Wycalis v. Guardian Title of Utah

• Decision Date: 29 August 1989
• Docket Number: No. 880030,880030
• Parties: Bette WYCALIS, Plaintiff and Appellant, v. GUARDIAN TITLE OF UTAH and Warren H. Curlis, its president; City Federal Savings & Loan Association; U.S. Life of Utah, trustee; City Consumer Services, Inc., beneficiary; R.M. Wall; Gary L. Meredith; Lyle G. Meredith; Ed Maas; Randy Krantz; B. Brad Christenson; Debra Christenson; and John Does I through V, Defendants and Respondents. (A)-CA.
• Court: Utah Court of Appeals

Page 821

780 P.2d 821

Bette WYCALIS, Plaintiff and Appellant, v. GUARDIAN TITLE OF UTAH and Warren H. Curlis, its president City Federal Savings & Loan Association; U.S. Life of Utah trustee; City Consumer Services, Inc., beneficiary; R.M Wall; Gary L. Meredith; Lyle G. Meredith; Ed Maas; Randy Krantz; B. Brad Christenson; Debra Christenson; and John Does I through V, Defendants and Respondents.

No. 880030(A)-CA.

Court of Appeals of Utah.

Aug. 29, 1989.

Rehearing Denied Sept. 26, 1989.

Joseph E. Hatch (argued), Garrett and Sturdy, Eric P. Hartman, Salt Lake City, for Krantz and Christenson.

Dallas H. Young, Jr., Sherman C. Young (argued), Ivie & Young, Provo, for Wycalis.

George W. Pratt (argued), David R. Money, Jones, Waldo, Holbrook & McDonough, Salt Lake City, for Guardian Title and Warren Curlis.

Before DAVIDSON, BENCH and ORME, JJ.

OPINION

ORME, Judge:

Bette Wycalis, formerly the beneficiary under a trust deed, appeals the trial court's entry of summary judgment terminating her action against Guardian Title of Utah, the trust deed trustee, and its president, Warren Curlis. This appeal was consolidated with another which arose from a separate judgment entered in the same case. However, this opinion treats only the Wycalis appeal. We reverse and remand for further proceedings.

FACTS

In July 1980, Wycalis sold Randy Krantz and Brad and Debra Christenson a parcel of real estate located in Helper, Utah. A promissory note dated July 1, 1980, payable to Wycalis and her mother, Eva Robertson, was delivered to Wycalis as partial payment for the Helper property. ¹ The makers of the promissory note were R & C Associates, Krantz, and the Christensons. The note was secured by a standard, short form trust deed dated June 26, 1980. The trust deed, signed only by R & C Associates, was properly executed and created a lien in Wycalis's favor on a parcel of Weber County property owned by R & C Associates. Guardian Title was named as trustee under the trust deed.

Wycalis received payments on the note from August 1980 through December 1982, at which time all payments ceased, leaving the note substantially unpaid. Wycalis then contacted Guardian to enforce her rights under the trust deed. Guardian informed Wycalis that on December 26, 1980, the Weber County property had been reconveyed to the trustor, R & C Associates, pursuant to a request for reconveyance allegedly bearing Wycalis's signature. Wycalis protested this divestment of her security interest in the property. Subsequent investigation revealed that Wycalis's signature had been forged on the request for reconveyance which Guardian had received and relied on in reconveying the trust deed property.

The forged request for reconveyance was acknowledged by a notary who was either duped or corrupted. This document was accompanied by a letter requesting the substitution of a trust deed on different property as security for the promissory note. ² Wycalis's signature was also forged on this letter. Upon receiving the two forged documents, Guardian did not contact Wycalis to verify her request, nor did it require delivery of the original promissory note or trust deed, although the request for reconveyance recited the note had been paid and erroneously indicated these documents were attached. ³

Wycalis filed a complaint against Guardian, Curlis, Krantz, the Christensons, and a number of other parties not involved in this or the related appeal. Wycalis claimed that Guardian Title breached its duty as trustee by reconveying the trust deed property and releasing her corresponding security interest based on a forged request for reconveyance. Wycalis also sought a judgment against Krantz and the Christensons for the unpaid balance of the promissory note. The trial court entered summary judgment against Wycalis and in favor of Guardian. The trial court also entered summary judgment in favor of Wycalis and against Krantz and the Christensons for the unpaid balance of the promissory note. As indicated, both judgments have been appealed, but we treat only the former in this opinion.

PROCEDURAL HISTORY

The procedural history of Wycalis's claim against Guardian is important to an understanding of our decision and merits detailed review.

