Fireison v. Pearson

520 A.2d 1046, 1987 D.C. App. LEXIS 297

• Court: District of Columbia Court of Appeals
• Decided: January 22, 1987
• Docket: 84-157
• Status: Published

Opinions

PER CURIAM:

Upon consideration of appellee’s petition for rehearing en banc, the division sua sponte grants reconsideration. Having concluded that the rule of Piper v. Jenkins, 207 Md. 308, 314, 113 A.2d 919, (1955) (if “the means of knowledge are at hand, and the purchaser undertakes to make an examination of the land records, he cannot say that he was deceived and injured by misrepresentations of the vendor”) is controlling even in the absence of actual notice to the purchaser’s agent, see Shappirio v. Goldberg, 192 U.S. 232, 241, 24 S.Ct. 259, 261, 48 L.Ed. 419 (1904) (agent’s knowledge, actual or implied, imputed to purchaser); Ryan v. Brady, 34 Md.App. 41, 54, 366 A.2d 745, 752 (1976), we recall the mandate, vacate our opinion of January 29, 1986, and affirm the judgment of the trial court.¹ Because the purchasers, the Fireisons, undertook the responsibility of searching the title and preparing the deed, vendor Pearson had a complete defense to the allegations of fraud. Therefore, the trial court did not err in dismissing the action after the purchasers presented their case pursuant to Super.Ct. Civ.R. 41(b).

I

Appellants Louis and Bemadine Fireison brought action against appellee Luvie M. Pearson for fraud and breach of contract. The trial court, sitting without a jury, granted a defense motion to dismiss the case at the close of plaintiffs’ case. We will set forth the evidence as developed in plaintiffs’ case.

Louis Fireison had become aware in March of 1975 that the Merry-Go-Round farm in Montgomery County, Maryland, owned by Mrs. Drew (Luvie) Pearson, was for sale. He set up an appointment with Tyler Abell, Pearson’s agent and the developer of the tract, to inspect the property. Abell provided him with a plat of the farm, which showed a division of the property into 17 lots. The plat, which is dated June 1975, listed the area of Lot no. 6 as 5.1 acres. Abell showed Fireison the approximate boundary lines of all of the lots on the farm. The beginning and end of each lot were marked with steel stakes. Firei-son understood that these stakes had been laid out by a surveyor. Fireison became interested in lot 6, partly because of a row of tall, old trees that lined one side of the property. The boundary line between lots 5 and 6, according to Abell, began on the other side of the trees. Abell confirmed that the approximate area of lot 6 was 5.1 acres and, according to Fireison, led him to believe that the June 1975, plat that he had showed him had already been recorded in the Montgomery County land records.

Pearson, the owner of the property, offered Fireison a five-year option to buy lot 6, and Fireison, an attorney, drafted on option contract that the parties signed in October of 1975. Paragraph 13 of the contract provided that “Vendor agrees to deliver the subject property in its recorded size consisting of approximately 5.1 acres.” Other sections of the contract provided that copies of any surveys or plats of the property that might be ordered by the owner would be delivered to Fireison in advance of settlement (para. 5); and that an exact topographical survey would be made by the owner and a copy furnished Fireison (para. 7). The June 1975 plat that Fireison understood had been recorded was attached to the option contract. This plat had never been recorded.

Prior to exercising the option, Fireison visited the property on numerous occasions, and never observed any change in the stakes that marked out the boundaries of lot 6. In April of 1976, unbeknownst to Fireison, however, Abell changed the boundaries of lot 6. Lot 5 had remained unsold, so Abell sliced off the part of lot 6 that included the trees and appended it to lot 5 to make it more marketable. In addition, he cut off part of the back of lot 6 so that he would be able to create two lots behind lot 6 instead of an existing one. Lot 6 in its pared down form was 4.5964 acres. Abell must have had a survey prepared of the new boundaries of the lot,² for on November 6, 1978, he recorded a new plat in the Montgomery County land records, showing the area of lot 6 as 4.5964 acres. No copy of the plat or of the survey was furnished to Fireison, however, as the option contract required; indeed, no notice at all was given to Fireison that the June 1975 plat, which he thought was recorded, had been superseded, and that the acreage and boundaries of the property subject to the option had been changed significantly.

