Opinion
No. 05-15-00154-CV
07-26-2016
FELTON LOVE AND BRIGHT IDEAL CONSTRUCTION CO., Appellants v. CHICAGO TITLE INSURANCE COMPANY AND FIDELITY NATIONAL INSURANCE COMPANY, Appellees
On Appeal from the 192nd Judicial District Court Dallas County, Texas
Trial Court Cause No. DC-10-13809
MEMORANDUM OPINION
Before Justices Bridges, Evans, and Richter
Opinion by Justice Bridges
The Hon. Martin Richter, Justice, Assigned --------
Felton Love and Bright Ideal Construction Co. appeal the trial court's summary judgment in favor of Chicago Title Insurance Company and Fidelity National Title Insurance Company. In two issues, Love argues the trial court erred in granting summary judgment on his negligent misrepresentation and breach of contract claims. We affirm the trial court's judgment.
In November 2003, Love purchased a title policy from Chicago in connection with his purchase of property in Dallas described as follows:
Being 31 feet of Lot 20, in Block B/1855 of Brook Mays Spring Avenue Addition, RePlat, an Addition to the City of Dallas, Dallas County, Texas according to the map thereof recorded in Volume 4, Page 420 of the Map Records of Dallas County, Texas.In October 2010, Love sued Chicago and Fidelity alleging the property he purchased in 2003 was a home at 2912 Gay Street in Dallas. Love alleged he rented the home to tenants, paid the mortgage on the home, and had the home completely remodeled by Bright Ideal in 2008. Also in 2008, Love alleged his tenants called and said that police told the tenants that they were trespassing and the home belonged to Chicago. Love alleged Chicago closed his purchase of the home and then, later in 2004, "deeded said property back to themselves." Love sought compensatory damages, punitive damages, and attorney's fees.
Chicago and Fidelity filed a joint traditional and no-evidence motion for summary judgment arguing Love owned the adjacent property, a vacant lot at 2914 Gay Street. The motion was supported by deeds showing the chain of title of both 2912 and 2914 Gay Street. The chain of title to the vacant lot shows that Love conveyed the lot to Shaconda McKendrick on July 25, 2008. The property description was the same as the description on Love's title policy but contained the additional statement, "Also known as 2912 Gay Street Dallas, Texas 75210." Four days later, McKendrick conveyed the property back to Love. Once again, the property description was identical to the description in Love's title policy with the addition of "Also known as 2912 Gay Street." The chain of title to 2912 Gay Street showed a February 5, 2003 deed to Chicago from individuals not a party to this case. The trial court granted Chicago and Fidelity's motion for summary judgment, and this appeal followed.
In his first issue, Love argues the trial court erred in granting summary judgment on his negligent misrepresentation claim. A party seeking a no-evidence summary judgment must assert that no evidence exists as to one or more of the essential elements of the nonmovant's claim on which the nonmovant would have the burden of proof at trial. See TEX. R. CIV. P. 166a(i); Henning v. OneWest Bank FSB, 405 S.W.3d 950, 957 (Tex. App.—Dallas 2013, no pet.). "The motion must state the elements as to which there is no evidence." TEX. R. CIV. P. 166a(i); Henning, 405 S.W.3d at 957. Once the movant specifies the elements on which there is no evidence, the burden shifts to the nonmovant to raise a fact issue on the challenged elements. See TEX. R. CIV. P. 166a(i); Henning, 405 S.W.3d at 957; S.W. Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002). We review a no-evidence motion for summary judgment under the same legal sufficiency standard used to review a directed verdict. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750-51 (Tex. 2003); Flood v. Katz, 294 S.W.3d 756, 762 (Tex. App.—Dallas 2009, pet. denied). Our inquiry focuses on whether the nonmovant produced more than a scintilla of probative evidence to raise a fact issue on the challenged elements. See King Ranch, 118 S.W.3d at 751; Flood, 294 S.W.3d at 762. Evidence is no more than a scintilla if it is "so weak as to do no more than create a mere surmise or suspicion" of a fact. King Ranch, 118 S.W.3d at 751. If a no-evidence motion for summary judgment and a traditional motion for summary judgment are filed which respectively asserts the plaintiff has no evidence of an element of its claim and alternatively asserts that the movant has conclusively negated that same element of the claim, we address the no-evidence motion for summary judgment first. Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004).
Here, Love's pleadings did not assert a negligent misrepresentation cause of action, and the issue was not tried by consent. See UMLIC VP LLC v. T&M Sales, 176 S.W.3d 595, 603-05 (Tex. App.—Corpus Christi 2005, pet. denied) (trial court erred in submitting fraud issue to jury where fraud not pleaded or tried by consent). However, even if we were to address the negligent misrepresentation issue, we would conclude the issue lacks merit. In a motion for summary judgment against Fidelity, Love mentioned "negligent misrepresentation" along with breach of contract. Love argued "the representation made here was that the legal description applied to 2912 Gay Street," and the fact that the "legal description could or did apply to a different tract was a producing cause of damage" to Love. Citing First Title Co. of Waco v. Garrett, 860 S.W.2d 74, 76 (Tex. 1993), Love argued that, under Texas law, when a seller makes an affirmative representation, the law imposes a duty to know whether that statement is true. Id. In the context of title insurance, this principle requires that a title insurer be held responsible for an affirmative representation that is the "producing cause" of damages to the party purchasing the insurance. Id.
