may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1996).
STATE OF MINNESOTA
IN COURT OF APPEALS
Executive Re Indemnity, Inc.,
a Delaware Corporation, et al.,
National Title Resources Corp., et al.,
defendants and third-party plaintiffs,
Timothy Netzell, et al.,
Filed September 2, 1997
Hennepin County District Court
File No. MC953293
Wayne B. Holstad, Karen Hill Fjeld, John L. Lindell, Holstad & Larson, P.L.C., 3535 Vadnais Center Drive, #130, St. Paul, MN 55110 (for appellants)
Considered and decided by Toussaint, Chief Judge, Randall, Judge, and Kalitowski, Judge.
Defendants in a fraud action appeal from a judgment in favor of plaintiffs entered subsequent to a jury special verdict and from the trial court's denial of their posttrial motions, arguing: (1) respondents' reliance was unjustified as a matter of law; and (2) respondents' alleged negligence in failing to conduct an adequate title search provides an absolute defense to a determination of fraud. We affirm.
The application faxed by the bank to National Title was duly received by National Title and the staff at National Title began processing the application. Holstad directed his staff to alter the title insurance application by whiting out their notations. Holstad then had the altered document sent to Network, but without any indication that the paperwork had ever been handled by National Title. Holstad told his employees that if Network Title would issue the new title insurance, National Title would no longer be responsible for the Apple Valley property's title defect. Holstad later had a National Title employee check the county records to see if Network Title had issued new title insurance. Upon learning that Network Title had issued new title insurance, Holstad became very excited and told his employees that he had "screwed" Netzell and Network Title.
Network Title received the application in January of 1994 and processed the application without awareness that it had originated from National Title. A copy of the prior title commitment issued by National Title, under which National Title had been obligated for the previously-missed title defect, was attached to the one-page application for title insurance. The attached title commitment incorrectly showed a clean title, as of August 1992, for the Apple Valley property. Network Title relied on the prior title commitment and only searched the title forward from the August 1992 policy date. Evidence produced at trial indicated that Network Title had received a tract search from Quality Abstract indicating the existence of the prior mortgage. In addition, evidence indicated that the encumbrance was recorded on April 16, 1993, and June 10, 1993. The parties dispute whether that information was available prior to closing and whether a proper forward title search would have revealed the title defect. The application did not come to the attention of Netzell until after the title insurance had been issued and Network Title had assumed responsibility for the underlying title defect.
Subsequently, Network Title tendered a claim to its underwriter, Fidelity National Title Insurance Company, and to Network's errors and omissions insurer, Executive Re Indemnity, Inc., and the claim was settled.
only upon a showing of clear abuse of discretion or if conduct was so prejudicial that it would be unjust to allow the result to stand.
Jack Frost, Inc. v. Engineered Bldg. Components Co., 304 N.W.2d 346, 352 (Minn. 1981). In reviewing the denial of a motion for judgment notwithstanding the verdict, this court applies the same standard as the trial court did in passing on the jury verdict. Ledoux v. Northwest Pub., Inc., 521 N.W.2d 59, 65 (Minn. App. 1994) (citing Edgewater Motels, Inc. v. Gatzke, 277 N.W.2d 11, 14 (Minn. 1979)), review denied (Minn. Nov. 16, 1994). "The evidence and inferences must be viewed in the light most favorable to the jury." Id. (citing Bergemann v. Mutual Serv. Ins. Co., 270 N.W.2d 107, 109 (Minn. 1978)).
On review, answers to special verdict questions will not be set aside unless they are perverse and palpably contrary to the evidence or where the evidence is so clear to leave no room for differences among reasonable people.
Hanks v. Hubbard Broad., Inc., 493 N.W.2d 302, 309 (Minn. App. 1992) (citation omitted), review denied (Minn. Feb. 12, 1993). If the special verdict can be reconciled on any theory, the verdict will not be disturbed. Id.
The jury considered the issue of justifiable reliance and determined that Holstad committed fraud on Network Title. On these facts, we cannot say that a manifest justice has been done or that the evidence is palpably contrary to the verdict, and we conclude that the trial court's order is correct. See Gardner v. Germain, 264 Minn. 61, 63, 117 N.W.2d 759, 761 (Minn. 1962) (setting forth circumstances under which verdict will be sustained).
It is true that in some cases, where both parties have been negligent, a trial court may direct a verdict under the Minnesota comparative fault statute. See Minn. Stat. § 604.01, subd. 1 (1996) (setting forth comparative fault rules). But principles of comparative negligence do not apply in the context of intentional torts. Florenzano v. Olson, 387 N.W.2d 168, 175 (Minn. 1986); see also Kelzer v. Wacholtz, 381 N.W.2d 852, 854 (Minn. App. 1986) (declining to apply comparative fault statute and stating that fault of intentional tort victim is irrelevant to the victim's action). Here, Holstad committed a fraud, and is therefore an intentional tortfeasor. See Florenzano, 387 N.W.2d at 173 (classifying fraud as intentional tort). As the trial court aptly pointed out in its memorandum:
[D]efendant confuses the issue in this case. We are not dealing with the failure of both the plaintiff and the defendant to initially discover the defect clearly identifiable by a protracted title search. Rather, we are dealing with the overt act of defendant in attempting to literally "stick" the plaintiffs with this loss by presenting documents that Mr. Holstad knew were fallacious.
Accordingly, Network Title's alleged contributory negligence has no effect on appellants' liability for fraud.
Appellants contend that respondents' fraud claim is, in reality, an indemnity claim. Appellants then argue that indemnity principles preclude such a claim because appellants did not participate in the settlement. We disagree. Respondent did not bring an indemnity claim. It is immaterial whether indemnity principles might have precluded this claim.