Peterson v. McCavic, 070201760

• Decision Date: 18 April 2012
• Docket Number: 070201760,070202244,A139691.
• Citation: 249 Or.App. 343,277 P.3d 572
• Parties: Robert PETERSON, Plaintiff–Respondent Cross–Appellant, v. Mark E. McCAVIC, an individual; Kristi McCavic, an individual; and Columbia River Electric, Inc., an Oregon corporation, Defendants, and Amerititle, Inc., an Oregon corporation, Defendant–Appellant Cross–Respondent. Bruce Fletcher and Judith Fletcher, Plaintiffs, v. Robert Peterson, Defendant. Robert Peterson, Third–Party Plaintiff–Appellant, Cross–Respondent, v. Mark E. McCavic, an individual; Kristi McCavic, an individual; and Columbia River Electric, Inc., an Oregon corporation, Third–Party Defendants, and Amerititle, Inc., an Oregon corporation, Third–Party Defendant–Respondent, Cross–Appellant.
• Court: Oregon Court of Appeals

249 Or.App. 343

277 P.3d 572

Robert PETERSON, Plaintiff–Respondent Cross–Appellant,

v.Mark E. McCAVIC, an individual; Kristi McCavic, an individual; and Columbia River Electric, Inc., an Oregon corporation, Defendants,andAmerititle, Inc., an Oregon corporation, Defendant–Appellant Cross–Respondent.

Bruce Fletcher and Judith Fletcher, Plaintiffs,

v.Robert Peterson, Defendant.

Robert Peterson, Third–Party Plaintiff–Appellant, Cross–Respondent,

v.Mark E. McCavic, an individual; Kristi McCavic, an individual; and Columbia River Electric, Inc., an Oregon corporation, Third–Party Defendants,andAmerititle, Inc., an Oregon corporation, Third–Party Defendant–Respondent, Cross–Appellant.

070201760, 070202244; A139691.

Court of Appeals of Oregon.

Argued and submitted Dec. 10, 2010.

Decided April 18, 2012.

Jonathan M. Radmacher, Portland, argued the cause for appellant-cross-respondent Amerititle, Inc. With him on the briefs was McEwen Gisvold LLP.

Gordon T. Carey, Jr., Portland, argued the cause and filed the briefs for respondent-cross-appellant Robert Peterson.

Before ORTEGA, Presiding Judge, and SERCOMBE, Judge, and LANDAU, Judge pro tempore.

ORTEGA, P.J.

Defendant Amerititle, Inc. appeals and plaintiff Robert Peterson crossappeals a judgment entered on a jury verdict in a case involving a real estate transaction that went bad because the wrong lot was conveyed. Having been found negligent following a jury trial on appeal, Amerititle challenges, among other things, the denial of its motions for directed verdicts on Peterson's negligence claims, the trial court's ruling that allowed Peterson's appraiser to offer an expert opinion on damages, and the trial court's denial of a motion for directed verdict as to Peterson's request for lost profits. Peterson's cross-appeal assigns error to the trial court's grant of summary judgment on his misrepresentation claim, the entry of a directed verdict on his claim for breach of contract, and the entry of a directed verdict on his breach of fiduciary duty claim. On Amerititle's appeal, we write only to address the negligence claims and the request for lost profits and reject Amerititle's remaining contentions without discussion. On Peterson's cross-appeal, we reverse the trial court's grant of summary judgment on Peterson's misrepresentation claim and reject Peterson's remaining contentions without discussion.

The undisputed and procedural facts are these. Peterson planned to purchase an empty lot, build a house, and then sell the property for a profit. That plan was thwarted, however, when it turned out that the lot conveyed to him was different from the one that he had intended to purchase. Unaware of the mix-up, Peterson began building a house on the lot that he did not own but thought he had purchased. Some months later, the owners of the lot sued Peterson for trespass and Peterson, in turn, brought third-party claims against the sellers and Amerititle, which acted as the escrow agent and title insurer for the transaction. Peterson also filed a separate action asserting the same claims against the sellers and Amerititle. The cases were consolidated, and Peterson eventually settled with the sellers and the owners of the lot and proceeded with his claims against Amerititle. After the trial court's pretrial dismissal of a number of Peterson's claims, Peterson's negligence claims went to the jury, which returned a verdict for Peterson. Amerititle appeals from the judgment entered on the jury verdict, and Peterson cross-appeals the dismissal of three of his claims.

In light of the applicable standards of review, we state the remaining facts in the light most favorable to Peterson. As noted, Peterson decided to buy a lot, build a house, and then sell the property for a profit. He met Mark McCavic, a developer, at River's Edge subdivision to view some empty lots. The subdivision had been platted in two separate phases: Phase I was platted first and contained 15 lots, and 1st Addition was platted several months later and contained 9 lots.¹ The two phases of the subdivision were located adjacent to each other and all of the lots fronted Summit Ridge Drive. At the time, there were no visible markers or monuments delineating the boundaries of the lots in either phase. Notably, Lot 8, Phase I was located about 50 feet from Lot 8, 1st Addition. Peterson viewed Lot 8, Phase I with Mark McCavic and decided to buy it. However, unbeknownst to Peterson, the Fletchers had already purchased that lot several months before. Nevertheless, at Mark McCavic's direction, Peterson proceeded to the local Amerititle office to sign an earnest money agreement to purchase Lot 8, Phase I.