On December 15, 1978, five weeks after Abell had the new plat recorded, the parties proceeded to settlement on the property. At settlement, the owner gave Fireison no indication of the change in the acreage and boundary lines of his property; neither a new survey nor the new plat was provided him. The option contract, however, had provided that the property would “be conveyed as designated by Vendees and Vendees hereby authorize the examination of the title and preparation of all necessary conveyance papers.” Fireison had assumed the burden of searching the title of the property, and he entrusted this duty to an attorney, who also prepared a deed. The deed affected the conveyance of: “the following described land and premises ... namely: Lot numbered Six (6) in the Subdivision known as ‘MERRY-GO-ROUND FARM,’ as per plat recorded in Plat Book 106 at Plat No. 12150 among the Land Records of Montgomery County, Maryland.” The designated plat, recorded by Pearson on November 6, 1978, on its face clearly states the area of lot 6 as 4.5964 acres. According to Fireison, the lawyer searched the title only for outstanding liens, and found none. The deed included no physical description of the lot, but referred to the plat book and number.

After taking possession of the property, Fireison received a county property tax bill, in 1979, that he thought seemed too low. He contacted the tax assessor’s office and was informed that the acreage of his lot was only 4.5964 acres. He called Abell, who related how he had reshaped the lot to make other lots attractive, as described above, and then told Fireison “just ... to forget about it. He said I wasn’t using the land anyway and it was nothing extra out of my pocket, just told me to forget about it.” Since the trial judge dismissed the action at the close of plaintiffs’ case, the defense never presented its evidence. This appeal followed.

II

The trial court issued findings of fact and conclusions of law following the close of plaintiff’s case, dismissing the action under Super.Ct.Civ.R. 41(b). Under that rule, the court may dismiss an action if “upon the facts and the law the plaintiff has shown no right to relief.” Carrigan v. Purkhiser, 466 A.2d 1243, 1245 (D.C.1983). Judgment for a defendant under Rule 41(b) is justifiable if “there is insufficient credible evidence to sustain each element of plaintiff’s claim, or if, despite such credible evidence, a valid defense is evident from plaintiff's own case.” Marshall v. District of Columbia, 391 A.2d 1374, 1379 (D.C.1978). In an appropriate case, dismissal under Rule 41(b) will serve to avoid the unnecessary presentation of a defense case where it is already apparent to the trial judge that the plaintiff cannot prevail.³ We have recognized, on the other hand, that a dismissal under Rule 41(b) is a “drastic remedy, to be sparingly exercised.” Bay General Industries, Inc. v. Johnson, 418 A.2d 1050, 1054-55 (D.C.1980). “[Sjound procedure in most cases requires withholding adjudication on the merits until both sides have presented their evidence.” Warner Corp. v. Magazine Realty Co., 255 A.2d 479, 481 (D.C.1969); Darden v. Capitol Cab Cooperative Association, 154 A.2d 352, 354 (D.C.1959).

The trial court based its dismissal on two alternative grounds. It concluded, first, that the Fireisons had not set forth a prima facie case of fraud. The court found that “[wjhile the defendant should have pointed out that the defendant re-drew the lot lines for their own advantage, they engaged in no direct deceit.” Memorandum Opinion and Order at 2. The court also found that even if plaintiffs had established all of the elements of fraud, their own case demonstrated that the defendant had a valid es-toppel defense to the action. The court noted that since the new plat showing lot 6 to be 4.5964 acres had been recorded prior to settlement, the Fireisons’s settlement attorney, who was responsible for a title search, was “charged with notice of all that appears in the properly recorded chain of title.” This notice is imputable to the Firei-sons. By accepting the burden of the title search, the court held, the Fireisons had also accepted the “risk of failing to do so,” i.e., the risk of failing to uncover that the boundaries and size of the lot had been changed without notice to them.

