Leo E. Miller, et al., Respondents, vs. Pioneer Abstract & Title Co., Appellant.

Leo E. Miller, et al., Respondents, vs. Pioneer Abstract & Title Co., Appellant. A05-779, Court of Appeals Unpublished, December 20, 2005.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2004).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A05-779

 

Leo E. Miller, et al.,

Respondents,

 

vs.

 

Pioneer Abstract & Title Co.,

Appellant.

 

Filed December 20, 2005

Affirmed

Halbrooks, Judge

 

 

Fillmore County District Court

File No. C3-03-50

 

Roger E. Petersen, Roger Petersen Law Office, 119 6th Street Southwest, Suite B, Rochester, MN 55902 (for respondents)

 

Peter C. Sandberg, Dunlap & Seeger, P.A., 206 South Broadway, Suite 505, P.O. Box 549, Rochester, MN 55903 (for appellant)

 

 

            Considered and decided by Kalitowski, Presiding Judge; Toussaint, Chief Judge; and Halbrooks, Judge.

U N P U B L I S H E D   O P I N I O N

HALBROOKS, Judge

            Appellant disputes the measure of damages and attorney fees awarded for losses incurred as a result of a negligently prepared abstract, arguing that damages should be limited to an amount less than the entire value of the affected property and that attorney fees are not warranted.  Because the damage award is not shocking and does not result in plain injustice and because the district court did not abuse its discretion in awarding attorney fees, we affirm.

FACTS

            Appellant Pioneer Abstract & Title Co. challenges an award of damages and attorney fees to respondents Leo E. Miller and Jodi L. Miller, arguing that damages suffered where deeds had overlapping descriptions of property were not suffered as a result of appellant's error, but as a result of respondents' failure to timely file their deed.  Therefore, appellant contends that it should not be liable for those damages.

            In 1972, Carl and Dorothy Grell conveyed 23 acres of land to David and Eleanor Dunn through a contract for deed.  The Dunns did not record their contract.  In 1978, the Grells conveyed 80 acres to respondents through a contract for deed.  Approximately 6 of those 80 acres overlapped the acreage conveyed to the Dunns in 1972.  Respondents did not record their contract. 

            In 1982, the Grells gave the Dunns a warranty deed for the 23 acres, and the Dunns recorded the deed.  Later, Carl Grell died.  Dorothy Grell remarried, then died in 1998.  Thereafter, respondents decided to pay off their contract with the Grells and hired appellant to prepare an abstract for the 80-acre tract.  The abstract, furnished on June 4, 1998, did not list or index the Dunns' warranty deed.  Respondents paid off the remaining balance of $13,154.12 for the 80-acre tract and received a personal representative's deed, which they recorded the same year. 

            In February 2000, the Dunns sued respondents to determine the proper ownership of the overlapping parcel.  The district court concluded that the Millers were good-faith purchasers, entitled to protection under Minn. Stat. § 507.32 (2000), Minnesota's Recording Act.  On appeal, this court reversed and remanded, holding that the Dunns had superior interest in the overlapping parcel, thereby divesting respondents of any ownership interest in the parcel as of February 2002.  Dunn v. Miller, No. C5-01-1448 (Minn. App. Feb. 26, 2002).

            In January 2003, respondents sued appellant for damages incurred by their loss of the overlapping parcel, as well as attorney fees and costs associated with the Dunn litigation and the instant litigation.  During trial, respondents' expert testified that the reasonable market value of the overlapping parcel was approximately $65,000.  The district court granted respondents judgment of $79,324.13:  $65,000 for loss of the overlapping parcel and $14,324.13 for attorney fees in defense of the Dunn litigation.  Appellant moved for amended findings or a new trial.  In response, the district court amended one finding to read:  "Prior to the hearing, [appellant], through its attorney, admitted [appellant] was negligent and/or breached its contract with [respondents], and the only issue for this Court to decide was damages and whether or not the damages were a direct cause of [appellant's] breach or negligence."  The district court denied the motion for other amended findings and denied the request for a new trial.  This appeal follows.

