Todd Donohue Obtains Summary Judgment for Title Company Client, Plus Plaintiff to Pay Attorney’s Fees

Background

Plaintiff claimed that it was the purchaser in a ranch land deal in Jack County, Texas involving two tracts totaling approximately 1365 acres. The sellers in the transaction – a trust and an estate – required that the two tracts be closed simultaneously under two separate contracts. The trust contract was escrowed with our title company client. That contract contained a special provision making it contingent on a simultaneous closing with a contract on the estate property with Plaintiff as buyer.

There were issues with the estate property contract and a dispute between the Plaintiff and estate as to whether a contract on the estate property was ever legally delivered from the estate to Plaintiff. A contract between the estate and Plaintiff was never placed in escrow with our client title company. The deal between Plaintiff and the estate fell through and another buyer ultimately purchased the estate’s property.

Our title company client closed that sale of the estate’s property. Plaintiff sued our title company client alleging it breached its duties as an escrow agent by closing on the estate property with a different buyer while holding the trust property contract in escrow with Plaintiff identified as buyer.  Plaintiff argued that the simultaneous closing clause in the trust property contract created escrow agent duties with respect to the estate property even in the absence of an escrowed contract on the estate property reflecting Plaintiff as buyer.

Plaintiff also sued the title company for tortious interference with its purported contract on the estate property. Plaintiff claimed damages in excess of $3.5 million due to its lost opportunity to develop the 1365 acres.

Analysis

The court had to determine if the escrowed contract on the trust property, given its simultaneous closing contingency clause, created escrow agent duties for our title company client with respect to Plaintiff and the estate property even though no contract was ever escrowed with the title company involving the estate property and Plaintiff.

The court ultimately granted summary judgment in favor of title company on Plaintiff’s claims for negligence and tortious interference with contract and title company’s affirmative claim for attorney’s fees based on contract forming the basis of escrow agent relationship. Additionally, the terms of the escrowed contract on the trust property allowed our title company client to recover its attorneys’ fees and costs associated with the litigation because the dispute arose out of and related to the trust contract. The court awarded our title company client its attorneys’ fees and costs, including the costs associated with employing an expert witness.