Case Title: HULSE v. FIRST AMERICAN TITLE COMPANY

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 2001-10-12T00:00:00Z

Document:
HULSE v. FIRST AMERICAN TITLE COMPANY2001 WY 9533 P.3d 112Case Number: 99-256, 99-265Decided: 10/12/2001

October Term, A.D. 2001

RAYMOND 
M. HULSE and KRISTINA                   

HULSE, f/k/a KRISTINA BOVA,

Appellants(Plaintiffs),

v.

FIRST 
AMERICAN TITLE COMPANY

OF 
CROOK COUNTY, f/k/a FIRST

AMERICAN 
TITLE GUARANTY AGENCY

OF 
CROOK COUNTY; FIRST AMERICAN

TITLE 
INSURANCE COMPANY; and

BHJ, INC.,

Appellees(Defendants).

FIRST 
AMERICAN TITLE COMPANY                   

OF 
CROOK COUNTY, f/k/a FIRST

AMERICAN 
TITLE GUARANTY AGENCY

OF CROOK COUNTY,

Appellant(Defendant),

v.

RAYMOND 
M. HULSE and KRISTINA

HULSE, f/k/a KRISTINA BOVA,

Appellees(Plaintiffs).

Appeal 
from the District Court of Crook County:

The 
Honorable Keith G. Kautz, Judge

Representing 
Appellants Hulses:

Stephen 
H. Kline of Kline & Jenkins, Cheyenne, WY; and Michael P. Reynolds and Brad 
A. Schreiber of Quinn, Day & Barker, Rapid City and Belle Fourche, SD, 
respectively.  Argument by Mr. 
Schrieber.

Representing 
Appellee First American Title Co.:

Barry 
G. Williams and Kevin D. Huber of Williams, Porter, Day & Neville, Casper, 
WY.  Argument by Mr. Williams.

Representing 
Appellee BHJ, Inc:

James 
R. Bell and Kathleen J. Swanson of Murane & Bostwick, Casper, WY.  Argu­ment by Ms. 
Swanson.

Before 
LEHMAN, C.J., and GOLDEN, HILL and KITE, JJ.

  

LEHMAN, 
Chief Justice.

[¶1]      In these 
consolidated appeals we first determine the manner in which a private road, 
established pursuant to Wyo. Stat. Ann. § 24-9-101 et seq., is 
vacated.  We will then analyze the 
effect our determination has upon the plaintiffs' causes of action.  

[¶2]      In case number 
99-256 plaintiffs/appellants Raymond and Kristina Hulse appeal the district 
court's grant of summary judgment for defendants First American Title Insurance 
Company, its issuing agent First American Title Insurance Company of Crook 
County (col­lectively, First American), and BHJ, Inc., a real estate 
brokerage, on their claims of breach of contract, bad faith, fraud, and 
negligent misrepresentation.  This 
case presents the novel issue whether the issuance of a title commitment and 
subsequently issued title insurance policy give rise in Wyoming to a tort cause 
of action against the title insurer and/or its issuing agent separate and apart 
from the contractual obligations of the title policy.  It also requires us to address the scope 
of the duty owed by a licensed real estate broker to non-client purchasers. We 
affirm the district court's grant of summary judgment as applied to defendant 
First American, but vacate and remand for further determination as to the real 
estate brokerage, BHJ, Inc.  

[¶3]      In case number 
99-265, the defendants cross-appeal the district court's holding that a private 
road providing access to the Hulses' property had been properly vacated by a 
recorded, written agreement of the previous landowners.  We reverse the district court's 
holding.  

ISSUES

99-256

[¶4]      
Plaintiffs/appellants Hulses present this statement of the 
issues:

1.  Whether a genuine issue of material fact 
exists precluding summary judgment on Hulses' claims of breach of contract, bad 
faith, fraud and negligent misrepresentation against First Ameri­can Title 
Company of Crook County, f/k/a First American Title Guaranty Agency of Crook 
County, First American Title Insur­ance Company.

2.  Whether a cause of action exists for 
negligent search and dis­closure.

3.  Whether a genuine issue of material fact 
exists on Hulses' claim of fraud and negligent misrepresentation against BHJ, 
Inc.

4.  Whether a genuine issue of material fact 
exists precluding summary judgment concerning the causation of any of Hulses' 
damages.

Defendant/appellee 
First American restates the issues:

1.  Was the District Court correct in its 
findings that the alleged actions of First American resulted in no damages to 
the Hulses or in the alternative that any damages were caused by the actions of 
the Hulses themselves?

2.  Was the District Court correct in ruling 
as a matter of law that no cause of action exists in Wyoming for negligent 
search and disclosure by a title insurance agent?

3.  Was the District Court correct in its 
finding that no genuine issue of material fact existed with respect to the 
Hulses' claims for fraud and negligent misrepresentation against First American 
and therefore First American was entitled to judgment as a matter of 
law?

Defendant/appellee 
BHJ, Inc. states the issues:

A.  Did the trial court properly rule that 
plaintiffs cannot recover for fraud or misrepresentation when they cannot prove 
any reli­ance on any representations by BHJ, Inc. about the subject property 
and cannot demonstrate loss or damage as a result of any 
misrepresentation?

B.  Did the district court err in its 
finding that as a matter of law, affected parties could vacate a private road 
established [sic] the Board of County Commissioners without County Commissioner 
approval?

99-265

            
Defendant/appellant First American presents this statement of the 
issues:

A.  Did the trial court err in its finding 
that as a matter of law affected parties could vacate a private road established 
by the Board of County Commissioners?

B.  Did the district court err in its 
finding that as a matter of law affected parties could vacate a private road 
established by the Board of County Commissioners without County Commissioner 
approval?

Plaintiffs/appellees 
Hulses accept appellant's statement of the issues.

FACTS

[¶5]      Pursuant to our 
standard of review for summary judgments, the recitation of facts is from the 
vantage point most favorable to the plaintiffs, as the party opposing the 
motions, awarding them all favorable inferences that may be drawn from the 
facts.  S & G Investors, LLC 
v. Blackley, 994 P.2d 941, 943 (Wyo. 2000).   

[¶6]      The case before 
us arises out of the 1994 purchase of a 2,080-acre ranch in Crook County, 
Wyoming known as the "Tumbling T" by plaintiffs Raymond and Kristina Hulse from 
William Moore.  Access to this 
property is the focus of the parties' dispute; therefore, a discussion of its 
history is appropriate.  

[¶7]      In 1988, William 
and Phyllis Russell, Moore's stepfather and mother, owned the Tumbling T.  At the time the property did not have 
access to a public highway so the Russells petitioned the Crook County 
Commissioners to declare a private road across the property of their neighbors, 
Albert and Lorene Neiman.  In 
December of 1988, pursuant to Wyo. Stat. Ann. § 24-9-101 (Lexis 1999), the Crook 
County Commissioners granted the pri­vate road to the Russells on an already 
existing road that traversed the Neimans' property (hereinafter referred to as 
the Russell Private Road). Mr. Neiman objected to this grant because the private 
road was located on the east side of Whitetail Creek in an area where he kept a 
herd of buffalo.  He contended that 
fencing of the private road was required and would effectively prohibit him from 
using Whitetail Creek to water his livestock.  Mr. Neiman then appealed the 
Commissioners' grant of the private road to the district court, which affirmed 
the Board's decision to establish the road but reversed its order on the measure 
of damages. 

