Title Ins. Co. of Minnesota v. Christian

• Decision Date: 15 June 1976
• Docket Number: No. 20243,20243
• Citation: 267 S.C. 71,226 S.E.2d 240
• Parties: TITLE INSURANCE COMPANY OF MINNESOTA, Appellant, v. Frank L. CHRISTIAN, III, and Christian and Mann, Attorneys at Law, P.A., Respondents.
• Court: South Carolina Supreme Court

Page 240

226 S.E.2d 240

267 S.C. 71

TITLE INSURANCE COMPANY OF MINNESOTA, Appellant, v. Frank L. CHRISTIAN, III, and Christian and Mann, Attorneys at Law, P.A., Respondents.

No. 20243.

Supreme Court of South Carolina.

June 15, 1976.

J. Reese Daniel, Columbia, for appellant.

James L. Mann, II, Columbia, for respondents.

GREGORY, Justice:

This action was commenced by the service of a summons and complaint on May 22, 1972 wherein the appellant, a title insurance company, sought to recover actual damages against the respondents, attorneys, for failure to exercise reasonable professional skill. The respondents served an answer to the complaint on June 21, 1972 raising three defenses.

The respondents were a professional association of practicing attorneys at law. Respondent Christian, on behalf of the firm, signed an application to the appellant for a binder for a policy of title insurance insuring a mortgage to be given to First Citizens Bank and Trust Company of South Carolina by Town and County Builders, Inc. to secure an Eight Thousand ($8000.00) Dollar loan to Town and County. The application showed no exceptions or defects in the title. The appellant issued its usual form of Mortgagee's Policy to the bank insuring that the bank's mortgage was a first lien on the real property described therein.

Thereafter, one J. R. Lanier commenced an action to foreclose a mortgage on the same property, with the exception of one lot, and the Lanier mortgage was held to have priority over the bank's mortgage as to seven (7) of the eight (8) lots. The Lanier mortgage was of record prior to the respondents' certificate to the appellant. The appellant subsequently paid the bank Seven Thousand ($7000.00) Dollars and commenced this action against the respondents for failing to report the Lanier mortgage on the application for the title insurance binder.

The appellant served notice of motion for summary judgment upon the respondents, attaching affidavits in support thereof. Respondents filed no opposing affidavits relying solely on their answer. The motion was argued before Judge Mason, February 6, 1970 and orally denied.

Thereafter, James L. Mann, II, was substituted as counsel for the respondents and J. Reese Daniel was substituted as counsel for appellant. The respondents moved to make First Citizens Bank and Trust Company (hereinafter referred to as the Bank) a party to the action, and served an affidavit in support of the motion. This motion was argued before Judge Mason on April 10, 1974 and the appellant's motion for summary judgment was re-argued in the light of the additional affidavit supplied by the respondents by substituted counsel. Judge Mason thereupon issued an oral order again denying the appellant's motion for summary judgment on the grounds that the matter presented an issue of fact for jury determination. The motion to add a party was not pursued.

Thereafter, on September 8, 1975 the case came on for trial before the Honorable Legare Bates and a jury. At the conclusion of the appellant's testimony, Judge Bates granted respondents' motion for an involuntary nonsuit.

Notice of intention to appeal was served on September 10, 1975. Appellant's exceptions center around two main issues: the denial of its motions for summary judgment and the granting of respondents' motion for nonsuit.

Appellant alleges that the respondents made no showing of factual issues and the answer, if true, did not constitute a legal defense and that they were, thus, entitled to summary judgment as a matter of law. Our Circuit Court Rule 44, providing for summary judgment, is modeled after Rule 56 of the Federal Rules of Civil Procedure. Thevenot v. Commercial Travelers Mutual Accident Association of America, 259 S.C. 235, 191 S.E.2d 251 (1972). Rule 44(d) provides that when a motion for summary judgment is made and supported by affidavits, the party opposing the motion (here, respondents) 'may not rest upon the mere allegations or denials' of its pleadings. In construing the identical provision of Rule 56 of the Federal Rules of Civil Procedure, the United States Fifth Circuit Court of Appeals held that '(the) party opposing summary judgment need not come forward in any way if the moving party has not supported his motion to the point of showing that issue is a sham.' Brunswick Corp. v. Vineberg, 370 F.2d 605 (5th Cir. 1967). It is also clear from the Advisory Committee's Notes on the 1963 Amendment to Federal Rule 56 that 'where the evidentiary matter in support of the motion does not establish the absnece of a genuine issue, summary judgment must be denied, even if no opposing evidnetiary matter is presented.'

Although respondents offered no affidavits in opposition to appellant's motion, their answer in the first defense alleged knowledge by the insured, First Citizens, of the prior lien and that the prior lien had been given pursuant to instructions by an officer of the Bank. The title insurance policy attached to and made part of the complaint under 'Conditions and Stipulations' contains the following pertinent exclusions of liability:

'3(d) Defects, liens, encumbrances, adverse claims against the title as insured or other matters (1) created, suffered, assumed or agreed to by the Insured claiming loss or damage; or (2) known to the Insured Claimant at the date such Insured Claimant acquired an estate or interest by this policy and not known to the Company or not shown by the public records.'

Thus, knowledge of the prior lien by the Bank, such lien allegedly being given pursuant to instructions by a Bank officer, becamd a material factual issue as it relates to appellant's liability for the Seven Thousand ($7000.00) Dollars which it paid to be Bank.

Appellant offered nothing in the affidavits in support of its motion for summary judgment to answer factually one way or the other the substantial factual issue thus raised by respondents. The only averment relating to possible defenses available to respondents was in the affidavit by the Title Officer of appellant company to the effect he 'investigated to determine whether a defense to said action existed, but could discover none.' Although the issue of knowledge of the prior lien by the Bank could have been effectively vitiated by a simple sworn denial by the Bank's vice president in his affidavit submitted in support of appellant's motion for summary judgment, no denial was...