Miss. Valley Title Ins. Co. v. Thompson, 12–16188.
| Decision Date | 29 September 2015 |
| Docket Number | No. 12–16188.,12–16188. |
| Parties | MISSISSIPPI VALLEY TITLE INSURANCE COMPANY, Wells Fargo Bank, N.A., Old Republic National Title Insurance Company, 400 Second Avenue South Minneapolis, MN 55401, Plaintiffs–Appellees, v. J. Garrison THOMPSON, Defendant–Appellant. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
Charles C. Simpson, III, Lawrence Jean Seiter, Johnstone Adams Bailey Gordon & Harris, LLC, Mobile, AL, for Plaintiff.
James Brian Rossler, Rossler Law Firm, LLC, Mobile, AL, Larry William Harper, Porterfield Harper Mills Motlow & Ireland PA, Birmingham, AL, Philip Henry Pitts, Law Offices of Pitts Pitts & Williams, Selma, AL, for Defendant.
Appeal from the United States District Court for the Southern District of Alabama.
Before TJOFLAT, Circuit Judge, MOORE,* and SCHLESINGER,** District Judges.
On June 19, 2014, this Court—confronted by a question of first impression under Alabama law, and cognizant of the deference due state courts in our federalist system of dual sovereignty—certified the following question to the Alabama Supreme Court:
Is an attorney whom an insurance company hires as an attorney agent providing a “legal service” within the meaning of Ala.Code § 6–5–574 when he performs a title search, forms an unwritten opinion about the status of title, and then acts on that unwritten opinion by issuing a commitment to insure or an insurance policy?
See Miss. Valley Title Ins. Co. v. Thompson (Miss. Valley I), 754 F.3d 1330, 1334–35 (11th Cir.2014). The Alabama Supreme Court subsequently declined to answer the certified question, “as it had every right to do and has done on occasion before.” Price v. Time, Inc., 416 F.3d 1327, 1334 (11th Cir.2005). Yet, this declination leaves the three federal judges on this panel the unenviable task of considering a novel question of state law.
As the Eleventh Circuit has explained, however, a federal court should generally undertake to answer a novel question of state law only when it is necessary to do so. See, e.g., Blue Cross & Blue Shield of Ala., Inc. v. Nielsen, 116 F.3d 1406, 1413 (11th Cir.1997) (). This facet of cooperative federalism is “especially important” when the state law issue “will affect the rights of ... many of the state's citizens” and concerns “a subject matter that falls squarely within the zone of traditional state regulatory concerns.” See id. Accordingly, after reconsideration of the facts and law in this case, we find that it is unnecessary at this juncture to answer the certified question because there exists a genuine dispute of material fact regarding a preliminary (and dispositive) issue: the nature of the parties' relationship.
The record is presently insufficient to determine whether the parties entered into an attorney-client relationship or a principal-agent relationship when Mississippi Valley hired Thompson as an attorney agent. Accordingly, we will not pass on the certified question regarding whether Thompson's conduct does or does not constitute the provision of legal services, because if the parties never entered into an attorney-client relationship, then Thompson's conduct is irrelevant. We therefore remand this case to the district court for further proceedings to resolve the nature of the parties' relationship.
Thompson is an attorney practicing law in Alabama. He has been a member of the Alabama State Bar and licensed to practice law in the state since 1963. In February 2000, Mississippi Valley hired him as an “attorney agent,” authorized to perform title searches and to issue title insurance commitments and policies on behalf of Mississippi Valley. During his tenure, Thompson made two mistakes that form the basis of this action.
In 2001, Richard and Elizabeth Rabb (“the Rabbs”) sought to procure a loan from CTX Mortgage Company (“CTX”) with respect to the Rabbs' property.1 Thompson performed a title search on the property, yet he overlooked a prior mortgage on the property that had been recorded in 1997 by Marion Bank & Trust Company (“Marion Bank”). Thompson thereafter failed to except Marion Bank's first mortgage from coverage when he issued a commitment for title insurance and a title insurance policy on the Rabbs' property, thus incorrectly insuring that CTX held the first mortgage lien position. Then, in 2003, the Rabbs sought to procure an additional loan from Marion Bank.