[¶8]      Following these 
developments, Mr. Neiman proposed to the Russells that he establish another road 
on his property on the west side of Whitetail Creek which would give them access 
to the Tumbling T.  On November 21, 
1989, the Neimans signed and filed with the clerk of record a private easement 
and right of way granting the Russells a restricted ease­ment across their 
property limited solely to "farming and ranching purposes" (hereinafter referred 
to as the Neiman restricted easement).  In November of 1990, while awaiting the 
district court's decision on appeal of the measure of damages for the private 
road, the Neimans and Moore (now in possession of the Tumbling T) signed a 
"settlement agreement."  The 
agreement provided that Moore would take the necessary steps to withdraw his 
request for the private road previously established by the county commissioners 
in exchange for which the Neimans would agree to dismiss their appeal and to 
consent to the establishment of a road across to "the school section" as a 
continuance of the easement previously granted by them.  The parties agreed to execute the 
necessary documents to carry out the intent of their agreement.1  On June 4, 1991, Moore and the Neimans 
signed an "Agreement to Vacate Private Road" which purported to vacate the 
previously established private road and consider the Commissioners' order null 
and void.  This document was filed 
with the clerk of record on September 9, 1991. 

[¶9]      We now turn to 
the facts surrounding the Hulses' purchase of the Tumbling T ranch.  Ray Hulse and Bill Moore became 
acquainted when Hulse visited Wyoming to hunt.  On these occasions Hulse often expressed 
an interest in purchasing the ranch from Moore.  In a telephone conversation with Moore 
in 1994, Hulse learned that Moore had listed the property with BHJ, Inc., a real 
estate agency in Sheridan.  Edward 
"Amory" Hubbard was the listing agent, and the ranch was priced at 
$975,000.  Hulse continued to reside 
in Pennsylvania before the purchase and communicated with the parties in Wyoming 
generally by phone or fax with occasional visits.  Hulse testified in deposition that at 
all times he intended to pur­chase the ranch for the purpose of operating a 
commercial hunting and outfitting business, bed and breakfast, and sporting 
goods shop.  He further testified 
that he and/or Moore, more than once prior to and after signing a purchase 
agreement for the Tumbling T on May 24, 1994, had informed real estate agent 
Hubbard of Hulse's intended purpose for the ranch.  In May of 1994, Moore assisted Hulse in 
his effort to obtain an outfitter's license by sending a letter of 
recommendation to the Wyoming State Board of Outfitters and Professional Guides. 

[¶10]   On May 24, 1994, Hulse signed a 
purchase agreement contracting to purchase the Tumbling T for $800,000.  This agreement was written and provided 
by BHJ, Inc. and con­tained a standard disclaimer stating that the 
"Purchaser is not relying upon any representa­tions of the Seller or 
Seller's agents or sub-agents as to any condition which Purchaser deems to be 
material to Purchaser's decision to purchase this property." 

[¶11]   The contract further provided in 
the section entitled "C.  Objection 
Resolution:"

If 
written objections to defects of the property, signed by purchaser, are 
delivered to Broker within such period and if Seller and Purchaser have not 
executed a written agreement which satisfies and resolves such objection(s) on 
or before the 5th  day of 
August, 1994 this contract shall be void and the ear­nest 
money deposit shall be returned to Purchaser.

D.        Other 
than written objections raised by Purchaser as set out above, or in the event no 
inspections are required by Pur­chaser, Purchaser acknowledges that he has 
not been denied any opportunity to inspect property and has done so to his 
satisfac­tion.  Purchaser 
accepts the property in its entirety in "as is, where is" condition without any 
implied or express warranty by Seller or Agent.

Also on May 24, 1994, Hulse signed a Real Estate 
Brokerage Disclosure Statement that stated Mr. Hubbard was acting as the 
seller's agent. 

[¶12]   Hulse sought to finance the 
purchase of the ranch from a bank in Gillette, Wyoming. In a letter dated May 
18, 1994, he informed the president of the bank of his intent to use the 
property as a guest ranch and commercial hunting operation.  In June, the bank president telephoned 
Mr. Hubbard, the seller's agent, and notified him of a potential access problem 
with the property that must be resolved before the bank would issue the 
loan.  Hubbard's handwritten note of 
June 6, 1994, states:  "First 
Interstate Bank will not issue loan without unconditional easements through 
neighbors, i.e., all-purpose for guests, hunters and ag."  Mr. Hubbard began to investigate the 
access issues and discovered that there had been long standing problems about 
the roadways into the ranch.  He 
then contacted Marie Jackson, an employee of defendant First American Title 
Insurance, and asked her to provide him with documentation regarding access to 
the Tumbling T.  Hubbard testified 
in deposition that Marie Jackson told him that there were some definite problems 
which would have to be resolved before she could issue a clear title. 

[¶13]   After being supplied a copy of all 
the recorded documents, including the grant of restricted easement and Agreement 
to Vacate the Private Road, Hubbard sought the advice of an attorney regarding 
the property's access issues.  The 
attorney prepared a document to be signed by the Neimans and Moore entitled 
"Amendment to Agreement to Vacate Private Road."  The amendment clarified that the 
original Agreement to Vacate signed by the parties in 1991 was meant to vacate 
only that portion of the private road that crossed the Neiman property.  On July 13, 1994, the Hulses were with 
Moore at a local bar when Hubbard sought to get Moore's signature on the 
Amendment.  This was the first time 
the Hulses had met Hubbard in person.  
The agent, in the Hulses' presence, spoke generally and briefly about the 
document "taking care of the right of way problem."  According to Hubbard, the document was 
not shown to the Hulses.  The Hulses 
testified in deposition that they understood the purpose of having the parties 
sign the document was to "sign off" on the vacated road, so that they would be 
able to use the new road to access the property.  The new road with the restricted 
easement was the one habitually used by Moore and the Hulses to access the 
Tumbling T.  Neither at this meeting 
nor at any other time before closing were the Hulses informed that the new road 
was restricted to non-commercial use.  
Nor were the Hulses given copies of the documentation Hubbard provided to 
his attorney.

[¶14]   Following the signing of the 
document, Hubbard's attorney sent a letter dated July 19, 1994, to the bank 
president.  In the letter he 
states:  "I believe we now have the 
necessary documents in place which make it clear that access exists across 
Neiman and Paradis proper­ties.  
I have been working with Marie Jackson of First American Title Company, 
and she has informed me that she will issue a title commitment which does not 
contain an exception for access.  In 
my opinion there is legally enforceable access to the Tumbling T ranch across 
both the Neiman and Paradis properties." 

[¶15]   On July 19, 1994, First American 
Title Insurance Company issued a title insurance commitment No. 18-9334 naming 
the Hulses as proposed insureds.  
The restriction on the Neiman easement was not listed on the commitment, 
nor was it ultimately listed as an exception on the issued title insurance 
policy No. 18-03038-0 which insured the Hulses against "lack of a right of 
access to and from the land."  Hulse 
testified in deposition that after eventually learning of the restriction he 
asked Marie Jackson why it was not listed on the title insurance commitment or 
policy.  According to Hulse, she 
told him that Amory Hubbard said, because the Amended Agreement had been signed 
by Moore and Neiman, the access issue had been resolved; therefore, the 
exception did not have to be listed, so she should omit it.  Both Marie Jackson and Amory Hubbard deny 
this fact.  Marie Jackson 
testi­fied in deposition that she did not know of the restriction until 
after she had issued the policy. 

