Cummings v. Stephens

Roger and Barbara Stephens owned a parcel of real property consisting of about 270 acres on the west side of the highway and another parcel consisting of about 83 acres on the east side of the highway. They hired a realtor to sell the parcel on the west side of the highway. The realtor asked Northern Title Company of Idaho, Inc., to begin the initial title work for a sale of the property, including preparing a legal description for the sale of the parcel on the west side of the highway. Stephen Cummings noticed a "For Sale" sign on the Stephenses' property. Cummings negotiated to purchase the Stephens' property. He was faxed a copy of the commitment for title insurance issued in connection with the transaction. The legal description in the document included the Stephenses' property on both sides of the highway and two additional parcels they did not own. Based upon the legal description in those documents, Cummings believed that the property being sold included both parcels of the Stephenses' property. Northern Title discovered that the legal description it had prepared for use in the real estate contract and its title commitment for that transaction erroneously included the Stephenses' real property located east of the highway and two parcels of land they did not own. The legal description consisted of five paragraphs, each describing a separate parcel of real property. In an effort to correct that error, Northern Title created a revised legal description by inserting between the first and second paragraphs the words, "Except all of that portion of the following described land lying easterly of U.S. Highway 30." That change excluded the two parcels of property not owned by the Stephenses, but it did not exclude their land lying east of the highway because it was described in the first paragraph. On the date of closing, Northern Title recorded a warranty deed (Original Deed) granting to Cummings the real property described in the revised legal description, which was attached to the deed as Exhibit A. The legal description included the Stephenses' property on the east side of the highway. Mr. Stephens went to the county courthouse to pay the real estate taxes on the 83 acres of land east of the highway and was informed that he no longer owned that property. Cummings filed this action against Mr. Stephens over the erroneous deed. Stephens answered, denying Cummings's claims, and filed a third-party claim against Northern Title. He later dropped his third-party claim in exchange for Northern Title agreeing to indemnify him from any losses. Stephens then filed a motion for summary judgment, contending that there was a mutual mistake or a unilateral mistake in the legal description of the real property being sold. The district court held that there was a genuine issue of fact regarding mutual mistake, but it granted the motion on the ground that the undisputed evidence showed a unilateral mistake. One of the realtors had filed an affidavit stating that prior to the sale he had told Mr. Cummings that only the land west of the highway was being sold, and Mr. Cummings did not deny that fact. Cummings successfully moved for reconsideration, with the district court finding that there was a genuine issue of material fact as to what Cummings had been told about what property he was purchasing. Cummings then amended his complaint, adding Northern Title as a defendant and alleging that by recording the Correction Deed, Stephens and Northern Title breached the warranties of title in the Original Deed, converted the 83 acres lying east of the highway, and slandered Cummings's title to the real property. The district court granted Stephens's motion for involuntary dismissal as to all of the claims against him. And in its written findings of fact and conclusions of law, the district court denied all of Cummings's claims against Northern Title except one. It found that Northern Title acted negligently as a title and abstract company, and it awarded Cummings damages in the sum of $50,000, which was the sum he had paid to obtain an assignment of its contract to purchase the Stephenses' property. The court awarded Mr. Stephens costs and attorney fees against Cummings, and it awarded Mr. Cummings costs and attorney fees against Northern Title. Mr. Cummings appealed and Northern Title cross-appealed. The Supreme Court affirmed the dismissal of Cummings' claims against Stephens, and reversed claims against Northern Title on the ground that it assumed the duty of being an abstractor of title.View "Cummings v. Stephens" on Justia Law