Williams v. Consolvo, 870423
| Decision Date | 21 April 1989 |
| Docket Number | No. 870423,870423 |
| Parties | Vernon M. WILLIAMS v. Ernest C. CONSOLVO, et al. Record |
| Court | Virginia Supreme Court |
George H. Gray (Outland, Gray, O'Keefe & Hubbard, Chesapeake, on brief), for appellant.
William T. Webb, Jr. (Consolvo, Markowitz & Webb, Virginia Beach, on brief), for appellees Ernest C. Consolvo and Carl S. Markowitz, Individually, etc.
Russell R. Stallard, Norfolk, for appellee Hugh L. Stovall, Clerk, etc.
No briefs or arguments for appellees Gorin Felix Hatchett, Substitute Trustee and G & G Inv. Co., Inc.
Present: All the Justices.
In this appeal, we focus upon the aftermath of the misindexing of a deed of trust. On July 16, 1977, H. Thomas Altman and his wife, Patricia Altman (the Altmans), executed a deed of trust in which they conveyed certain property located in Norfolk, to Tucker St. Martin Coleman, trustee, to secure a $10,000 debt evidenced by a promissory note. On July 22, 1977, the deed of trust was delivered to the office of the Clerk of the Circuit Court of the City of Norfolk (Clerk), for recordation. It was properly recorded in the deed book; but it was not properly indexed.
Two years later, by deed of bargain and sale dated July 16, 1979, the Altmans, in consideration of $32,500, conveyed to Vernon M. Williams and his wife (hereinafter collectively Williams) the same property which was the subject of the 1977 deed of trust. The Altmans did not advise Williams of the existence of the deed of trust.
Williams was represented in the purchase of the property by the law firm of Ernest C. Consolvo and Carl S. Markowitz (the Consolvo Firm). The Consolvo Firm examined the title to the property. It found three prior deeds of trust; but it did not find the 1977 deed of trust which had been and, through the date of the title examination, remained improperly indexed. The 1979 deed of bargain and sale from the Altmans to Williams was recorded on July 17, 1979. The Consolvo Firm handled the closing on behalf of the Altmans as well as Williams.
The 1977 deed of trust remained misindexed until November 7, 1979. On that date, again unbeknownst to Williams, the Clerk properly indexed the deed of trust.
Williams did not learn about the existence of the deed of trust until he received a letter, dated November 29, 1979, from counsel for the noteholder. The letter stated that the note payments were in arrears and that foreclosure proceedings would be instituted unless arrangements were made to satisfy the outstanding debt. Williams advised the Consolvo Firm which, in turn, wrote to the Clerk notifying him of the misindexed deed of trust and demanding that the Clerk "discharge the lien and save [Williams] and the subject property harmless."
A series of communications ensued among counsel for the noteholder, the Clerk, counsel for the Altmans, and counsel for Williams. Although the noteholder threatened foreclosure, no such proceedings were instituted from November 1979, through May 1984. Thus, for a period of approximately five years, Williams was aware that the noteholder contended Williams was responsible for paying off the lien. The last letter, in the record, written on Williams' behalf by the Consolvo Firm is dated June 9, 1982. It is to the Clerk, renewing the original demand that the Clerk "take steps to insure that the lien of the subject Deed of Trust is released of record and that [Williams] and the property be protected from the attempted foreclosure of the said Deed of Trust."
In late April or early May 1984, counsel for the noteholder gave notice of foreclosure concerning the property. The Consolvo Firm declined to represent Williams. At no time did the Consolvo Firm ever advise Williams that he was a bona fide purchaser for value, that the property was not subject to the lien of the deed of trust, that Williams did not have to protect himself from the foreclosure, or that Williams would be a volunteer if he made any payments or arrangements with the trustee to prevent the foreclosure. Nevertheless, during the time Williams was represented by the Consolvo Firm, he made no payments to the noteholder.
In response to the notice of foreclosure, Williams retained the law firm of Outland, Gray, O'Keefe & Hubbard. In a letter dated May 7, 1984, George H. Gray advised counsel for the noteholder that Williams had retained him "in connection with the notice of Trustee's Sale ... of 7930 Bi County Road, Norfolk, Virginia on May 30, 1984." Gray requested a true copy of the note and an accounting of payments to enable Williams Gray wrote that after the information had been reviewed Gray would "discuss payment with" the noteholder's attorney.
The agreement reached between Williams and the noteholder was confirmed by letter dated May 31, 1984, from Gray to counsel for the noteholder. Gray wrote as follows:
In consideration of your ceasing foreclosure proceedings with the sale set for May 30, 1984 and to prevent foreclosure, my client, Vernon M. Williams, will commence making payments of $200.00 plus interest on the unpaid balance each month until the liability of the attorney who examined the title for Mr. Williams and the liability of the Clerk of the Circuit Court of the City of Norfolk for faulty recordation of the deed of trust have been determined, at which time, the entire balance will be due. I am to proceed with diligence in the litigation against the attorney and the Clerk.
On June 19, 1984, Williams filed a two-count motion for judgment against the Consolvo Firm and against the Clerk. The motion for judgment was amended twice. Ultimately, the allegation of negligence against the Consolvo Firm was that the firm negligently examined the title to the property and failed to advise Williams of the existence of a deed of trust; that the firm negligently failed to take effective steps to remedy its prior negligence; and that the firm negligently failed to advise Williams that if he made any payments to the noteholder he would be considered a volunteer. Williams alleged in count two of the motion for judgment that the Clerk was negligent in misindexing the deed of trust.
Pursuant to the agreement with the noteholder, Williams made payments from May 1984 through October 1985. By letter dated October 7, 1985, Gray advised counsel for the noteholder that after Gray had filed suit on Williams' behalf against the Clerk and the Consolvo Firm, he had been confronted with the defense that Williams "was a bona fide purchaser for value, that the property was not subject to the deed of trust which was recorded, but not properly indexed, and that Mr. Williams was a volunteer in making any payments." Gray advised the noteholder's counsel that he feared he may have given his client, Williams, "erroneous advice." Therefore, Gray advised Williams not to make any further payments until the matter was resolved. The noteholder then instituted foreclosure proceedings; Williams responded to that suit by seeking a permanent injunction against foreclosure. The matters were considered together by the trial court.
The trial court entered summary judgment in favor of the Consolvo Firm and the Clerk. In addition, the trial court permanently enjoined any effort by the noteholder to foreclose upon the lien of the misindexed deed of trust. In its judgment order, the trial court also made the following rulings:
1. that the Consolvo Firm was not negligent in examining the title to the land purchased by Williams;
2. that the Clerk was negligent as a matter of law in misindexing the deed of trust;
3. that Williams was a bona fide purchaser of the property for value;
4. that the payments made by Williams after foreclosure proceedings had begun were made as a volunteer; and
5. that Williams failed to prove that he sustained any damage.
On appeal, Williams makes four assignments of error. He contends the trial court erred in:
1. failing to decide whether the Consolvo Firm was negligent in not advising Williams that if he made payments on the note, he would be a volunteer;
2. ruling that Williams made payments as a volunteer;
3. ruling that Williams did not prove any damages; and
4. granting summary judgment in favor of defendants.
The principles concerning when payments are made as a volunteer have been well developed in Virginia case law at least since the early 19th century. See Mayor & c. of Richmond v. Judah, 32 Va. (5 Leigh) 331 (1834). Nevertheless, Williams, in discussing this issue, relies upon dictionary definitions and foreign authorities. We will dispose of the issue on the basis of Virginia law.
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