[¶16]   Closing on the property took place 
on August 9, 1994.  Present were the 
Hulses, Moore, Hubbard, another employee of BHJ, Inc., and First Interstate 
Bank's president.  Hulse testified 
that he passed out brochures for his new outfitting guest ranch business.  At some point, the bank officer asked 
Hubbard if all the access problems had been settled. Hubbard replied stating 
that [the attorney he consulted] had taken care of it.  Mr. Hulse testi­fied in deposition, 
and no party disputes, that this was the first time Hulse had heard the 
attorney's name mentioned.  He then 
asked, who is [the attorney].  
According to Hulse, the bank president then told him that [the attorney] 
was the bank's attorney and he just checked the documents.  Hulse then pointedly asked Hubbard and 
the president, "is there anything thaton this switching [the access or 
abandoning the right of way] that would stop us from running our business?"  Hulse was assured that everything was 
taken care of. 

[¶17]   In April of 1995, Ray Hulse applied 
to the Wyoming Board of Outfitters for a hunting permit on "the school section," 
which was accessed across the Neiman property.  He received a copy of a letter authored 
by Mr. Neiman to the Board dated June 8, 1995, object­ing to the issuance of 
the permit.  The letter stated that 
the only vehicle access to the section was across Neiman's deeded land and Hulse 
had only a 30' easement across the Neiman property which was solely limited to 
farming and ranching operations conducted on Hulse's own described 
property.  In the letter, Neiman 
vigorously objected to pedestrians and hunters crossing land where he kept his 
buffalo herd. 

[¶18]   The Hulses contacted all the 
parties and asked for an explanation as to why they were not informed before 
closing about the restricted easement.  
They also expressed great con­cern that their commercial business was 
violating the easement.  Hulse was 
unsure whether to continue to spend funds improving the Neiman restricted 
easement road.  In a letter to 
Moore, Hulse stated that he would escrow his mortgage payments on the second 
mortgage held by Moore until the dispute was resolved and he was given 
unrestricted access across the easement.  
The Hulses voluntarily stopped making mortgage payments to Moore. The 
Hulses continued to pay their first mortgage to First Interstate 
Bank.

[¶19]   On August 18, 1995, the attorney 
originally consulted by Hubbard wrote a letter to First Interstate Bank's 
president on the issues raised by Hulse.  
He gave two opinions regarding the Hulses' access to the Tumbling T.  He first opined that the restricted 
easement was not in fact restricted because it was for uses directly deriving 
from the dominant estate.  His 
opinion was that such uses would "include hunting, etc."  However, he believed that the 
right-of-way could not be used to access the school section because those uses 
would not be directly derived from the dominant estate.  His second opinion was that the Russell 
Private Road established by the county commissioners had not been vacated and 
was still in exis­tence. He also stated that "[t]he quality of the [private] 
road is certainly something that [the Hulses] are stuck with unless they want to 
improve it themselves."  It is 
unclear from the record whether Mr. Hulse was provided this correspondence prior 
to the onset of litigation.2 

[¶20]   In 1996, Moore began a foreclosure 
action against the Hulses.  The 
parties entered into a settlement agreement in which the Hulses agreed to give 
up their causes of action for misrepresentation against Moore regarding the 
purchase of the Tumbling T, to pay Moore $40,000 and his attorney's fees, and to 
pay him $365,000 by March 1, 1997.  
In return, Moore would reduce the amount owed to him under the second 
mortgage he carried on the property and transfer its deed to the Hulses.  Because of the extensive improvements 
the Hulses had made on the property, the Tumbling T appraised for 
$1,143,000$600,000 higher than it had prior to their purchase.  When the Hulses' allegedly promised 
financing from First Interstate Bank fell through days before payment was due, 
they failed to make full payment to Moore pursuant to the settlement agreement 
and were ejected from the property.3 

[¶21]   On June 10, 1997, the Crook County 
Attorney responded to an inquiry by the Hulses' attorney asking whether the 
Russell Private Road had been vacated.  
The county attorney explained that the private road had never been 
vacated by official action.  He 
stated that "[t]he Board of County Commissioners of Crook County asked me to do 
so in 1991.  I set up a procedure 
and a Notice of Hearing was sent out to the parties. The Board decided on August 
7, 1991 that the matter would be settled after all of the paperwork was 
completed . . . but the Board has never formally vacated the road." 

[¶22]   In June of 1998, after forming a 
partnership with an investor, the Hulses repurchased the Tumbling T for 
$1,050,000.  Through the sale they 
were given the title insurance policy issued to the sellers from First American 
Title Insurance Company.  It listed 
the Neiman restricted easement as an exception to the policy and "the lack of a 
right of access to and from the land which would result from the termination of 
said easements." 

[¶23]   At no time did Mr. Neiman ever 
physically restrict the Hulses from using the ease­ment.  However, Mr. Hulse signed an affidavit 
whereby he swore had he known that the road commonly used was restricted and 
that his legally enforceable access was the "unpassable" vacated private road, 
he would not have purchased the property.  
Currently, the Hulses access the Tumbling T through other surrounding 
properties they purchased and do not use the Neiman restricted 
easement.

[¶24]   On August 10, 1998, the Hulses 
brought suit against the defendants First American Title Company alleging breach 
of contract, negligence, fraud, and bad faith.  They allege defendant BHJ, Inc. is 
liable for negligent misrepresentation and committed fraud through 
misrepresentation and non-disclosure of the fact that the Neiman easement was 
restricted.  The district court 
entered summary judgment for the defendants on all claims.  This timely appeal and cross-appeal 
followed.

STANDARD 
OF REVIEW

[¶25]   Summary judgment is proper only 
when there are no genuine issues of material fact and the prevailing party is 
entitled to judgment as a matter of law.  
Unicorn Drilling, Inc. v. Heart Mountain Irr. Dist., 3 P.3d 857, 
860 (Wyo. 2000); Mountain Cement Co. v. Johnson, 884 P.2d 30, 32 (Wyo. 
1994); W.R.C.P. 56(c).  A material 
fact is any fact that, if proved, would have the effect of establishing or 
refuting an essential element of a claim or defense asserted by a party.  Century Ready-Mix Co. v. Campbell 
County Sch. Dist., 816 P.2d 795, 799 (Wyo. 1991).  We review a summary judgment in the same 
light as the district court, using the same materials and following the same 
standards.  "We examine the record 
from the vantage point most favorable to the party opposing the motion, and we 
give that party the benefit of all favorable inferences which may fairly be 
drawn from the record."  Unicorn 
Drilling, 3 P.3d  at 860 (quoting Four Nines Gold, Inc. v. 71 Constr., 
Inc., 809 P.2d 236, 238 (Wyo. 1991)).  
Summary judgment serves the purpose of eliminating formal trials where 
only questions of law are involved.  
Blagrove v. JB Mechanical, Inc., 934 P.2d 1273, 1275 (Wyo. 1997); 
England v. Simmons, 728 P.2d 1137, 1141 (Wyo. 1986).  We review a grant of summary judgment by 
deciding a question of law de novo and afford no deference to the district 
court's ruling on that question.  
Gray v. Norwest Bank Wyoming, N.A., 984 P.2d 1088, 1091 (Wyo. 
1999); Blagrove, 934 P.2d  at 1275; Sammons v. American Auto. 
Ass'n, 912 P.2d 1103, 1105 (Wyo. 1996).  