Our review of the record reveals no evidence that Fidelity or Chicago made any representation that the legal description in the title policy applied to 2912 Gay Street. Both the deed and the title policy contain the same description, which identifies 2914 Gay Street, a vacant lot. The record shows it was Love himself who added the language "Also known as 2912 Gay Street." to the legal description when he conveyed it to McKendrick and she conveyed it back again four days later in July 2008. Under the circumstances of this case, we conclude the trial court did not err in granting no-evidence summary judgment on Love's negligent misrepresentation claim. See King Ranch, 118 S.W.3d at 751. We overrule Love's first issue.
In his second issue, Love argues Chicago breached its contractual obligations under the title policy, and the trial court erred in granting summary judgment on his breach of contract claim. There is a vast difference in a situation where a party employs an abstract company to make a title investigation and a situation where a party contracts a title insurance company for a title policy insuring title. Tamburine v. Ctr. Sav. Ass'n, 583 S.W.2d 942, 947 (Tex. Civ. App. 1979, writ ref'd n.r.e.) The difference between abstract companies and title insurance companies is well defined. Id. The former are concerned primarily with the compilation of data, affecting the title to particular tracts of land, to enable an examiner skilled in land law to evaluate the title; while the latter have evolved as corporate insurance companies to guarantee (with specified exceptions) the status of such title and to insure against existing defects which may beset it. Id. Title insurance is a contract of indemnity. Id. (citing Southern Title Guaranty Co., Inc. v. Prendergast, 494 S.W.2d 154 (Tex. 1973)). In the absence of some special circumstances, the relationship between the parties is limited to that of indemnitor and indemnitee. Id.
A title company, before issuing a policy of title insurance, must necessarily take steps to inform itself of the status of the title to be insured. Id. at 948. In the search for information upon which must depend the decision to either issue or decline to commit itself to issue a policy, the insurance company obviously investigates the title for its own use and benefit to determine whether it will undertake the risk. Id. at 948-49. The title information on which the company bases its decision relates to the condition of the title held by the grantor and is not made for the prospective grantee or lienholder to whom the policy will finally issue. Id. at 949. In performing these activities, the company does not act in behalf of the party to be insured, but acts exclusively for itself. Id. Therefore, up to the point where the insurance company commits itself to issue a policy upon certain conditions, the unilateral conduct of the insurance company or its agents in investigating the title does not create an agency relationship. Id.
Further, before closing the title policy contract, the company must satisfy itself that the title to the property is transferred in such a manner that the title or interest in the property is transferred in accordance with its commitment in the mortgagee's information letter. Id. In performing this activity, it is necessary for the title company or its agents to supervise the transfer. Id. In so doing, the company merely satisfies itself that the instruments tendered by the attorney are sufficient to accomplish the transfer of title. Id. It does not undertake to act on behalf of the insured to see that a flawless title is transferred, but only that such title is transferred that the company will insure despite any flaws. Id. Thus, the title company does not act as the agent of the insured in supervising the transfer, but acts exclusively for its own benefit and protection. Id. In summary, it may be said that any and all activities performed by the insurance company or its agents, which are indispensable to the determination of insurability constitutes acts in its own behalf and not on behalf of the prospective grantee or lienholder to whom the policy will finally issue. Id. Thus, neither Chicago nor Fidelity acted on Love's behalf in issuing the title policy, and neither undertook any contractual obligations to ensure that a flawless title was transferred, but only that such title was transferred that the company would insure despite any flaws. See id. Under these circumstances, we conclude the trial court did not err in granting no-evidence summary judgment on Love's breach of contract claim. See King Ranch, 118 S.W.3d at 751. We overrule Love's second issue.
We affirm the trial court's judgment.
/David L. Bridges/
DAVID L. BRIDGES
JUSTICE 150154F.P05
JUDGMENT
On Appeal from the 192nd Judicial District Court, Dallas County, Texas
Trial Court Cause No. DC-10-13809.
Opinion delivered by Justice Bridges. Justices Evans and Richter participating.
In accordance with this Court's opinion of this date, the judgment of the trial court is AFFIRMED.
It is ORDERED that appellees CHICAGO TITLE INSURANCE COMPANY AND FIDELITY NATIONAL TITLE INSURANCE COMPANY recover their costs of this appeal from appellants FELTON LOVE AND BRIGHT IDEAL CONSTRUCTION CO.. Judgment entered July 26, 2016.