The court also decided that since the option contract stated that the vendor agreed to provide the property in its “recorded size consisting of approximately 5.1 acres,” that the Fireisons had “freely contracted” to accept the property in whatever size it had been recorded. The court also found that “the plaintiffs proceeded to settlement in spite of the defendant’s nonperformance [of the agreement to send copies of any new surveys and plats], thus waiving the right to receive the survey from the defendant prior to settlement.” The court impliedly found that since the Fireisons had undertaken the search of the title the plat book and number listed in the deed were sufficient notice to them that the boundaries and acreage of this property had been changed; that their proceeding to settlement on this deed worked an implied acceptance of the new, restricted boundaries of the property; and that their prior dealings with Abell merged into the deed, preventing them from now raising any challenges to the sale.

Ill

Under Maryland law, the purchaser of property is required neither to examine the land records, nor survey the land, in order to determine the correct acreage. See Piper v. Jenkins, supra, 207 Md. at 312, 113 A.2d at 921. The purchaser clearly has a right to rely on the vendor’s representations as to the boundaries and acreage of the land. Id. Even when the means of ascertaining the falsity of the vendor’s representations are known and accessible, the purchaser’s failure to review the land records will not bar his recovery. See Chesapeake Homes, Inc. v. McGrath, 249 Md. 480, 240 A.2d 245, 248-49 (1968).

If, however, “the means of knowledge are at hand, and the purchaser undertakes to make an examination of the land records, he cannot say that he was deceived and injured by misrepresentations of the vendor.” Piper v. Jenkins, supra, 113 A.2d at 922 (emphasis added); accord Ryan v. Brady, 34 Md.App. 41, 56, 366 A.2d 745, 753 (1976); see also Boring v. Jungers, 222 Md. 458, 462, 464, 160 A.2d 780, 783-84 (1960) (sale may not be rescinded even if founded on misrepresentations of vendor when purchaser knew facts; knowledge of agent imputable to purchaser); Glendale Corp. v. Crawford, 207 Md. 148, 154, 114 A.2d 33, 36 (1955) (purchaser has right to rely on vendor’s representation “in the absence of any knowledge of his own”); Gunby v. Sluter, 44 Md. 237, 249 (1876) (purchaser may not rescind sale, even though founded on misrepresentations, if prior to sale purchaser acquainted with facts). Thus, the crucial question is whether Fireison — by himself or through his agent — undertook an examination of the land records.

The controlling question just identified is not restricted to cases of negligent or innocent misrepresentation. Rather, the Court of Appeals for Maryland enunciated the “undertaking” principle in Piper v. Jenkins, a case in which the purchaser alleged that the vendor had made a fraudulent misrepresentation. 207 Md. at 312, 113 A.2d at 921. Moreover, in Ryan v. Brady, the Court of Special Appeals of Maryland reiterated the principle of Piper v. Jenkins, that “once the purchaser assumes the burden of an examination he cannot say that he was deceived to his injury where such examination discloses the correct information.” Ryan v. Brady, supra, 34 Md.App. at 55, 366 A.2d at 753. Most important, both Piper v. Jenkins and Ryan v. Brady adopted that principle from the Supreme Court opinion in Shappirio v. Goldberg, 192 U.S. 232, 24 S.Ct. 259, 48 L.Ed. 419 (1904). Shappirio involved a claim of fraud, and the principle it enunciates is dispositive of the instant case.