DISCUSSION

99-265

[¶26]   The district court granted summary 
judgment to the defendants, reasoning that because nothing in Wyoming's private 
road statutes indicates that an act of the county commissioners is required to 
vacate a private road and because Moore, the owner of the pri­vate road 
interest, clearly indicated an intent to abandon the private road, then Moore's 
aban­donment was effective.  Defendants First American and BHJ, Inc. 
appeal this conclusion and argue that official action by the board of county 
commissioners must be taken before a pri­vate road is vacated.  We agree that 
private parties cannot unilaterally vacate private roads established pursuant to 
Wyo. Stat. Ann. § 24-9-101 et seq. and hold that 
official action by the board of county commissioners that granted a private road 
is necessary to vacate it.

[¶27]   The version of Wyo. Stat. Ann. §§ 
24-9-101 and -103 in effect when the private road in question was established 
provided in pertinent part:

Any 
person whose land has no outlet to, nor connection with a public road, may apply 
in writing to the board of county commissioners of his county for a private road 
leading from his premises to some convenient public road. . . . Upon the hearing 
of the application, whether the owner or others interested appear or not, if the 
board finds that the applicant has complied with the law and that the private 
road is necessary, the board shall appoint three (3) disinterested freeholders 
and electors of the county, as viewers and appraisers, and shall cause an order 
to be issued directing them to meet on a day named in the order on the proposed 
road, and view and locate a private road according to the application therefor, 
and to assess damages to be sustained thereby . . . . 

Wyo. 
Stat. Ann. § 24-9-101 (Lexis 1999), and

The 
viewers and appraisers so appointed . . . shall make a report to the county 
commissioners . . . and if the commissioners are satisfied that such report is 
just, and after payment by the applicant of all costs of locating such road, and 
the damages assessed by the viewers, the commissioners shall order such report 
to be confirmed and declare such road to be a private road, and the same shall 
be recorded as such. 

Wyo. 
Stat. Ann. § 24-9-103 (Lexis 1999).

[¶28]   Clearly, the 
statutes are silent as to the method or procedure required to vacate or 
aban­don a private road.4  However, we believe the same public interest 
and purpose that sup­plies the constitutional foundation for the creation of 
a private road by the board of county commissioners, as well as general 
principles of administrative law, necessitate procedural protections afforded by 
requiring official action to vacate a private road previously granted by 
official action.  

[¶29]   This court has long declared that Wyo. 
Stat. Ann. § 24-9-101 et seq. is rooted in the 
concept of a private way of necessity as stated in the eminent domain provision 
of the Wyoming Constitution, art. 1, § 32, which provides:  "Private property 
shall not be taken for private use unless by the consent of the owner, except 
for private ways of necessity . . . nor in any case without due 
compensation."  
See Martens v. Johnson County Bd. of Comm'rs, 
954 P.2d 375, 379 (Wyo. 
1998); Reaves v. Riley, 782 P.2d 1136, 1137 (Wyo. 
1989); Snell v. Ruppert, 541 P.2d 1042, 1045-46 
(Wyo. 1975); Meyer v. Colorado Cent. Coal Co., 39 
Wyo. 355, 271 P. 212 (Wyo. 
1928).  Eminent 
domain is the State's right and power to appropriate private property to promote 
the general welfare.  
"Section 32, Art. 1, Wyoming Constitution is a recognition of the 
proposition that the uses there outlined while serving a private purpose 
indirectly benefit the general public.  A private use is by constitutional edict 
given the force and effect of a public use."  Coronado Oil Co. v. 
Grieves, 603 P.2d 406, 410 (Wyo. 1979) (citing Grover Irrigation & Land Co. v. Lovella Ditch, 
Reservoir & Irrigation Co., 21 Wyo., 204, 131 P. 43 (1913)).

[¶30]   In Snell v. 
Rupert, this court discussed the development of the use of eminent domain to 
establish a private road leading from the land of an individual to the nearest 
highway when he has no means of ingress and egress in any other manner.  We accepted the 
premise that "[t]here is a public interest in giving access by individuals to 
the road and highway network of the state as a part and an extension thereof for 
economic reasons and the development of land as a resource for the common good, 
whether residential or otherwise."  Id. 541 P.2d  at 
1046 fn.5 (citing 2A Nichols, The Law of Eminent 
Domain, (Rev. 3rd ed.) § 7.626).  See also Jon W. 
Bruce and James W. Ely Jr., The Law of Easements and 
Licenses in Land, (Rev. ed. 1995) § 4.02[4]. 

[¶31]   Wyoming's private road statutes provide 
the mechanism by which a landowner may petition the exercise of the State's 
eminent domain power to condemn a private road across another's property in 
order to establish access between his own property and a public road.  It is important to 
note the Wyoming Legislature, through its adoption of Wyo. Stat. Ann. 
§ 24-9-101 et seq., vested the State's eminent 
domain power, not in the landlocked land­owner, but in the board of county 
commissioners.  

[¶32]   In Bush v. 
Duff, we reversed what was in essence the grant of a private road by a 
dis­trict court as a violation of the separation of powers and reiterated, 
"the statute . . . grants the power and authority to establish a private road to 
the county commissioners in the respective counties.  Those proceedings 
are administrative in nature and a function of the executive department of 
government."  
Bush v. Duff, 754 P.2d. 159, 165 (Wyo. 1988) 
(footnote omit­ted) (overruled on other grounds, 
Ferguson Ranch, Inc. v. Murray, 811 P.2d 287 (Wyo. 
1991)).  We 
have long held that the board's entry of order granting or denying the creation 
of a private road is final agency action, appeals from which are governed by 
Wyoming's Administrative Procedures Act.5  Consequently, 
review by the district court is limited primar­ily to ensuring the board 
adhered to the governing statute and that its factual conclu­sions are 
supported by substantial evidence.  McGuire v. McGuire, 
608 P.2d 1278, 1285 (Wyo. 
1980); Miller v. Bradley, 4 P.3d 882, 886 (Wyo. 
2000).  
Accordingly, just as we decline to recognize the power of individual 
parties to nullify agency orders by private agreement in other arenas of 
administrative law, we likewise decline to do so merely because the agency order 
establishes a private road across an individual landowner's private property. 

[¶33]   Moreover, this court has held the right 
to condemn a way of necessity under constitu­tional and statutory provisions 
is an expression of public policy against landlocking property and rendering it 
useless.  See Coronado Oil, 603 P.2d  at 410 (citing Franks v. Tyler, 531 P.2d 1067 (Okla.App. 
1974)).  As a 
consequence, the statute provides that any grant of a pri­vate road under 
its provisions requires a finding by the board that the property owner seeking 
its creation has no legally enforceable access to a public road and that the 
private road is "necessary" before it may enter its order declaring the creation 
of the private road.  
Wyo. Stat. Ann. §§ 24-9-101, -103.  Therefore, we think the public policy against 
landlock­ing property that justifies exercise of the State's eminent domain 
power as given legislative effect within the private road statutes implicitly 
requires a contrary finding by the board of county commissioners before an 
established private road may be vacated.

