Tess v. Lawyers Title Ins. Corp.

• Decision Date: 17 January 1997
• Docket Number: No. S-95-608,S-95-608
• Citation: 251 Neb. 501,557 N.W.2d 696
• Parties: John C. TESS, Appellant, v. LAWYERS TITLE INSURANCE CORPORATION, a Virginia Corporation, and Dakota Title and Escrow Co., Appellees.
• Court: Nebraska Supreme Court

Page 696

557 N.W.2d 696

251 Neb. 501

John C. TESS, Appellant, v. LAWYERS TITLE INSURANCE CORPORATION, a Virginia Corporation, and Dakota Title and Escrow Co., Appellees.

No. S-95-608.

Supreme Court of Nebraska.

Jan. 17, 1997.

Syllabus by the Court

1. Judgments: Jurisdiction: Appeal and Error. When a jurisdictional question does not involve a factual dispute, its determination is a matter of law, which requires an appellate court to reach a conclusion independent from the decisions made by the lower courts.

2. Summary Judgment. Summary judgment is proper only when the pleadings, depositions, admissions, stipulations, and affidavits in the record disclose that there is no genuine issue as to any material fact or as to the ultimate inferences that may be drawn from those facts and that the moving party is entitled to judgment as a matter of law.

3. Jurisdiction: Final Orders: Appeal and Error. For an appellate court to acquire jurisdiction of an appeal, there must be a final order entered by the court from which the appeal is taken. Conversely, an appellate court is without jurisdiction to entertain appeals from nonfinal orders.

4. Final Orders: Appeal and Error. Three types of final orders may be reviewed on appeal: (1) an order which affects a substantial right and which determines the action and prevents a judgment, (2) an order affecting a substantial right made during a special proceeding, and (3) an order affecting a substantial right made on summary application in an action after a judgment is rendered.

5. Final Orders: Words and Phrases. To be final, an order must dispose of the whole merits of the case. When no further action of the court is required to dispose of a pending cause, the order is final. If the cause is retained for further action, the order is interlocutory.

6. Final Orders: Dismissal and Nonsuit: Parties: Appeal and Error. An order which effects a dismissal with respect to one of multiple defendants in an action is a final, appealable order as to the defendant dismissed.

7. Final Orders: Dismissal and Nonsuit: Actions: Appeal and Error. An order which effects a dismissal with prejudice of one of multiple causes of action is a final, appealable order as to that cause of action.

8. Summary Judgment: Appeal and Error. In reviewing a summary judgment, an appellate court views the evidence in a light most favorable to the party against whom the judgment is granted and gives such party the benefit of all reasonable inferences deducible from the evidence.

9. Summary Judgment: Proof. The party moving for summary judgment has the burden to show that no genuine issue of material fact exists and must produce sufficient evidence to demonstrate that the moving party is entitled to judgment as a matter of law.

10. Negligence: Proof. In order to succeed in an action based on negligence, a plaintiff must establish the defendant's duty, a breach of that duty, proximate causation, and damages.

11. Title: Insurance: Agents. Title insurance companies and their agents are required to exercise the degree of skill and knowledge normally possessed by members of the profession in good standing in the locality concerning preliminary title information which is transmitted to their customers.

12. Trial: Proximate Cause: Evidence. The issue of proximate cause, in the face of conflicting evidence, is ordinarily a question for the trier of fact.

Vicki L. Boone, of Gunderson Law Offices, on brief, Omaha, for appellant.

Robert J. Becker, of Stalnaker, Becker, Buresh, Gleason & Farnam, P.C., Omaha, for appellees.

WHITE, C.J., and CAPORALE, FAHRNBRUCH, LANPHIER, WRIGHT, CONNOLLY, and GERRARD, JJ.

GERRARD, Justice.

Appellant, John C. Tess, seeks further review from the Nebraska Court of Appeals' summary dismissal of his appeal of a district court order sustaining summary judgment in favor of appellees, Lawyers Title Insurance Corporation and Dakota Title and Escrow Co. For the reasons stated herein, we conclude that the district court order sustaining appellees' motion for summary judgment, which in effect completely dismissed from the lawsuit one of two defendants and completely dismissed one of two causes of action pled, is a final, appealable order. As such, the Court of Appeals erred in summarily dismissing Tess' appeal. However, upon consideration of the merits, we affirm the judgment of the district court.

