This is an appeal by John Seigle and Darlene Seigle (Seigles) from two separate summary judgments dismissing two separate lawsuits that had been consolidated by the trial court. We affirm the trial court's summary judgment in favor of appellees, Thomas R. Jasper, Verneasa Jasper and Mildred Tennill (Jaspers-Tennills) on Seigles' claim of breach of warranty in the deed. We reverse the trial court's summary judgment in favor of appellee, Robert M. Coots (Coots), on Seigles' claim of negligence in the preparation of a title opinion by attorney Coots and remand for further proceedings.
On May 1, 1974, John Seigle and Carol Seigle, husband and wife, entered into a contract for deed with Thomas R. Jasper and Verneasa Jasper, husband and wife, and Floyd Tennill and Mildred Tennill, husband and wife, for the purchase of real estate known as Lot No. 8 of the Ridgeview Subdivision located in Spencer County, Kentucky. Carol Seigle has died, and John Seigle is now married to Darlene Seigle. Floyd Tennill has also died.
As to the summary judgment in favor of Jaspers-Tennills, the Seigles do not appeal the dismissal of their fraud claim due to the running of the statute of limitations. Their appeal as to Jaspers-Tennills is solely on the dismissal of their claim for breach of warranty. The Seigles make a thorough argument involving the law concerning covenants of general warranty, much of which we accept. However, the fact still remains that the deed at issue included an exceptions clause that excepted from the general warranty the very easement that is at issue, and for that reason we affirm.
Both of the deeds from Jaspers-Tennills contained a standard general warranty clause that read: "The first parties hereby sell and convey with covenant of general warranty. . ." After the property was described, each deed also contained the following exceptions clause:
The Seigles argue that the above exceptions clause does not except the Ashland Oil easement from the covenant of general warranty; but instead, the deed creates in addition to the covenant of general warranty other special or independent covenants. The Seigles contend that the general rule is that a subsequent limited covenant will not restrict a preceding general covenant, citing the Oklahoma Supreme Court case, Joiner v. Ardmore Loan & Trust Co., 33 Okl. 266, 124 P. 1073 (1912). This is only part of the general rule. Joiner also recognizes that if the entire language of the deed taken as a whole clearly shows that it was the intent of the parties to limit the warranty, then the subsequent limited covenant will restrict the preceding general covenant. Joiner, supra, 124 P. at 1075-1076. While the language "further covenant they are lawfully seized of the estate herein conveyed with the full right and power to convey same in fee simple" may be redundant since these covenants are a part of a covenant of general warranty, we do not believe that it creates an ambiguity. The deed still clearly excepts from the covenant of general warranty encumbrances consisting of "easements and restrictions of record and Zoning Regulations of Spencer County."
The Seigles next argue that even if the exceptions are applicable to the covenant of general warranty that "their applicability would be limited to the covenant against encumbrances." This argument is based on the generally accepted principle that the covenant of "general warranty includes all common law covenants under section 493 of the Kentucky Statutes." (Section 493 is now KRS 382.030.) Eli v. Trent, 195 Ky. 26, 27, 241 S.W. 324 (1922), citing Butt v. Riffe, 78 Ky. 352 (1880); Smith v. Jones, 97 Ky. 670, 31 S.W. 475 (1895); Waggener v. Howsley's Adm'r., 164 Ky. 113, 175 S.W. 4 (1915). In discussing the term "general warranty," the Court in Smith, supra, stated:
97 Ky. at 672, 31 S.W. 475.
The Seigles argue that the exceptions clause only applies to the encumbrance portion
By stating "there are no encumbrances against same except easements . . .", the deed limits all five covenants of the general warranty for the described real estate. The use of the word "encumbrances" in the exceptions clause does not restrict the applicability of the exceptions clause to the encumbrance covenant alone. Rather, it is providing the grantees with actual and specific notice that the general warranty the grantors are giving is less than complete — that there is an encumbrance, the easement, against the property.