[¶34]   In so holding, we recognize that the 
public's interest in promoting the productive use of land furthered by giving 
individuals access to the road and highway network of the state justifies the 
official declaration of a private road and its official vacation; however, we 
remain conscious of the fact that the property interest in the road created by 
the board of county commissioners at all times is a private interest.  See Nixon v. Edwards, 
72 Wyo. 275, 292-93, 264 P.2d 287, 294 (Wyo. 1953).  Moreover, this court is cognizant that the 
board of county commissioners has only those powers provided by statute.  Dunning v. Ankney, 936 P.2d 61, 64-65 (Wyo. 
1997); McGuire v. McGuire, 608 P.2d  at 1287. 

[¶35]   Accordingly, 
we expressly hold that a board of county commissioners' duties in vacating 
established private roads are principally ministerial.  The Board shall 
enter the order vacating a private road and cause such vacation to be entered in 
the public record upon the fulfillment of the following requirements.  First, the owner of 
the previously landlocked property, lack of access to which necessitated the 
creation of the private road, and any land­owner over whose property the 
private road passes must agree in writing to the vacation.  Second, the board 
must find that the affected property will continue to maintain alternate, 
legally enforceable, unrestricted access to a public road, such that the 
vacation will not cause landlocking of the property.  We are confidant 
the procedural safeguards put in place by this holding strike an appropriate 
balance between the public's interest in efficient use of the state's 
constitutional power of eminent domain and an individual landowner's interests 
in the unfettered use and enjoyment of his/her private property.6  

99-256

Claims against defendants First 
American

[¶36]   The Hulses contend that defendants 
First American owed them a duty, as the insureds under defendants' issued title 
policy, to search and disclose any reasonably discoverable defects and 
encumbrances of title.  They further contend this duty was breached 
when First American failed to list the recorded Neiman restricted easement on 
the commitment or policy and that this nondisclosure caused them substantial 
damages. "Essential to any negligence cause of action is proof of facts which 
impose a duty upon defendant.  The question of the existence of a duty is a 
matter of law for the court to decide."  Hamilton v. Natrona 
County Education Ass'n, 901 P.2d 381, 384 (Wyo. 1995) (quoting Goodrich v. 
Seamands, 870 P.2d 1061, 1064 (Wyo. 
1994)).  A duty 
may arise by contract, statute, common law, or when the relationship of the 
parties is such that the law imposes an obligation on the defendant to act 
reasonably for the protection of the plaintiff.  Hamilton, 901 P.2d  at 384; Goodrich, 870 P.2d  at 1064; Caterpillar Tractor Co. v. Donahue, 674 P.2d 1276, 1280 (Wyo. 
1983).

[¶37]   The Hulses first argue that the 
defendants' duty to search and disclose is implied by the contract itself, 
either from First American's issuance of its preliminary commitment or its 
listing of some defects in the title as implying to the insured that a search 
was made to uncover those defects.  We disagree.  This court has often stated when interpreting 
an insur­ance contract, we follow general tenets of contract 
construction.  
Ahrenholtz v. Time Ins. Co., 968 P.2d 946, 949 (Wyo. 
1998); Squillace v. Wyo. State Employees' and Officials' 
Group Ins. Bd., 933 P.2d 488, 491 (Wyo. 1997).  We delineated our rules of insurance contract 
con­struction in St. Paul Fire & Marine Ins. Co. 
v. Albany County Sch. Dist. No. 1, 763 P.2d 1255, 1258 (Wyo. 
1988) (citations omitted):

The 
interpretation of a written contract is done by the court as a matter of 
law.  An 
exception to construing insurance policies as other contracts has been observed 
by this Court where the lan­guage of the policy is ambiguous, in which case 
the policy must be strictly construed against the insurer.  Ambiguity, however, 
is not generated by a subsequent disagreement between the parties as to the 
meaning of the policy.  Further, the language of an insurance policy 
will not be "tortured" in order to create an ambiguity.

If 
the policy language is clear and unambiguous, the rule of strict construction 
against the insurer does not apply, and the policy must be interpreted in 
accordance with the ordinary and usual meaning of its terms.  The parties to an 
insurance contract are free to incorporate within the policy whatever lawful 
terms they desire, and the courts are not at liberty, under the guise of 
judicial construction, to rewrite the policy.

[¶38]   We have 
carefully read both the Commitment and the Policy issued by the defendant First 
American and cannot find any language expressing an intent to impose a duty to 
search the records for benefit of the insured, nor any language from which such 
a duty may be implied.  The information page attached to the 
Commitment expressly stated:  "the Title Insurance Commitment is a legal 
contract between you and the Company.  It is issued to show the basis on which we 
will issue a Title Insurance Policy to you.  The Policy will insure you against certain 
risks to the land title, subject to the limitations shown in the Policy."  

[¶39]   Plaintiffs point to the decisions of 
other courts holding that title insurance policies must be construed so as to 
give the insured the protection which they reasonably had a right to expect, 
thus implying a duty to search the record and disclose its findings to the 
insured.  
However, this court has declined to apply the "reasonable expectations" 
theory of recovery in insurance contract cases in the face of clear and 
unambiguous policy terms.  See Ahrenholtz v. 
Time Ins. Co., 968 P.2d 946, 949-50 (Wyo. 1998); Pribble v. State Farm 
Mutual Auto. Ins. Co., 933 P.2d 1108, 1113-14 (Wyo. 1997).  In the instant case, we find nothing in the 
lan­guage of the contracts between the parties which gives rise to even an 
ambiguity as to the defendants' obligation to search the record for the benefit 
of the insured; therefore, the doc­trine of reasonable expectations is 
inapplicable.  
Defendant First American clearly had no duty, express or implied, under 
the Commitment or the Policy to search the records, and any search it may have 
actually undertaken was undertaken solely for its own protection as indemnitor 
against losses covered by its policy.  Therefore, we hold that First American 
breached no contractual duty to the Hulses by failing to list the recorded 
Neiman restricted easement on either the Commitment or Title Insurance Policy 
issued to them.

[¶40]   The plaintiffs alternatively urge this 
court to recognize that the defendant American Title Insurance Company had a 
duty arising in tort to make a reasonable search of the record and disclose any 
defects and encumbrances of title to them as the insureds.  Whether a title 
insurer may be liable in tort for negligently failing to discover and disclose 
defects in title has been the subject of debate in many courts and commentary 
but is an issue of first impression before this court.  Courts in other 
jurisdictions are split on the question.  Some have con­cluded that a title company 
should be liable in tort if it negligently fails to discover and disclose a 
defect.  See e.g., Title Ins. Co. of 
Minnesota v. Costain Arizona, Inc., 791 P.2d 1086, 1090 (Ariz.App. 1990); Shada v. Title 
& Trust Co. of Florida, 457 So. 2d 553, 557 (Fla.App. 1984); Ford v. Guarantee Abstract & Title Co., Inc., 553 P.2d 254, 266 (Kan. 1976); Heyd v. Chicago Title Ins. Co., 354 N.W.2d 154, 158 (Neb. 
1984).  See generally, Joyce Dickey Palomar, Title Insurance Companies' Liability for Failure to Search 
Title and Disclose Record Title, 20 Creighton L.Rev. 455 (1987).  The theory is that 
once the title insurer takes on the responsibility of doing some type of title 
search and disclosing some defects, the company has a duty to one it knows may 
rely on those services to search and dis­close fully and accurately.  See Jay M. Zitter, Annotation, Title Insurer's Negligent Failure to Discover and Disclose 
Defect as Basis for Liability in Tort, 19 A.L.R.5th 786 (1994).