Kristi McCavic (Mark McCavic's wife) prepared and e-mailed the earnest money agreement to Amerititle, whose escrow officer then presented the agreement to Peterson for review. The agreement listed the property as “Lot Number 8 (eight) in the River's Edge Subdivision Phase I in The Dalles, OR.” Peterson signed the agreement and deposited the earnest money with Amerititle, which then faxed the agreement with Peterson's signature to Kristi McCavic. She signed it and faxed it back to Amerititle. At some point after Peterson and Kristi McCavic signed the earnest money agreement but before Amerititle's title examiner prepared the preliminary title report, the property description in the earnest money agreement was changed to “Lot Number 8 (eight) in the River's Edge subdivision 1st Addition, in The Dalles, OR.” (Emphasis added.) The parties were not informed of the change, nor did they sign a new agreement with the altered description. Instead, the signature page from the original agreement was simply affixed to the page of the altered agreement with the changed property description.

Amerititle prepared a preliminary title report and other closing documents for Lot 8, 1st Addition. A few days later, Amerititle faxed Peterson the closing documents with a cover sheet that stated, in part, “Enclosed please find [ ]closing papers on the purchase of the Lot in Wasco County.” Peterson signed them and wired the closing funds to Amerititle. The transaction closed and Peterson became the owner of Lot 8, 1st Addition.

Peterson began building a house on Lot 8, Phase I, which he believed he had purchased in accordance with the original earnest money agreement. Construction continued for several months before the Fletchers, the owners of the lot, informed Peterson of his mistake.

As noted, the Fletchers eventually filed a complaint against Peterson for trespass. Peterson answered and filed a third-party complaint against the McCavics and Amerititle, and asserted identical claims in a separate action. His claims were for indemnity, contribution, breach of contract, breach of the implied duty of good faith and fair dealing, negligence, breach of fiduciary duty, unlawful trade practices, and misrepresentation. After the cases were consolidated, Peterson settled with the Fletchers and the McCavics and proceeded against Amerititle.

Before trial, the court awarded summary judgment to Amerititle on Peterson's claims for indemnity, contribution, unlawful trade practices, and misrepresentation. At the close of the evidence, Amerititle moved for directed verdicts on Peterson's remaining claims. The court granted directed verdicts against Peterson's breach of fiduciary duty and breach of contract claims, but denied Amerititle's motions on the negligence claims. Accordingly, those claims went to the jury. The jury, through use of a special verdict form, indicated that it found Amerititle negligent in (1) receiving the earnest money agreement but not preparing escrow instructions and closing documents to convey the lot that was subject to the agreement, (2) issuing a title report and title insurance for the wrong lot, (3) not retaining all documents received pertaining to the transaction, (4) destroying or disposing of documents without the knowledge of the parties, and (5) negligently misrepresenting that the property description in the closing documents was an accurate description of the lot that the parties intended to convey. The jury found Amerititle liable and calculated that Peterson suffered damage of $56,904 for expenses and $73,096 for lost profits. The jury concluded, however, that Amerititle was only 45 percent negligent; it also determined that the McCavics were 40 percent negligent and Peterson was 15 percent negligent. Accordingly, the court entered a judgment against Amerititle for $58,500, its share of the damages.

As noted on appeal, Amerititle assigns error to, among other rulings, the trial court's denial of its motions for directed verdicts on Peterson's negligence claims and the trial court's denial of a motion for directed verdict as to Peterson's request for lost profits. Peterson's cross-appeal challenges the trial court's grant of summary judgment on his misrepresentation claim and directed verdicts on his claims for breach of contract and breach of fiduciary duty. We first address the appeal and then the cross-appeal, reversing the judgment on the misrepresentation claim and affirming all of the other rulings.

I. THE APPEAL

A. Negligence

We begin with Amerititle's first assignment of error, in which it contends that the trial court erred in denying its motion for directed verdict on Peterson's claim that Amerititle was negligent

“in receiving the parties' earnest money agreement, but not preparing escrow instructions and documents of conveyance therefrom which would effect conveyance of the lot, and in issuing a preliminary title report and title insurance on property the parties did not agree to convey.”

“A directed verdict is appropriate only if there is a complete absence of proof on an essential issue or when there is no conflict in the evidence and it is susceptible of only one construction.” Malensky v. Mobay Chemical Corp., 104 Or.App. 165, 170, 799 P.2d 683 (1990), rev. den.,311 Or. 187, 808 P.2d 91 (1991)....