SOUTHERN LAND TITLE v. NORTH GEORGIA TITLE

• Decision Date: 07 October 2004
• Docket Number: No. A04A1935.,A04A1935.
• Parties: SOUTHERN LAND TITLE, INC. et al. v. NORTH GEORGIA TITLE, INC.
• Court: Georgia Court of Appeals

606 S.E.2d 43

270 Ga. App. 4

SOUTHERN LAND TITLE, INC. et al. v. NORTH GEORGIA TITLE, INC.

No. A04A1935.

Court of Appeals of Georgia.

October 7, 2004.

Nations Toman, Nutter & McKnight, David C. Nutter, Atlanta, for appellants.

Russell T. Bryant, Lawrenceville, for appellee.

ELDRIDGE, Judge.

North Georgia Title brought suit for breach of contract, negligent title examination, fraud, and punitive damages against David M. Wallace and Southern Land Title, Inc. North Georgia Title also sought to have Southern Land Title, LLC¹ declared the successor in interest to Southern Land Title, Inc. and to pierce the corporate veil of both. After a jury trial, a verdict was returned in favor of North Georgia Title in the amount of $64,000 against Wallace and Southern Land Title, Inc. for breach of contract, negligent title examination, and fraud. North Georgia Title elected to have judgment entered on the fraud count. The jury also found that the corporate veil of Southern Land Title, Inc. and Southern Land Title, LLC had been pierced and that a verdict against one of the defendants would be a verdict against all three. The jury found that North Georgia Title was not entitled to punitive damages. Wallace, Southern Land Title, Inc., and Southern Land Title, LLC appeal from the denial of their motion for judgment notwithstanding the verdict or new trial. Finding no error, we affirm.

A contract for the sale of residential property located at 1375 Lorenzo Drive, Atlanta, Fulton County was entered into between Samuel Eudovique, as seller, and Kevin Miller, as purchaser. In order to effectuate the closing of the property, North Georgia Title requested Southern Land Title, Inc. to perform a title examination on the property. Wallace was the sole shareholder and officer of Southern Land Title, Inc. and employed five employees. Wallace initially performed his title examination on November 9, 1998. At such time, the effective date of the records on file in Fulton County was September 15, 1998, and any documents filed after this date would not have shown up of record. In his title report, Wallace showed record title to be vested in Cynthia Matthew-Betts and showed, in addition to several fi.fa.s, two open deeds to secure debt on the property.

As the sales contract showed a different seller, North Georgia Title asked Wallace to recheck the deed records in Fulton County. Wallace rechecked the deed records and issued a second title report showing that record title was vested in Eudovique and listing the same exceptions to title that were shown in the first report.

As North Georgia Title prepared for closing, its employees found that the security deed given by Matthew-Betts in favor of Anekin Industries, which had been assigned to Cumberland Funding, remained open. After inquiry, Eudovique indicated that the loan had been satisfied and that he had the quitclaim deed from Cumberland Funding in his possession, which he had never recorded. Eudovique brought the Cumberland Funding quitclaim deed to closing on November 23, 1998, and it was recorded along with other documents executed at the closing in the deed records of Fulton County. At closing North Georgia Title, as agent for American Pioneer Title Insurance Company ("American Pioneer"), issued a policy of title insurance in favor of the purchaser's lender, SouthStar Funding, in the amount of $64,000. Such deed to secure debt was subsequently transferred to Ocwen Federal. Such title policy insured the period between the effective date and the date of closing [the "gap period"] during which documents which could affect the title to the property could have been filed and recorded but which would not be indexed or available for inspection by anyone performing a title examination.

In June 2000, American Pioneer received a claim order from Ocwen Federal, claiming that the quitclaim deed from Cumberland Funding was a forgery and, as a result thereof, Cumberland Funding's deed to secure debt on the property had not been extinguished, which had resulted in Cumberland Funding foreclosing on its deed to secure debt on October 6, 1998, during the "gap period." American Pioneer notified North Georgia Title of the claim. Upon investigation, it was discovered that, at the time of closing, Eudovique was not the correct owner of the subject property. By warranty deed dated August 9, 1998, and recorded August 10, 1998, Eudovique transferred the subject property to Sam's Ventures, Inc. By subsequent quitclaim deed dated August 27, 1998, and recorded August 28, 1998, Eudovique on behalf of Sam's Ventures transferred the subject property to Janis A. Miles who remained the record owner at the time of closing. Both of these transfers were prior to the effective date of Wallace's title report.² Based on this information, American Pioneer paid $64,000 to Ocwen Federal. Held:

1. Appellants allege that the trial court erred in failing to grant their motions for directed verdict and judgment notwithstanding the verdict on the common law fraud claim due to the absence of a tort because there was no evidence of damages.

In determining whether the trial court erred by denying [the appellants'] motions for a directed verdict and motions for judgment n.o.v., this court must view and resolve the evidence and any doubt or ambiguity in favor of the verdict. A directed verdict and judgment n.o.v. are not proper unless there is no conflict in the evidence as to any material issue and the evidence introduced, with all reasonable deductions therefrom, demands a certain verdict.

(Citation and punctuation omitted.) Irwin County v. Owens, 256 Ga.App. 359, 360(2), 568 S.E.2d 578 (2002).

In this case, North Georgia Title put up evidence of its actual damages. The evidence showed that North Georgia Title and American Pioneer entered into an Issuing Agency Contract by which North Georgia Title became an agent of American Pioneer for the purpose of issuing title insurance commitments, policies, and endorsements on its behalf. Under paragraph 6 B of the contract, North Georgia Title agreed to indemnify American Pioneer for any losses resulting from any errors or omissions in the abstracting or examination of titles by North Georgia Title, its employees, or its subcontractors....