Thompson again performed a title search on the property; he failed to except the 2001 CTX mortgage from the title insurance commitment, although the subsequently issued title insurance policy did except that mortgage.
The Rabbs eventually defaulted on their loan payments, and Marion Bank held a preferred position against Wells Fargo. Based on the faulty 2001 policy, Mississippi Valley was left exposed to payment to Wells Fargo. This exposure was potentially exacerbated by the faulty 2003 commitment to Marion Bank.
Mississippi Valley brought a diversity suit against Thompson in September 2011 for the mistakes he made in 2001 and 2003. The lawsuit alleges that Thompson breached the parties' contractual agreement by failing to except the prior mortgages before issuing the title insurance commitments and policies and that, pursuant to the contractual agreement, Thompson agreed to indemnify Mississippi Valley for any loss the company incurred due to his mistakes.
Thompson moved for summary judgment, arguing that he is a legal service provider and provided legal services to Mississippi Valley when he performed title searches, formed unwritten opinions as to the insurability of title, issued commitments to insure, and issued title insurance policies based thereon. Accordingly, Thompson argued that Mississippi Valley's suit was time-barred under the Alabama Legal Services Liability Act (“ALSLA”), Ala.Code § 6–5–570 et seq., which provides a two- or four-year statute of limitations for “legal service liability actions against a legal service provider.” Id. § 6–5–574(a).2
The district court denied his motion and instead granted partial summary judgment to Mississippi Valley on the issue of liability. The district court agreed with Mississippi Valley that under Alabama law Thompson's conduct did not constitute the provision of legal services. Therefore, the less-stringent statute of limitations governing principal-agent relationships set forth in Ala.Code § 6–2–6 applied and did not bar Mississippi Valley's suit. The district court further held that Thompson breached the parties' contractual agreement, giving rise to an indemnity obligation. Thereafter, the banks involved in the lawsuit, Wells Fargo and Marion Bank, entered into a settlement of the underlying claims, and the district court entered judgment against Thompson in the amount of $94,697.20. Thompson then initiated this appeal.
On appeal, Thompson argues that the district court erred in concluding that he did not provide legal services to Mississippi Valley, a conclusion that foreclosed his statute of limitations defense under Ala.Code § 6–5–574. Mississippi Valley counters that the district court correctly rendered judgment in its favor after determining that the suit was not time-barred and Thompson had no other defenses.
Whether Thompson's actions constitute “legal services” presents an issue of first impression under Alabama law. Miss. Valley I, 754 F.3d at 1334–35. As such, we certified the question to the Alabama Supreme Court. Id.; see Nielsen, 116 F.3d at 1413 (). That court, however, declined to answer the question, and we are therefore tasked with considering this issue.
We review a district court's grant of summary judgment de novo, applying the same legal standard as the district court and “ ‘construing the facts and drawing all reasonable inferences therefrom in the light most favorable to the non-moving party.’ ” Josendis v. Wall to Wall Residence Repairs, Inc., 662 F.3d 1292, 1314 (11th Cir.2011) (quoting Centurion Air Cargo, Inc. v. United Parcel Serv. Co., 420 F.3d 1146, 1149 (11th Cir.2005) ). We will affirm a grant of summary judgment if the movant has shown, based on our review of the entire record, “that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). Further, a district court's interpretation and application of a statute of limitations presents a legal question that this Court reviews de novo. United States v. Gilbert, 136 F.3d 1451, 1453 (11th Cir.1998).
The critical question in this case is whether Thompson was providing legal services to Mississippi Valley when he carried out his duties as an attorney agent for the company. The answer to this question determines which statute of limitations applies to Mississippi Valley's claims against Thompson.
If Thompson was providing legal services to Mississippi Valley, then the ALSLA's statute of limitations applies. The applicable provision covers “[a]ll legal service liability actions against a legal service provider” and bars all suits arising more than four years after “the act or omission or failure giving rise to the claim” occurs. Ala.Code § 6–5–574(a).
If Thompson was not providing legal services to Mississippi Valley, then the parties simply had a principal-agent relationship, and the statute of limitations governing this species of relationship applies. The applicable provision states that the limitations period “does not commence to run until the liability of the principal for the act or omission of such ... agent is ascertained by an action of the party aggrieved against the principal.” Id. § 6–2–6. Thus, if...
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