona corporation, Petitioner. |
| Court | Washington Supreme Court |
Ryan Sells Uptegraft Inc., James Sells, Silverdale, for Petitioner.
Thomas Miller, Olympia, for Respondent.
In reviewing the trial court's dismissal on summary judgment of an insured's breach of contract claim, we must initially determine whether a title insurance company was contractually precluded from amending, prior to issuing its policy, the legal description of the subject property included in its preliminary title commitment. If we determine that the preliminary commitment contained no such bar, we must then consider whether, by initialing at closing the corrected one-page legal description of the property, the insured accepted the insurer's amendment of the description in its preliminary title commitment.
Because we conclude, first, that the insurer was entitled to amend the legal description in the preliminary commitment and, second, that the insured's initials demonstrated assent to the amendment, we reverse the Court of Appeals and reinstate the trial court's summary dismissal of the insured's suit.
In July 1997, Patricia Michak asked Transnation Title Insurance Company (Transnation) to provide title insurance and escrow services for her purchase of real property in Kitsap County. Michak was purchasing the property from the bankruptcy trustee of Brent C. Hart.1 Hart had acquired the property in April 1990 by statutory warranty deed. On July 7, 1997, Transnation issued Michak a preliminary title commitment. The first paragraph of Transnation's standard form "Commitment for Title Insurance" (Commitment) provided as follows:
Id. (emphasis added). The Commitment was made subject to the conditions set forth on the back of the form, in Schedule B, and in the requested policy. Id. Schedule A is a two-page document, its second page being devoted exclusively to the legal description of the property. There, the second of two easements is identified as "an easement for ingress and egress 60 feet in width as described in documents filed under Auditor's File Nos. 7804180111 and 7804180112." CP at 9 (emphasis added).
Approximately two weeks after Transnation issued the Commitment, the seller alerted Transnation that the width of the second easement had previously been reduced. On or around July 24, 1997, Transnation received the auditor's file documents showing that Hart had formally extinguished the easement in June of 1994, receiving as return consideration an alternative easement 30 feet in width. Susan Bane, a Transnation title officer, testified that she then prepared a supplement to the Commitment to correct the legal description in Schedule A. The "Supplemental No. 1 to the First Commitment" (Supplemental) is a two-page document. CP at 45-46. Appearing in bold print on the first page is the statement "ATTENTION: This Supplemental contains changes which impact title to property set forth in the above-referenced commitment." CP at 45. The first page, which bears Bane's signature, states the effective date of the Supplemental as August 1, 1997, and announces two changes: (1) the legal description in paragraph 3 of Schedule A "is amended as hereto attached," and (2) paragraph 5 in Schedule B is deleted. The attachment to the Supplemental is the one-page legal description previously included as page 2 of Schedule A in the Commitment, the sole change in the document being the alteration of "60" to "30." CP at 46. The first page of the Supplemental indicates that it was "[p]repared for" Debi Delimont in Transnation's escrow department, Interwest Bank, and the real estate agents for the seller and purchaser. CP at 45. Bane testified that by company practice the Supplemental would have been transmitted to those four parties by courier. CP at 109.
Delimont, the Transnation escrow agent who handled the closing of the transaction, stated by affidavit that she "recall[ed] ... that there was a supplement to the preliminary commitment for title insurance which changed the legal description of an easement from 60 to 30 feet in width," CP at 116, and she attached to her declaration a copy of the Supplemental held in the company's file. The escrow file contained the first page of the Supplemental, its second page (that is, the amended legal description), and the original of a duplicate of the second page bearing both the seller's and buyer's initials. CP at 118-20. Delimont declared that Transnation's policy was "to have all closing documents signed or initialed, as [Transnation] cannot close a transaction without proper signatures." CP at 116. From the record before us, the seller initialed the amended legal description on or before August 4, 1997. See CP at 76. Michak has formally admitted that she "initialed [the amended legal description] at closing." CP at 73. By affidavit, Michak acknowledged going to Transnation's Silverdale office, meeting with Delimont, and "sign[ing] all the closing documents."2 Michak stated that she "recall[ed] signing on[e] copy of a legal description" and "remember[ed] it as a single sheet separate from any other document." CP at 144; see also CP at 73. Two days later, on August 14, 1997, Transnation issued its "Owner's Policy of Title Insurance" (Policy). CP at 28-30. The Policy included the correct legal description, showing the easement of access as 30 feet wide.3
Michak contends that she learned of the reduced width of the easement the following year when she began to develop the property. Michak contacted Transnation for clarification, and on February 18, 1998, Transnation faxed her copies of the recorded documents altering the width of the easement. See CP at 39-41, 145. On May 15, 1998, Michak wrote Transnation, seeking a new easement or money damages. When her claim was denied, Michak filed suit against Transnation, asserting breach of contract. Michak contended that Transnation "had failed to uncover the release of this easement when it prepared its Commitment," that it had thus "breached its commitment for title insurance," and that it was "obligated under its Commitment ... to acquire or create the interest of this easement." CP at 4.
On January 13, 2000, the trial court granted Transnation's motion for summary judgment. Michak appealed, and in a split decision, the Court of Appeals reversed the trial court, remanding for further proceedings. Michak v. Transnation Title Ins. Co., 108 Wash.App. 412, 31 P.3d 20 (2001).
(1) Did anything in the Commitment preclude Transnation from amending the legal description of the property in Schedule A prior to issuing its Policy?
(2) If not, by initialing at closing the one-page legal description of the property that had been attached to the Supplemental, did Michak accept Transnation's amendment of the legal description in Schedule A?
Standard of Review. The trial court dismissed on summary judgment Michak's breach of contract claim against Transnation. Appellate review of summary judgment is de novo; the reviewing court engages in the same inquiry as the trial court and views the facts and the reasonable inferences from those facts in the light most favorable to the nonmoving party. Wilson v. Steinbach, 98 Wash.2d 434, 437, 656 P.2d 1030 (1982). A motion for summary judgment is properly granted where "there is no genuine issue as to any material fact and... the moving party is entitled to a judgment as a matter of law." CR 56(c). Where the moving party brings forth admissible evidence supporting its claimed absence of any issue of material fact, the "adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial." CR 56(e) (emphasis added). A court weighing a summary judgment motion thus places "the emphasis ... upon facts and regards a fact as "an event, an occurrence, or something that exists in reality." Grimwood v. Univ. of Puget Sound, Inc., 110 Wash.2d 355, 359, 753 P.2d 517 (1988) (citing WEBSTER'S THIRD NEW INT'L DICTIONARY 813 (1976)).
Permissibility of Transnation's Amendment of Schedule A. Transnation argued in its summary judgment motion that Michak could not rely for coverage on the original Commitment because she had initialed at closing the one-page legal description of the property that had been attached to the Supplemental, amending Schedule A. But Michak countered that Transnation had failed to "inform [her] of any change in the Commitment," CP at 142, and had thus changed the Commitment unilaterally.4 Having failed to persuade the trial court, Michak argued to the Court of Appeals that "Transnation had a contract obligation under the Commitment ... to provide her a Title Policy consistent with the property described in its Schedule A or as amended by Supplement." Br. of Appellant at 7. To support her point that Transnation was not entitled to amend the Commitment, she quoted the following stipulation found in the Commitment:
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