Odom v. Mississippi Valley Title Ins. Co.

• Decision Date: 24 May 1991
• Citation: 582 So.2d 1154
• Parties: Frederick W. ODOM v. MISSISSIPPI VALLEY TITLE INSURANCE COMPANY, et al. 2900311.
• Court: Alabama Court of Civil Appeals

Page 1154

582 So.2d 1154

Frederick W. ODOM v. MISSISSIPPI VALLEY TITLE INSURANCE COMPANY, et al.

2900311.

Court of Civil Appeals of Alabama.

May 24, 1991.

John W. Parker and Michael S. McNair of Parker & McNair, Mobile, for appellant Frederick W. Odom.

William M. Lyon, Jr. and Douglas L. Anderson of McFadden, Lyon, Willoughby & Rouse, Mobile, for appellee Mississippi Valley Title Ins. Co.

E.E. Ball, Bay Minette, for appellees Bobby J. Rockhold and Lois Rockhold.

THIGPEN, Judge.

This is an action by a mortgagor (Frederick Odom) against a title insurance company (Mississippi Valley Title Insurance Company or MVT) for breach of contract, and by Odom against Bobby J. Rockhold and Lois Rockhold for fraud and breach of lease agreement.

Odom and Rockhold were both in business building swimming pools. They entered into an oral agreement whereby Odom would construct a building on Rockhold's property from which they could both operate their business. Approximately two years after the building was completed, Rockhold informed Odom of the existence of a judgment against the aforementioned property that had existed for some five years and, at that time, was in excess of $40,000. Rockhold advised Odom that the creditor, Heldor Industries, Inc., was preparing to levy and execute its judgment against the property, and that Odom could protect his interest by purchasing the property from Rockhold for $100,000. An agreement was reached whereby Odom would purchase the property for said $100,000 with a down payment of $15,000, and Rockhold would remain on the property pursuant to a lease back provision for $600 per month paid to Odom. Odom secured financing from Alabama Federal Savings & Loan Association, later Secor Bank, to purchase the property. Apparently the understanding between Odom and Rockhold was that the down payment on the property was to be used by Rockhold to satisfy the Heldor judgment and, before closing on the property, Odom gave a check for $15,000 to Rockhold's attorney, Norm Davis, which contained language indicating that it was for "full and final settlement" of the judgment on the property. The remaining amount of the purchase price was paid at the closing and the property was conveyed from Rockhold to Odom.

Odom purchased title insurance for himself and for his lender, Secor Bank, from MVT. The record reflects that MVT knew of the Heldor judgment prior to closing, but believed that it was to be satisfied, though MVT never received any written cancellation of the judgment and did not take further action to ascertain whether the judgment had been satisfied. MVT insured that the property was free of all liens and encumbrances. Unbeknownst to Odom, Heldor refused the $15,000 offer to satisfy the judgment. After the attempt to satisfy the judgment was unsuccessful, Davis tendered the $15,000 to Rockhold, who spent the money without notifying MVT or Odom. Odom learned that the judgment had not been satisfied when he received a letter from Heldor's attorney, Russell Terry, informing him of Heldor's intent to execute the judgment against the property he had purchased from Rockhold. At this point, Odom contacted MVT to inform it of the Heldor judgment as well as some delinquent property taxes due. MVT paid the property taxes but could not reach a satisfactory agreement with Heldor. In fact, it was not until over a year after Odom had requested that MVT satisfy the Heldor judgment, three weeks prior to the trial which gave rise to this appeal, that MVT reached an agreement with Heldor and met its obligation to discharge the judgment.

During the interim, Odom began to experience financial difficulties, compounded by Rockhold's failure to pay his $600 per month rent. Odom attempted to sell the property, as he was unable to make the mortgage payments. Odom was unable to sell the property. At trial, Odom maintained that it was the existence of the Heldor judgment that prevented his being able to sell the property. MVT disputed this, arguing that the judgment was not the cause of Odom's financial trouble and, further, offering evidence of personal judgments and tax liens against Odom which also encumbered the property. Secor Bank finally foreclosed on the property against Odom.

The jury returned a verdict in favor of MVT and in favor of Rockhold on the fraud claim, and in favor of Odom and against Rockhold for breach of the lease agreement in the amount of $1200. Odom filed a motion for a new trial asserting that the verdict in favor of MVT was against the great weight and preponderance of the evidence; that it was inconsistent with the court's directed verdict; and that it was the product of bias or improper motive as to the jury's forewoman who, at the conclusion of the trial, disclosed that she knew MVT's counsel. Odom also filed a motion for judgment notwithstanding the verdict asserting that the jury's verdict was inconsistent with the trial court's directed verdict and that, notwithstanding the directed verdict, the jury effectively awarded him zero damages. The trial court denied these motions and Odom appeals.

Odom enumerates six issues for our consideration:

1. Did the trial court err in failing to grant Odom's motions for new trial and judgment notwithstanding the verdict in light of the inconsistencies of the verdicts?

2. Did the trial court err in charging the jury on the issue of damages for the breach by MVT of its policy of title insurance?

3. Did the trial court err in granting summary judgment in favor of MVT on Odom's claim for bad faith refusal to pay a claim?

4. Did the trial court err in failing to grant Odom's motion for a new trial based on the improper conduct of the jury forewoman?

5. Is the verdict in favor of Rockhold on the issue of fraud against the great weight and preponderance of the evidence?

6. Is the verdict awarding $1200 to Odom based on his lease agreement with Rockhold contrary to law and against the weight and preponderance of the evidence in this case?

It is well settled that, in Alabama, when a jury's verdict is inconsistent it should be set aside and a new trial should be granted. To find in favor of a plaintiff and then to award no damages is inconsistent as a matter of law. For the trial court not to afford a plaintiff a new trial when faced with an inconsistent verdict is reversible error. Clements v. Lanley Heat Processing Equipment, 548 So.2d 1345 (Ala.1989); see also Ward v. Diebold, Inc., 486 So.2d 1261 (Ala.1986), and Monteleone v. Trail Pontiac, Inc., 395 So.2d 1003 (Ala.Civ.App.1980), cert. denied, 395 So.2d 1005 (Ala.1981).

For the trial court to direct a verdict in favor of Odom and the jury to award zero damages is clearly inconsistent and, therefore, it was reversible error to deny Odom's motion for a new trial. MVT maintains that the trial court did not direct a verdict in Odom's favor. We do not agree. The trial court could not have been clearer when, during an exchange with MVT's attorney, the court stated "I'm directing a verdict against your client for actual damages. Period. I don't want to hear anything more about that."

With regard...