In Shappirio, the purchaser alleged that the vendor falsely represented that the property adjacent to the purchased lot was included in the sale. 192 U.S. at 234, 24 S.Ct. at 260. A correct description of the property was, however, given in the deed and in the recorded chain of title. Id. at 241, 24 S.Ct. at 261. As in this case, the agent of the purchaser was entrusted with the examination of the deed and title. The Court explained that the agent was charged with the knowledge of the extent of the property conveyed since he undertook an examination of the deed and records. Id. The Court observed that a casual reading of the deed or recorded plat would have revealed the dimensions of the property. Id. The agent’s knowledge, actual or implied, was imputed to the purchaser. Id. The Court stated:

There are cases where misrepresentations are made which deceive the purchaser, in which it is no defense to say that had the plaintiff declined to believe the representations and investigated for himself he would not have been deceived. But such cases are to be distinguished from the one under consideration. When the means of knowledge are open and at hand or furnished to the purchaser or his agent and no effort is made to prevent the party from using them, and especially where the purchaser undertakes examination for himself, he will not be heard to say that he has been deceived to his injury by the misrepresentations of the vendor.

Id. at 241-42, 24 S.Ct. at 261 (emphasis added) (citation omitted). Here, too, a reading of the recorded plat would have revealed at once that plat 6 measured 4.6 acres. The vendors here did not prevent that reading, nor did they suggest the wording of the deed; rather the Fireisons’ attorney undertook to describe the conveyance of property by referring to the recorded plat. Once the attorney undertook such an examination, she and her principals were charged with the knowledge imparted by the land records.

Chesapeake Homes, Inc. v. McGrath, 249 Md. 480, 240 A.2d 245 (1968), is not to the contrary. There is no indication in that opinion that the purchaser there undertook a title search or preparation of the deed. Certainly, the decision does not suggest a rejection of the Shappirio doctrine. The vendors in Chesapeake Homes did not assert that the purchaser undertook a title examination or deed preparation as in Shappirio, but contended that the purchaser could not seek relief from the deed when he failed to look at the referenced plat that he knew was posted at the vendor’s office and filed at the land records office. 249 Md. at 489, 240 A.2d at 250. In holding in Chesapeake Homes that the vendor could not assert the failure of the purchaser to inform him or herself of land records when effort was made to prevent the purchaser from using them, the Maryland Court of Appeals ruled in a manner consistent with Maryland law and with Shappirio, 192 U.S. at 241, 24 S.Ct. at 261. Therefore, the holding of Chesapeake Homes does not assist appellants here.

In the present case, however, not only did the Fireisons’ attorney undertake to examine the land records for a title search, she undertook to describe the parcel to be conveyed by the deed. Because, as she drafted it, the deed conveyed the lot as “per plat recorded in Plat Book 106 at Plat No. 12150 among the Land Records of Montgomery County, Maryland,” it stretches credulity to suggest that she did not look at that plat.⁴ At the least, it was not clearly erroneous for the trial court to infer that she did. See Marshall v. District of Columbia, supra, 391 A.2d at 1379-80 (appellate court, pursuant to Super.Ct.Civ.R. 41(b) & 52(a), will not set aside trial court findings, unless they are clearly erroneous, with due regard to trial court’s opportunity to judge credibility).

Furthermore, even if the Fireisons’ lawyer did not actually look at the record plat, she was chargeable with notice once she undertook a title examination and preparation of the deed. See Shappirio v. Goldberg, 192 U.S. at 241-42, 24 S.Ct. at 261. Again, appellants suggest a distinction in Ryan v. Brady that the Maryland court itself did not hold dispositive. The purchaser’s lawyer there at first could not recall whether he actually viewed the plat. He thereafter admitted, however, that he saw it. 34 Md.App. at 54, 366 A.2d at 752. The court stated that either the actual or implied notice of the lawyer would be imputed to his client: “a title examiner is charged with notice of whatever appears in the land records in the chain of title to the property involved_ [Njotice to an attorney is notice to his client.” Id. (citations omitted); see Williams v. Skyline Development Corp., 265 Md. 130, 164, 288 A.2d 333, 353 (1972).

Therefore, even if, arguendo, we assume a fraudulent misrepresentation on the part of the vendor, the undertaking by the Firei-sons through their attorney to examine the title and describe the property in the deed defeats their claim that they were deceived to their injury. The trial court’s judgment, therefore, should be affirmed.