[¶41]   In contrast, other courts have refused 
to impose tort liability on title insurance compa­nies.  See e.g,. Brown's Tie & Lumber Co. v. Chicago Title Co. 
of Idaho, 764 P.2d 423, 427 (Idaho 1988); Horn v. Lawyers Title Ins. Corp., 557 P.2d 206, 208 (N.M. 
1976); Stewart Title Guaranty Co. v. Cheatham, 764 S.W.2d 315, 319 (Tex.App. 1988); Greenberg v. Stewart 
Title Guaranty Co., 492 N.W.2d 147, 152 (Wis. 1992).  These courts reason 
that because a title insurer does not purport to act as anything other than an 
insurance company, no tort liability exists unless the insurer has voluntarily 
assumed a duty of searching title for the insured's benefit in addition to the 
contract to insure title.  They further conclude that the issuance of a 
preliminary report or title commitment is not an independent assumption of a 
duty to search and disclose reasonably discoverable defects.  We find this 
reasoning persua­sive especially in light of our own state statutes on the 
subject of title insurance.  

[¶42]   Wyo. Stat. Ann. § 26-23-303(a)(xvii) 
(LexisNexis 2001) defines a "commitment" as synonymous with the term 
"report."  If 
issued prior to the issuance of a policy, the commit­ment "constitutes a 
statement of the terms and conditions upon which the insurer is willing to issue 
its policy but is not a title policy.  Neither a title policy nor a report issued 
prior to the issuance of a title insurance policy is an abstract of title."  Some courts have 
recognized a title insurer's tort liability on the basis that the issuance of a 
preliminary commitment occurs weeks prior to the actual issuance of the 
insurance policy.  
In doing so, they have equated the commitment to an abstract of title and 
thus the title insurance company's duty of care to that of an abstractor.  See e.g., First American Title 
Ins. Co., Inc. v. First Title Serv. Co. of the Florida Keys, Inc., 457 So. 2d 467, 472-74 (Fla. 1984); Heyd, 354 N.W.2d  at 158.  Wyoming statute clearly prevents this court 
from making that analogy.  We cannot premise a title insurer's tort 
liability on the mere fact of issuance of a title insurance commitment.7

[¶43]   Moreover, we think the better analysis 
in determining whether to establish a title insurer's tort duty for reasonable 
search and disclosure recognizes that the relationship between the insured and 
the title insurance company is essentially contractual.  Accordingly, we 
hereby adopt the reasoning of the New Jersey Supreme Court in Walker Rogge, Inc. v. Chelsea Title & Guaranty Co., 
562 A.2d 208, 220 (N.J. 1989):

Although we recognize that an insured expects that a title 
company will conduct a reasonable title examination, the rela­tionship 
between the company and the insured is essentially contractual.  The end result of 
the relationship between the title company and the insured is the issuance of 
the policy.  To 
this extent, the relationship differs from other relationships con­ceivably 
sounding in both tort and contract, such as the relation­ship between 
physician and patient . . . . By contrast, the title company is providing not 
services, but a policy of insurance.  That policy appropriately limits the rights 
and duties of the par­ties.  

From 
this perspective, the insured expects that in consid­eration for payment of 
the premium, it will receive a policy of insurance.  The insurer's 
expectation is that in exchange for that premium it will insure against certain 
risks subject to the terms of the policy.  If the title company fails to conduct a 
reasonable title examination or, having conducted such an examination, fails to 
disclose the results to the insured, then it runs the risk of liability under 
the policy.  In 
many, if not most, cases conduct that would constitute the failure to make a 
reasonable title search would also result in a breach of the terms of the 
policy.

[¶44]   This analysis 
is supported by Wyo. Stat. Ann. § 26-23-303(a)(xxi) which defines a title 
insurance policy as: 

[A] 
contract wherein, subject to the stated terms and conditions, a title insurer 
insures, guarantees or indemnifies owners of real or personal property or the 
holders of liens and encumbrances thereon or others interested therein against 
loss or damage suf­fered by reason of:

(A)  Defects in, adverse claims, liens or 
encumbrances in the title to the stated property;

(B)  Unmarketability of the title to the stated 
property;

(C)  Guaranteeing, warranting or otherwise 
insuring by a title insurance company the correctness of searches relating to 
the title to property;

(D)  Defects in the authorization, execution or 
delivery of an encumbrance upon such property;

(E)  The insuring by a title insurance company 
the valid­ity and enforceability of evidences of indebtedness secured by an 
encumbrance upon the title or interest in such prop­erty;

(F)  The invalidity, unenforceability or loss of 
priority of an insured mortgage resulting from a change in rate of inter­est 
or principal balance, or both, which change is in accor­dance with the 
provisions of the insured mortgage. 

[¶45]   Clearly, according to the plain 
language of Wyoming statute, the duty owed to an insured that arises through the 
issuance of a title insurance policy is contractual and subject to the policy's 
stated terms and conditions.  Subsection (C) demonstrates that a title 
insur­ance policy may guarantee by a title 
insurance company the correctness of searches relating to the property, however, 
as in general, this particular guarantee is subject to the terms and conditions 
of the policy.  
In Snyder v. Lovercheck, we declined to 
recognize the tort of negli­gent misrepresentation against a seller arising 
from a contract between sellers and purchasers of real estate.  We cited with 
approval Ford Motor Credit Co. v. Suburban Ford, 699 P.2d 992, 998 (Kan. 1985) cert. denied, 474 U.S. 995, 106 S. Ct. 409 (1985), for the proposition that, "a contract action 
cannot become a tort action by simply saying so . . . when parties' 
dif­ficulties arise directly from a contractual relationship, the resulting 
litigation concerning those difficulties is one in contract no matter what words 
the plaintiff may wish to use in describing it." Snyder 
v. Lovercheck, 992 P.2d 1079, 1088 (Wyo. 1999).  

[¶46]   Finally, some courts have recognized a 
title insurer's duty in tort to undertake a reason­able search and 
disclosure for the benefit of the insured.  These cases are premised in part upon state 
underwriting standards statutes which provide generally that no title insurance 
policy may be written unless and until the title insurance company has caused to 
be con­ducted a reasonable examination of the 
title.  Ruiz v. Garcia, 850 P.2d 972, 975 (N.M. 1993); Cottonwood Enterprises v. McAlpin, 810 P.2d 812, 815 (N.M. 
1991).  
However, Wyoming's underwriting standard statute § 26-23-308(a) 
(LexisNexis 2001) merely provides that "[n]o title insurance policy as to 
property in this state shall be written unless it is based upon adequate evidence of the 
current condition of title certified in writing as of the date of the policy . . 
. ." (Emphasis added.)  Even were we somehow to find that this 
statutory lan­guage imposed a duty on insurers to reasonably search the 
public record and disclose their findings, Wyoming Statute § 26-23-334(b) 
(LexisNexis 2001) precludes us from creating a private cause of action on this 
basis when it expressly states, "[t]his article is enforceable only by the 
commissioner and shall not create any private cause of action or other private 
legal recourse."  