I. FACTUAL BACKGROUND

In the summer of 1986, Tess and his now former wife entered into negotiations with Herbert Osborne, now deceased, a real estate broker and developer, for the purchase of an 80-acre tract of land located on what was at that time the northwest outskirts of Omaha. Unable to afford the entire tract, Tess offered to purchase a 20-acre portion located on the corner of 168th Street and West Maple Road. Osborne readily agreed to Tess' proposal, as he had other prospective buyers interested in purchasing 10-acre portions of the same tract.

Osborne acted in several capacities during this transaction. He was the seller and trustee of the property, as well as Tess' lender and real estate agent. In addition, Osborne and his partner, Charles Rasmussen, were longtime clients of Dakota Title. On September 3, 1986, Osborne submitted an application for title insurance with respect to the property Tess intended to purchase to Dakota Title, the local agent for Lawyers Title. On this application, Osborne indicated that the parties to be insured were John C. and Maureen C. Tess.

The title insurance commitment issued to Osborne stated an effective date of September 9, 1986, and failed to recite that the parcel of land at issue was subject to any protective covenants. Further, the title insurance commitment provided that Dakota Title was to be notified prior to the closing of the transaction, so that the status of title could be updated. Tess does not recall ever receiving the title insurance commitment.

Notwithstanding the fact that the title insurance commitment recited an effective date of September 9, 1986, a Dakota Title document described as a title binder search sheet and bearing the initials "EP" indicates that the title search on the property at issue was in fact conducted on September 11. Edwin Peabody, Dakota Title's former vice president and a licensed abstracter and title agent, claimed to have no recollection of the specific facts concerning this title search. However, Peabody explained the likely reason for the discrepancies between the effective date of the commitment for title insurance and the date the search was conducted in this matter was that Dakota Title would normally backdate title insurance commitments to reflect the delay expected between the recording of an instrument and its appearance in the index of the register of deeds.

The record also reflects that on the same day Dakota Title conducted its title search in regard to Tess' property, Osborne and Rasmussen executed protective covenants with respect to the entire 80-acre tract of land at issue. Peabody notarized the execution of these protective covenants. The covenants recite that they are to run with the land and bind all present and future owners. The covenants provide, in pertinent part, that the properties may only be used for residential and farming purposes, and specifically proscribe commercial farming and restrict the number of horses and ponies permitted on each lot. The covenants were recorded on September 12, 1986.

When Osborne divided the 80-acre tract for sale, he parceled out Tess' 20 acres and five other tracts roughly 10 acres each. Dakota Title prepared title insurance commitments for each of these tracts at approximately the same time it prepared the title insurance commitment for Tess. Only the commitments prepared listing Tess and his then father-in-law and mother-in-law as insureds failed to report the existence of the protective covenants. Title insurance commitments listing all of the other purchasers as insureds, all with the effective dates of September 11, 1986, recite the existence of the protective covenants even though the covenants were not recorded until September 12.

Tess was not represented by an attorney during this sale. Instead, Tess said he relied on Osborne, as the experienced real estate professional, to be fair and aboveboard during the entire transaction. At closing on October 1, 1986, Tess admitted seeing a warranty deed executed in his favor which recited that the property was subject to protective covenants of record. Tess said that he questioned Osborne about the covenants and told Osborne that he wanted to retain an attorney before proceeding. According to Tess, Osborne persuaded him that he did not need to hire an attorney and that the covenants did not apply to his 20-acre parcel, but instead pertained only to the 10-acre parcels. Tess closed on the property on October 1.

Dakota Title was not notified of the real estate closing date and did not conduct an updated search of title prior to the closing. The Lawyers Title insurance policy issued with Tess as the insured, effective October 7, 1986, notes Tess' recorded deed and mortgage of October 7, but the protective covenants are not shown as exceptions on the policy.

From 1986 to 1993, Tess lived in the farmstead house on the property and operated a boarding stable. In late 1992, Tess was approached by a representative of Emeth, Inc., and entered into negotiations for the sale of his property. When Emeth discovered the existence of the protective covenants on the eve of closing, it backed out of a proposed sale.

Tess filed suit against Lawyers Title and Dakota Title alleging two causes of action: (1) breach of the contract for title insurance and (2) negligence in regard to appellees' failure to either discover or disclose the existence of the protective covenants. On September 26, 1994, Dakota Title moved the court for summary judgment, and Lawyers Title moved the court for partial summary judgment....