Prior to Guardian's successful motion for summary judgment, Wycalis filed a motion for partial summary judgment on the question of Guardian's liability. Wycalis claimed Guardian was liable for the loss of her security interest because the reconveyance was unauthorized. She cited several cases in support of her argument. E.g., Huckell v. Matranga, 99 Cal.App.3d 471, 160 Cal.Rptr. 177 (1979); Doyle v. Surety Title & Guar. Co., 261 Cal.App.2d 525, 68 Cal.Rptr. 177 (1968); Jeanese, Inc. v. Surety Title & Guar. Co., 176 Cal.App.2d 449, 1 Cal.Rptr. 752 (1959). Guardian's response was, primarily, to distinguish those cases from the instant case, claiming that they involved situations where no authorization had been received by the trustee while Guardian had received apparent, acknowledged authorization to reconvey the property. Since "the acknowledgment of a document gives rise to a presumption of its genuineness," Guardian argued, a factual question existed concerning whether the trustee's unquestioning reliance on that document was consistent with the applicable duty of care. Guardian observed that the only case relied on by Wycalis involving a forged request for reconveyance was not resolved as a matter of law but instead had been submitted to the trier of fact. See Stephans v. Herman, 225 Cal.App.2d 671, 37 Cal.Rptr. 746 (1964). Guardian emphasized the need for "evidence as to the standard of care in the local title company industry" before it could properly be determined that Guardian breached its duty.

Wycalis's response was uncharacteristic of modern litigants. She conceded the validity of Guardian's argument, the inescapable presence of material factual questions, and the corresponding need for a trial. Accordingly, she withdrew her motion.

It was several months later that Guardian filed its own motion for summary judgment, now changing its tack considerably. Guardian argued that it owed no duty to foresee and protect against criminal acts, such as forgery, and that, in any event, it was entitled to rely on the acknowledged request as a matter of law. In her response, Wycalis unfortunately failed to remind the court of Guardian's prior concession of unavoidable factual issues and of the need for standard-of-care-in-the-industry evidence, which had not been offered by Guardian in support of its motion. ⁴ Nor did Wycalis directly refute Guardian's new legal arguments. Instead, she too changed tack. In essence, her response was that Guardian's new arguments were irrelevant because a forged reconveyance, even if acknowledged, is an absolute nullity. Thus, according to Wycalis, Guardian had, in effect, released the security without any authority whatsoever and was therefore liable for the loss as a matter of law.

It was in this posture of each party asserting its entitlement to judgment as a matter of law that the district court took Guardian's motion for summary judgment under advisement. Thereafter, the district court granted Guardian's motion, concluding that the "great weight" afforded acknowledged documents entitled Guardian to rely on the request in this case since there was no showing that Guardian had any reason to suspect a forgery. The propriety of that disposition is the gravamen of this appeal.

STANDARD FOR APPELLATE REVIEW OF SUMMARY JUDGMENT

Summary disposition of lawsuits is a valuable and necessary tool in a judicial system such as ours, which strives for the efficient and timely resolution of legal disputes. Granting summary judgment saves the parties and the courts the time and expense of a full-blown trial. See, e.g., Amjacs Interwest, Inc. v. Design Assocs., 635 P.2d 53, 54 (Utah 1981). However, summary judgment is appropriate only where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Utah R.Civ.P. 56(c). See, e.g., Ingram v. Salt Lake City, 733 P.2d 126, 126 (Utah 1987) (per curiam); Barber v. Farmers Ins. Exch., 751 P.2d 248, 251 (Utah Ct.App.1988); Briggs v. Holcomb, 740 P.2d 281, 283 (Utah Ct.App.1987). Appellate courts scrutinize summary judgments under the same standard applied by the trial courts, according no particular deference to the trial court's legal conclusions concerning whether the material facts are in dispute and, if they are not, what legal result obtains. See, e.g., Madsen v. Borthick, 769 P.2d 245, 247 (Utah 1988); Atlas Corp. v. Clovis Nat'l Bank, 737 P.2d 225, 229 (Utah 1987).

[W]e consider the evidence in the light most favorable to the losing party, and affirm only where it appears there is no genuine dispute as to any material issues of fact, or where, even according to the facts as contended by the losing party, the moving party is entitled to judgment as a matter of law.

Themy v. Seagull Enters., Inc., 595 P.2d 526, 528-29 (Utah 1979). See also, e.g., Barber, 751 P.2d at 251; Briggs, 740 P.2d at 283.

Every summary judgment must withstand scrutiny under the foregoing standards, even where a trial court was confronted with cross-motions for such relief. Despite the parties' apparent mutual perception in such situations that the material facts are not in dispute, it does not automatically follow that summary disposition is appropriate. ⁵ "Cross-motions for summary judgment do not ipso facto dissipate factual issues, even though both parties contend ... that they are entitled to prevail because there are no material issues of fact." Amjacs, 635 P.2d at 55. See also Diamond T Utah, Inc. v. Travelers Indem. Co., 21 Utah 2d 124, 441 P.2d 705, 706 (1968). Rather, cross-motions may be...