Safeco Title Ins. Co. v. Reynolds, 83-1517

Decision Date11 May 1984
Docket NumberNo. 83-1517,83-1517
Citation452 So.2d 45
PartiesSAFECO TITLE INSURANCE COMPANY, a foreign corporation, Appellant, v. Charles E. REYNOLDS and Marguerite E. Reynolds, his wife, Appellees.
CourtFlorida District Court of Appeals

Stephen D. Hughes, Largo, for appellant.

William H. Walker, St. Petersburg, for appellees.

RYDER, Acting Chief Judge.

Safeco Title Insurance Company (hereinafter Safeco), the insurer and defendant below, appeals the amended final judgment which denied its alternative motions for a new trial or remittitur; confirmed the jury verdict of $50,000.00 in damages as to the breach of title insurance contract claim; and granted the Reynolds, the insureds and plaintiffs below, attorney's fees and costs in the respective amounts of $20,000.00 and $5,854.00. The Reynolds cross-appeal those portions of the same judgment which denied their motion for new trial as to their negligence claim and approved that part of the jury verdict which found negligence but did not award them any damages as to that cause of action.

The only issues which merit extended discussion concern the propriety of the jury's damages awards. 1 Upon examination of the record and the applicable law, we agree the trial court erred in not granting Safeco's motion for remittitur and the Reynolds' motion for a new trial.

In their original complaint, the Reynolds sought to recover damages they allegedly suffered due to Safeco's failure to disclose the existence of a duly recorded easement 2 and reciprocal parking agreement 3 which they alleged had a "substantial negative effect upon the market value" of their property. (Emphasis supplied). In an amended complaint filed by the Reynolds, they added a second count to their action which alleged they had "suffered business and commercial losses, including without limitation, the past, present and future loss of income and diminished the value of plaintiffs' investment, together with general damages" as the proximate result of Safeco's negligence in failing to make the required disclosures.

During the jury trial, the Reynolds' expert statistician testified that seven of the Reynolds' parking spaces were lost as a result of the reciprocal parking agreement, and the Reynolds' expert real estate appraiser testified that the loss of seven parking spaces reduced the market value of the affected property by $24,000.00. Safeco's expert appraiser testified that there was no reduction in the market value of the property because of the reciprocal parking agreement. Additionally, the Reynolds' expert statistician testified, partially relying on the properly admitted net income information testified to by an expert accountant, that Reynolds had suffered a loss of $14,289.00 in profits as a result of the encumbrances and would suffer a future loss, discounted back to its net present value of $43,362.00, for a total income loss of $57,651.00. Safeco presented its own expert accountant who testified to some extent that the Reynolds did not suffer any lost profits as a result of the existence of the encumbrances. Thereafter, as stated previously, the jury found for the Reynolds as to their title insurance policy claim and established "the loss in market value of the plaintiffs' real property caused by the existence of the encumbrances to be in the sum of $50,000.00;" the jury then also found for the Reynolds as to their negligence claim but determined "the plaintiffs' losses and damages to their business legally caused by the defendant's negligence to be in the sum of $0 dollars."

In the appeal, Safeco argues remittitur should have been granted because the measure of damages applicable where an insured owner suffers a loss as a result of encumbrances not disclosed by the title insurer is the difference between the market value of the property without the burden and its market value with the encumbrance, and the evidence presented by the Reynolds as to this amount of damages, even if accepted completely by the jury, only proved at most a $24,000.00 diminution in market value.

It is a well-settled and fundamental rule that "an insured [owner or mortgagee] is entitled to recover the actual loss or damage sustained from a defect, lien or encumbrance affecting his title which was not excepted from the policy's coverage." 1 Fla.Jur.2d Abstracts and Title Insurance § 39 (1977). See generally Annot., 60 A.L.R.2d 972, 975 (1958). There are two basic measurements for determining an insured owner's actual partial loss because of an encumbrance or encroachment not disclosed, with their particular application dependent upon the nature of the undisclosed burden and whether that burden can be removed: (1) diminution in market value (as stated above), and (2) the amount necessary to remove the existing encumbrance. 4 See generally 15A Couch on Insurance 2d § 57:184 (rev. ed. 1983). (Compare cases cited at footnote 4 with cases cited at footnote 5); 60 A.L.R.2d at 975; 46 C.J.S.Insurance § 1402 (1936); 44 Am.Jur.2d Insurance § 1566 (1982). The Reynolds chose to pursue the loss of market value as general damages in their contract action, see Guarantee Abstract & Title Insurance Co. v. St. Paul Fire and Marine Insurance Co., 216 So.2d 255 (Fla. 2d DCA 1968); accordingly, they had the burden of establishing the amount of this particular loss. Florida Homes Insurance Co. v. Braverman, 163 So.2d 512 (Fla. 3d DCA 1964).

Our examination of the record reveals the Reynolds' expert only testified that the property in question was reduced in value $24,000.00 because of the undisclosed reciprocal parking agreement. The jury was not at liberty to tack onto this figure an additional $26,000.00 in market value losses when there is no "evidence in the record which may be pointed out as constituting a reasonable foundation for the conclusion reached." Golden v. Morris, 55 So.2d 714 (Fla.1951). Moreover, although an insured owner may be able to recover consequential or special damages such as lost profits as damages for breach of a title insurance contract, Couch § 57:175; see generally Twyman v. Roell, 123 Fla. 2, 166 So. 215 (1936); Talisman Sugar Corp. v. Farmland Development Co., 156 So.2d 392 (Fla. 2d DCA 1963), the Reynolds were not entitled to the additional $26,000.00 award as lost profits because they did not plead for such special damages in their breach of title insurance contract claim. 5 Fla.R.Civ.P. 1.120; J. Ray Arnold Lumber Corp. v. Richardson, 105 Fla. 204, 141 So. 133 (1932); Ephrem v. Phillips, 99 So.2d 257 (Fla. 1st DCA 1957), cert. denied, 101 So.2d 816 (Fla.1958). Accordingly, because it appears from all the evidence presented at trial that the damages awarded by the jury on the first count are "grossly excessive," we grant a remittitur for the amount of the clearly definable excess of $26,000.00 but affirm the jury award for the balance of $24,000.00 E.g., Aylesworth v. London, 119 So.2d 816 (Fla. 2d DCA 1960). See also Renuart Lumber Yards, Inc. v. Levine, 49 So.2d 97 (Fla.1950).

As to the cross-appeal, the Reynolds argue a new trial should have been granted as to the negligence claim because the jury verdict which found no damages was clearly contrary to the weight of the evidence presented at trial. As an initial point, we note this court has recognized that an insured owner under a title insurance policy may sue his insurer in...

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