Finally, we are aware that as the record stood at the close of plaintiffs’ case, there was substantial evidence of misleading conduct on the part of defendant’s agent. That evidence might or might not have been overcome by defendant’s evidence. But the trial judge was not obliged to hear the defendant’s case because plaintiffs’ case-in-chief had demonstrated that defendant was entitled to judgment. As we discussed above, Super.CtCiv.R. 41(b) authorizes a trial judge, sitting without a jury, to weigh the evidence and consider credibility when a defendant moves to dismiss at the close of the plaintiff’s case. We are satisfied that the trial judge did not err in dismissing appellants’ suit.

Accordingly, the mandate is hereby recalled, our opinion of January 29, 1986, is vacated, and the judgment is affirmed.

So ordered.

1 . The dissent questions the propriety of the action of this division in granting rehearing and recalling the mandate. Part XI (A) of the Internal Operating Procedures of the District of Columbia Court of Appeals provides:

The filing of a petition for rehearing en banc does not take the case out of the plenary control of the division deciding the case. The division may, on its own, grant rehearing and may do so without action by the full court.

A majority of the division deciding the instant case agreed, pursuant to I.O.P. XI(A), to grant rehearing sua sponte. The parties were afforded the opportunity to brief the issues surrounding the recall of the mandate as well as, again, the substantive issues; both parties did so.

This litigation has not yet come to an end in this court. Appellants’ petition for rehearing en banc is being denied concurrently with the entry of this opinion. Therefore, we deem inappo-site those authorities cited in today’s dissent that hold that good cause must exist for reviving a case that has been fully and finally adjudicated in an appellate court. In the federal courts, any petition for rehearing, by the panel or by the court en banc, stays the mandate. Fed.R.App. P. 41. Our rules, to the contrary, provide for the stay of the mandate only upon the timely filing of a petition for rehearing by the division. The pendency of a petition for rehearing en banc, of itself, does not stay the mandate. D.C.App.R. 41. Our complementary internal operating procedures, quoted above, however, give the division the authority to grant rehearing whenever a petition for rehearing en banc is filed. The power to recall the mandate inheres in the power to grant rehearing.

Appellants have been afforded due process. The parties have been aware that a petition for rehearing en banc has been pending before this court. In addition, they submitted legal memo-randa on the mandate issue and the substantive issue. The fact that this litigation remained before this court under our rules and internal operating procedures renders the case amenable to action by the division.

The dissent three times mentions that a year has gone by since the original ruling of the court. In that regard, it should suffice to say that the majority determined that it should affirm well before a year had passed.

2 . See 2 Montgomery County Code § 50-10 (1984) (surveyor’s certificate must accompany recorded plat).

3 . In Marshall v. District of Columbia, supra, 391 A.2d at 1379 we said:

[W]hen a defendant makes a Rule 41(b) motion in a nonjury trial, the court, as trier of fact, need not view the evidence in the light most favorable to the plaintiff. The court, rather "weighs the evidence and considers credibility the same as it would at the end of the trial." Warner Corporation v. Magazine Realty Co., D.C.App. 255 A.2d 479, 481 (1969). See Ellis v. Carter, 328 F.2d 573 (9th Cir.1964). The court, therefore, need not consider plaintiffs evidence as true, and if it finds that the evidence does not preponderate in plaintiffs favor, the court can enter judgment for the defendant.

4 . In Ryan v. Brady, supra, 34 Md.App. at 53, 366 A.2d at 752, purchaser’s attorney, who searched title, acknowledged that it was obvious that he saw the recorded plat before drafting the deed and other papers. The trial judge in that case had stated: “[T]he Court cannot conceive of a conscientious title attorney ... engaged in a transaction of this size and character [sale of house and lot for $240,000], failing to read the recorded plat of subject property preparatory to drawing the contract of sale and deed and guaranteeing the title_" Id. at 754.