[¶47]   In conclusion, should the Wyoming 
Legislature choose to recognize a public policy behind requiring title insurance 
companies to conduct title searches with reasonable care and disclose those 
results to their insured, they may create that duty by statute.  However, at this 
time, for the foregoing reasons, we decline to do so by judicial enactment. 

[¶48]   The Hulses next contend that First 
American committed fraud when its employee Marie Jackson deliberately removed 
the Neiman restricted easement from the title commit­ment and subsequently 
issued title policy.  
They further contend they were damaged when they relied on this 
information or, more accurately, lack of information.  This contention 
amounts to a claim of fraudulent nondisclosure and fraudulent concealment.  Sundown, Inc. v. Pearson Real Estate Co., Inc., 8 P.3d 324, 331 (Wyo. 2000); Richey v. Patrick, 904 P.2d 798, 801 (Wyo. 1995) (citing Restatement (Second) 
Torts § 551, 550 (1977)).  We recently said in Sundown, "[b]efore 
nondisclosure or fraudulent concealment can be considered, [the plaintiff] must 
show that [the defendant] had a duty to disclose the information."  Id. 8 P.3d  at 331 (citing Burman v. Richmond Homes Ltd. 821 P.2d 913, 918 (Colo.App. 1991)).  As we have previously discussed within this 
opinion, First American owed no duty to disclose the restricted easement to its 
insureds, the Hulses, thus they committed no fraud by failing to do so.  Further, we note as 
a purely factual matter because the contract between the parties is one of 
indemnity, by choosing not to list the restricted easement as an exception to 
the pol­icy, First American increased its own risk of coverage under the 
contract in insuring against a lack of access to and from the land.  This action can 
hardly be deemed to have harmed the Hulses. 

[¶49]   The Hulses next contend that First 
American acted in bad faith by denying coverage under its policy for "lack of a 
right of access to and from the land" without a reasonable basis for doing 
so.  This court 
adopted the tort of bad faith in regard to denial of claims by insur­ance 
companies in McCullough v. Golden Rule Ins. Co., 789 P.2d 855 (Wyo. 
1990).  There 
we said the appropriate test to determine bad faith is the objective standard 
that the validity of the denied claim was not "fairly debatable."  Id. at 860.  We explained that the "fairly debatable 
standard" is premised upon the logic that if a realistic question of liability 
does exist, the insurance carrier is entitled to reasonably pursue that debate 
without exposure to a claim of violation of its duty of good faith and fair 
dealing.  Id.  Following McCullough, 
we have reiterated our support for the "fairly debatable" standard, 
continuing to hold that "[t]he tort of bad faith can be alleged only if the 
facts pleaded would, on the basis of an objective standard, show the absence of 
a reasonable basis for denying the claim, i.e., 
would a reason­able insurer under the circumstances have denied or delayed 
payment of the claim under the facts and circumstances." Id. (citing Anderson v. 
Continental Ins. Co., 271 N.W.2d 368, 376-77 
(Wis. 1978)); Kirkwood v. Cuna Mutual Ins. Society, 
937 P.2d 206, 211 (Wyo. 
1997); Darlow v. Farmer's Ins. Exch., 822 P.2d 820, 823 (Wyo. 
1991). 

[¶50]   Under this standard, the district court 
was correct in granting summary judgment to the defendants First American.  Even if viewing the 
facts in the light most favorable to the Hulses, we cannot but conclude that any 
reasonable insurer would have denied or delayed payment under the facts and 
circumstances before us.  Title Policy No. 18-03038-0 issued by 
defendants First American insured against loss or damage by reason of a "lack of 
a right of access to and from the land."  However, at no point in the Hulses' 
possession of the Tumbling T did they ever lack a right of access to and from 
the land.  As 
previously dis­cussed, the Russell Private Road was never effectively 
vacated.  The 
Hulses maintained, and continue to maintain, legally enforceable unrestricted 
access across the Neiman property by way of this road.  While its physical 
condition may not be satisfactory to them, the policy does not insure the 
physical condition of the roadway, but rather whether it provides a legal right 
of access.  
Only defects shown in the public record relating to a legal right of 
access are covered under the policy.8  See Hocking v. Title Ins. & Trust Co., 234 P.2d 625 (Ca. 1951); see generally, Charles 
Plovanich, Annotation, Defect in, or Condition of, 
Adjacent Land or Way as Within Coverage of Title Insurance Policy, 8 
A.L.R.4th 1246 § 4[c] (1981).  In summary, 
having determined there is no genuine issue as to any material fact on the 
plain­tiffs' claims against defendants First American, we affirm the 
district court's grant of summary judgment in their favor.

Claims against Defendant BHJ, 
Inc. 

[¶51]   The Hulses appeal the district court's 
grant of summary judgment for the defendant BHJ, Inc., a licensed real estate 
brokerage, for the acts of its agent Amory Hubbard on claims they label 
negligent misrepresentation and fraud.  We take this opportunity to clarify the 
duties owed by licensed real estate brokers, agents, and salespersons and the 
causes of action that may arise as a result of an alleged breach of those 
duties.  

[¶52]   The Hulses assert a claim of negligent 
misrepresentation against defendant BHJ, Inc. citing Restatement (Second) Torts § 552.  In Richey v. Patrick, a case involving claims by 
purchasers of real property against lay sellers, we discussed the tort of 
negligent misrepre­sentation as found in the Restatement and stated that in order for there to have 
been a negli­gent misrepresentation, the plaintiff must show that

[o]ne 
who, in the course of his business, profession or employ­ment, or in any 
other transaction in which he has a pecuniary interest, supplies false 
information for the guidance of others in their business transactions, is 
subject to liability for pecuniary loss caused to them by their justifiable 
reliance upon the infor­mation, if he fails to exercise reasonable care or 
competence in obtaining or communicating the information.

Richey,  904 P.2d 798, 802 (Wyo. 1995).

[¶53]   In Richey, 
we found that the sellers had not "supplied false information," as required by 
the claim, because the sellers had not supplied any information to the purchasers.  We said, "[a] 
nondisclosure of information cannot support a claim of misrepresentation; since 
nothing has been represented, an essential element of the claim is 
missing."  Id. at 802 (citing Burman v. 
Richmond Homes, Ltd., 821 P.2d 913, 919 (Colo.App. 1991)).  We went on to hold that the crux of the 
purchasers' complaint was that the sellers should have informed them of a 
material fact, they owed a duty to do so, and it was this nondisclosure that 
caused the plaintiff's damage.  In Richey, we 
then clarified that the appropriate claim was one for negligent nondisclosure as 
found within Restatement (Second) Torts § 551.  However, we 
declined to apply the Restatement section to the 
plaintiffs' claim because we reasoned that the "as is" clause contained within 
the purchase contract signed by the sellers and purchasers placed the risk of 
discovery of adverse material facts upon purchasers of real estate.  Thus, we recognized 
the relationship between the parties was essentially contractual and held that 
when a contract places the burden on the purchaser to discover defects, they are 
barred from seeking relief for negligent nondisclosure.