D E C I S I O N

            Appellant concedes that it provided respondents with an incorrect abstract in June 1998.  The main issue therefore is the district court's application of the law to those facts in deciding damages and attorney fees.  A reviewing court need not defer to the district court's application of the law when the material facts are not in dispute.  Hubred v. Control Data Corp., 442 N.W.2d 308, 310 (Minn. 1989).  And a reviewing court should not disturb a damage award "unless its failure to do so would be shocking or would result in plain injustice."  Hughes v. Sinclair Mktg., Inc., 389 N.W.2d 194, 199 (Minn. 1986).  "The standard of review for an appellate court examining an award of attorney fees and costs is whether the district court abused its discretion."  Minn. Council of Dog Clubs v. City of Minneapolis, 540 N.W.2d 903, 904 (Minn. App. 1995), review denied (Minn. Jan. 25, 1996).

I.

            Minnesota law provides that an abstracter must file either a bond or insurance "for the payment by such abstracter of any damages that may be sustained by or accrue to any person by reason of or on account of any error, deficiency or mistake arising wrongfully or negligently in any abstract . . . made by and issued by such abstracter."  Minn. Stat. § 386.66 (2004) (emphasis added).  The statute comports with the longstanding principle that an abstracter who furnishes an erroneous or negligently prepared abstract is liable for the consequences of the error or negligence.  Wacek v. Frink, 51 Minn. 282, 284, 53 N.W. 633, 634 (1892).  

            The district court concluded that "[b]ecause of [appellant's] negligence and/or breach of contract [respondents] lost six acres of land.  This court concludes that [respondents'] loss was a result of [appellant's] actions and not as a result of them failing to record their contract."  The district court found that, had respondents known of the Dunns' interest in the overlapping parcel, respondents would not have paid in 1998 the outstanding balance on the 1978 contract for deed and that instead respondents would have insisted upon a correction or other resolution of the problem.  Because of the erroneous abstract, respondents lost the opportunity to resolve the overlapping-parcel problem. 

            Appellant contests the district court's measure of damages.  At trial, respondents presented an expert who testified that the value of the overlapping parcel was between $59,900 and $69,900.  Appellant did not present any evidence at trial to controvert that testimony.  In fact, appellant did not present any witnesses at trial, nor did appellant cross-examine respondents' witnesses.  Thus, the district court was well within its discretion when it found that respondents sustained $65,000 in damages "as a result of [appellant's] actions."  Such an award is not shocking, nor does it result in plain injustice.  Because an abstracter is liable for "any damages that may be sustained by or accrue to any person by reason of or on account of any error, deficiency or mistake arising wrongfully or negligently in any abstract," appellant is liable for the $65,000 in damages incurred as a result of appellant's negligence.  Minn. Stat. § 386.66.

II.

            The American Rule provides that parties should be responsible for their own attorney fees and thereby generally prevents a party from shifting its attorney fees to its adversary.  Kallok v. Medtronic, Inc., 573 N.W.2d 356, 363 (Minn. 1998).  But an exception to that rule allows a court to award attorney fees as damages where one party's tortious conduct or breach of contract thrusts or projects a second party into litigation with a third party.  Id.; Bergquist v. Kreidler, 158 Minn. 127, 130, 196 N.W. 964, 965 (1924). 

            Attorney fees are an appropriate element of damages when "[t]he embarrassing dilemma" in which a party is placed is "due solely to the wrongful act of [the other party]."  Bergquist, 158 Minn. at 130, 196 N.W. at 965.  Thus, where a wrongful act involves a party in litigation with others or places a party in a position in relation to others that makes it necessary to incur expense to protect his interest, "such costs and expenses, including attorneys' fees, should be treated as the legal consequences of the original wrongful act and may be recovered as damages."  Tarnowski v. Resop., 236 Minn. 33, 40, 51 N.W.2d 801, 804 (1952) (quotation omitted).  The district court did not abuse its discretion when it found that the $14,324.13 in attorney fees respondents incurred in defense of the Dunn litigation "were the natural and proximate consequence of [appellant's] tortious conduct or breach of contract that resulted in [respondents] being sued by the Dunns in the property dispute." 

            Affirmed.