It has been held that a clause in a deed excepting easements from the covenants is sufficient to except from a conveyance burial privileges in a cemetery that were only an easement and not a fee simple interest. Haas v. Gahlinger, Ky., 248 S.W.2d 349, 351 (1952). The purpose of the grantors in including the exceptions clause is to give the grantees actual notice of the easement. In Poole v. Young, Ky., 459 S.W.2d 162 (1970), the Court of Appeals reversed the trial court and allowed a lawsuit for damages for alleged breach of the covenant of general warranty to proceed because the deed contained a standard covenant of general warranty but no language excepting therefrom an easement for a neighbor's septic tank drain field that was of record. However, in the instant case, since the Ashland Oil easement was of record and since the deed provided for this exception, it was the responsibility of the Seigles to have a proper search of the records performed in order to learn the details of the "easements and restrictions of record." We affirm the trial court's summary judgment in favor of Jaspers-Tennills.
This takes us to the Seigles' claim in negligence against Coots for failing to properly advise them of the existence of the Ashland Oil easement. The order of the Spencer Circuit Court sustaining Coots' motion for summary judgment does not provide any insight into the legal reasoning underlying it. Further, the record before us appears to be incomplete in that Coots' motion to dismiss with memorandum in support, answer and motion for summary judgment with memorandum referred to in the Seigles' memorandum in support of their motion for partial summary judgment are not in the record. Therefore, we will address the issues of the case as we discern them from the record.
Kentucky Rules of Civil Procedure (CR) 56.03 provides that summary judgment should be granted "if the pleadings, depositions, answers to interrogatories, stipulations, and admissions on file, together with the affidavits, if any, show that there in no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." The Supreme Court in Steelvest, Inc. v. Scansteel Service Center, Inc., Ky., 807 S.W.2d 476 (1991), stated:
Id. at 480.
Id. at 482.
Id. at 483.
The standard of review on appeal of a summary judgment is whether the trial court correctly found that there were no genuine issues as to any material fact and that the moving party was entitled to judgment as a matter of law. Goldsmith v. Allied Building Components, Inc., Ky., 833 S.W.2d 378 (1992).
There is evidence in the record supporting the Seigles' claim of negligence. In viewing the evidence in the light most favorable to the Seigles, the evidence supports the following: (1) Peoples Bank required a title examination in order to close the Seigles' loan; (2) Peoples Bank regularly used Coots for title examinations of Spencer County real estate; (3) the Seigles agreed to the use of Coots for the title examination with the understanding that they would pay his attorney's fees through the loan closing costs paid to Peoples Bank, which they did; (4) Coots wrote a title letter to Peoples Bank dated July 9, 1984 which referenced the Seigles by name and included several exceptions, some of which were easements, but did not make any reference to the Ashland Oil easement; (5) John Seigle was advised by an officer of Peoples Bank that Coots had performed the title search in 1979 also, and that "everything was clear;" (6) the Seigles acted reasonably in relying upon the representations made by Coots in his title reports; (7) the Seigles would not have purchased the property had they been made aware of the restrictions placed on the property by the Ashland Oil easement; (8) the Seigles have suffered damages in that their property with the Ashland Oil easement is worth less than it would be without the easement; and (9) Coots failed to exercise ordinary care in preparing the title opinion whereby he breached his duty to the Seigles to properly advise them of the existence of the Ashland Oil easement.
The Seigles have sued Coots for negligence. One issue before the trial court was whether or not Coots' duty to exercise ordinary care in the performance of the title examination extended to the Seigles. We hold that it did.
In First American Title Insurance Co. v. First Title Service Co., 457 So.2d 467 (1984), 50 A.L.R.4th 301, the Florida Supreme Court held that where a title insurance company had issued title insurance in reliance on a title abstract prepared for the seller of the property, and the title abstractor failed to note the existence of a recorded judgment against a former owner of the property, since the abstractor prepared the abstract knowing, or under conditions in which he should reasonably have expected that the seller would provide the abstract to the title insurance company for the purpose of inducing the title insurance company to rely on the abstract as evidence of title, the abstractor's contractual duty to perform the service skillfully and diligently ran to the benefit of the title insurance company. We accept the holding in First American Title that the Court summarized as follows:
457 So.2d at 473.
This holding is consistent with the Restatement (Second) of Torts, § 552, Information Negligently Supplied for the Guidance of Others, which states in pertinent part:
Again, in viewing the facts most favorably to the Seigles, Coots was acting in the course of his profession for his pecuniary interest when he failed to exercise reasonable care or competence in obtaining or communicating information and supplied false information for the guidance of Peoples Bank, Jaspers-Tennills and the Seigles in their business
It is well established that "[t]he concept of liability for negligence expresses a universal duty owed by all to all." Gas Service Co., Inc. v. City of London, Ky., 687 S.W.2d 144, 148 (1985). "The rule is that every person owes a duty to every other person to exercise ordinary care in his activities to prevent foreseeable injury." Grayson Fraternal Order of Eagles v. Claywell, Ky., 736 S.W.2d 328, 332 (1987). "In any negligence case, it is necessary to show that the defendant failed to discharge a legal duty or conform his conduct to the standard required. W. Prosser, Law of Torts § 30 (1971)." Mitchell v. Hadl, Ky., 816 S.W.2d 183, 185 (1991). In Hill v. Willmott, Ky. App., 561 S.W.2d 331 (1978), this Court in discussing an attorney's duty to a third party accepted language from Donald v. Garry, 19 Cal.App.3d 769, 97 Cal.Rptr. 191 (1971), and stated:
561 S.W.2d at 334.
"In determining whether that degree of care and skill exercised by the attorney in a given case meets the requirements of the standard care . . ., the attorney's act, or failure to act, is judged by the degree of its departure from the quality of professional conduct customarily provided by members of the legal profession. Prosser, Law of Torts, § 32 at 161-166 (4th ed. 1971). As it would be in negligence cases generally, the question of whether the conduct of the attorney meets the standard of care test is one for the trier of the facts to determine." Daugherty v. Runner, Ky.App., 581 S.W.2d 12, 16 (1978).
Coots' other defenses of estoppel and statute of limitations can be dispensed with in short order. The fact that the deed from Jaspers-Tennills to the Seigles contained an exception for "easements or restrictions of record" in no way eliminates Coots' duty to include the Ashland Oil easement in his title letter since the whole purpose of having Coots perform a title examination was to specifically advise the parties of any restrictions on the title. It is the duty of the attorney conducting the title search to communicate to the parties any information that might reasonably constitute a defect and restriction on the title. See Owen v. Neely, Ky., 471 S.W.2d 705 (1971). Coots' estoppel argument based on two exceptions contained in the title letter also fails. The letter excepted "[u]nrecorded easements, discrepancies or conflicts in boundary lines, shortage in area and encroachments which an accurate and complete survey would disclose." (emphasis added). Since the Ashland Oil easement was recorded, this exception clearly does not cover it. The letter also excepted "[r]ights or claims of parties other than (appellants) in actual possession of any or all of the real property." The Texas Supreme Court in Shaver v. National Title & Abstract Co., 361 S.W.2d 867 (Tex.1962), a case that also involved a pipeline, stated:
361 S.W.2d at 869.
Ashland Oil's acts of occupancy were not sufficiently open, visible and unequivocal to put the Seigles on inquiry as to Ashland Oil's rights.
Coots argues that since the purchase agreement between the Seigles and the Jaspers-Tennills for Lot No. 8 dated January 29, 1974 contained the words "with pipeline" that the Seigles had notice of the pipeline and are estopped from claiming otherwise. The genuineness of these words is strongly disputed by the Seigles and is an issue of fact for the jury.
Coots argues that the one-year statute of limitations ran prior to the filing of this action in 1989 since the most recent title
We reverse the summary judgment in favor of Coots and remand for further proceedings consistent with this Opinion. We affirm the summary judgment in favor of Jaspers-Tennills.
STUMBO, J., concurs.
DYCHE, J., concurs in part; dissents in part.
DYCHE, J., concurring in part and dissenting in part.
I concur in the result reached by the majority as it applies to the claim against the Jaspers and Ms. Tennill. I must dissent in part, however, as to the majority's holding as it applies to the attorney involved herein. Hill v. Willmott, Ky.App., 561 S.W.2d 331 (1978), imposes a duty toward the purchasers upon an attorney in a situation such as this; the attorney's responsibility, however, is limited to damages sustained on Lot 13 only, as appellants had already contracted to purchase Lot 8 prior to any involvement of the attorney.