[¶54]   Likewise, in our recent case of Snyder v. Lovercheck, we addressed as an issue of first 
impression whether a purchaser of realty could even bring a claim of negligent 
misrepresen­tation, a tort action, against a seller when the relationship 
between the parties arises in contract.  Again, we held that the contractual 
relationship is controlling.  When purchasers of realty sign contracts with 
disclaimers and merger clauses stating that the purchaser is not relying on the 
representations of the sellers or their agents as to the condition of the 
property, the contract has allocated the risks of loss resulting from the 
purchaser's reliance on the seller's representations to the purchaser.  In reasoning to our 
ultimate conclusion, this court had an extended discussion of the distinction 
between duties arising by tort and those arising by contract.  We said: 

Tort 
law proceeds from a long historical evolution of externally imposed duties and 
liabilities.  
Contract law proceeds from an even longer historical evolution of 
bargained-for duties and liabilities.  The careless and unnecessary blanket 
confusion of tort and contract would undermine the carefully evolved utility of 
both.

In 
tort, the legislatures and the courts have set the parameters of social policy 
and imposed them on individual members of society without their consent.  The social policy 
in the field of contract has been left to the parties themselves to determine, 
with judicial and legislative intervention tolerated only in the most extreme 
cases.  Where 
there has been interven­tion, it has been by the application of well 
established contract doctrines, most of which focus on threats to the integrity 
of the bargaining process itself such as fraud or extreme imbalance in 
bargaining power.

Snyder v. Lovercheck, 992 P.2d  at 1087.

[¶55]   As illustrated by our holdings in Richey and Snyder, this 
court continues to value the freedom to contract between sellers and purchasers 
of realty.  We 
recognize that the parties to the contract may allocate the risks of loss as 
they so choose.  
Having done so, absent proof of fraud, we generally allow the unambiguous 
language found in the parties' contract to con­trol the scope of subsequent 
litigation.  We 
have been exceedingly reluctant to introduce tort principles into claims that 
are essentially contract actions.

[¶56]   However, this court's jurisprudence 
reflects that the inverse rule is likewise valid.  Contract principles that govern the parties 
to a contract are not controlling on claims against nonparty professionals whose 
duties arise in tort.  
Our precedent reveals a recognition that tort duties and liabilities 
imposed by the legislatures and courts are supported by underlying social 
policies which require the imposition of obligations on a defendant to act 
reasonably for the protection of a plaintiff.  By imposing tort duties, courts and 
legislatures have exter­nally allocated the risks arising from certain 
relationships for the protection of the public.  Having done so, individual parties are 
limited in shifting those burdens from the obligor to the obligee by private 
action.  

[¶57]   At this point in time, there can be no 
doubt that licensed professional real estate agents and brokers are a class of 
persons on whom the law has imposed affirmative tort duties.  Two decades ago 
this court stated in Hagar v. Mobley:

Real 
estate brokers and salesmen are licensed by the State of Wyoming and required to 
meet high standards of honesty, integrity, trustworthiness and competency.  Theirs is a 
regulated profession.  
Failure to satisfy those standards is ground for suspension or revocation 
of a real estate broker's or salesperson's license.  An act licensing 
real estate agents must be construed in the light of an obvious purpose of 
protecting the public in the handling of important and valuable transactions 
relating to real property.  As a result, such an agent does not stand in the same shoes 
of a lay vendor.  Such realtors owe the vendee the same duties 
of integrity owed the public at large.  They must be honest, trustworthy and 
competent.

Hagar 
v. Mobley, 638 P.2d 127, 136 (Wyo. 
1981) (emphasis added and citation omitted).  In Hagar, we 
cited with approval the reasoning of the Utah Supreme Court reversing the 
dis­missal of a claim against a realtor: 

In 
this state, it is apparent that the rule of caveat emptor does not apply to 
those dealing with a licensed real estate agent.  Though not occupying a fiduciary relationship 
with prospective purchasers, a real estate agent hired by the vendor is expected 
to be honest, ethical, and competent and is answerable at law for breaches of 
his or her statutory duty to the public.

Hagar, 638 P.2d  at 137 (quoting Dugan v. 
Jones, 615 P.2d 1239, 1248 (Utah 1980)).

[¶58]   Furthermore, we cited with approval the 
Montana Supreme Court's then recent hold­ing that real estate brokers have, 
like other professionals, certain standards of care which must be 
satisfied.  We 
said that the Montana court observed that the failure to maintain those 
standards of skill, competency, and integrity exposes realtors to, in effect 
malpractice actions.  
Hagar, 638 P.2d  at 137 (citing McCarty v. Lincoln Green, Inc. 620 P.2d 1221, 1225 (Mt. 1980)).  This court went on to state that we may exact 
a high standard of care from realtors and held that the standard of care for 
realtors may be adopted by the court from a legislative enactment.  Id. (citing Distad v. 
Cubin, 633 P.2d 167 (Wyo. 
1981)).  We 
reiter­ated:

Realtors, just like doctors, lawyers, engineering 
consult­ants, and builders, hold themselves out as professionals; it is 
their job to know their profession.  People rely on and trust them.  Failure to comply 
with either the accepted standards in the field or the standards society is 
willing to recognize as acceptable, is actionable.

Hagar, 638 P.2d  at 138.  As to the question of damages, we held "[t]he 
liability of real estate agents, brokers and salespersons, as in all actions 
predicated upon the fail­ure to perform some duty, sounds in tort.  In tort cases 
damages are generally awarded in order to compensate claimants for loss.  The measure of 
damages is the amount which will compensate for all the detriment proximately 
caused by the breach of duty."  Hagar, at 139. 

[¶59]   Subsequent to our holding in Hagar, parties have apparently seized on the language 
within the opinion stating the duty of care as "the 
broker is liable because of material repre­sentations of the principal if he 
repeats them and knows, or reasonably should know, of their falsity.  Liability attaches 
in this context on grounds of negligence," id. 
at 137,  and 
have asserted claims labeled "negligent misrepresentation" against both lay 
sellers and real estate brokers and agents.  "Negligent misrepresentation" and "negligent 
nondisclosure" are generic tort actions found within the Restatement (Second) Torts §§ 552 and 551 
respec­tively.  
These torts have specific elements and, as previously discussed, this 
court has addressed in various opinions whether to adopt and apply them to 
claims brought by plain­tiffs against sellers of realty and real estate 
brokers and agents.  
See Richey v. Patrick, 904 P.2d 798 (Wyo. 1995); 
Snyder v. Lovercheck, 992 P.2d 1079 (Wyo. 1999); 
Sundown, Inc. v. Pearson Real Estate Co., Inc., 8 P.3d 324 (Wyo. 
2000).  We have 
also addressed the effect of various exculpatory clauses on the above causes of 
action.  At 
this juncture, we reaffirm all prior holdings and precedent as applied to lay 
vendors/sellers of real property and their agents or subagents, who are not licensed real 
estate professionals.  

[¶60]   However, notwithstanding any subsequent 
confusion in formulating, titling, or decid­ing tort claims against licensed 
real estate professionals premised upon their duties imposed by statute, it is 
abundantly clear that Hagar contemplated that the 
claim was one of profes­sional negligence.  This is the holding that we expressly 
reaffirm by this decision.  It is further supported by legislative 
enactments in 1997 by which the Wyoming Legislature essentially codified the 
court's holding in Hagar and went further to expand 
and clarify the duty of care owed by real estate professionals to parties when 
acting as seller's, buyer's or intermediary agents.  See Wyo. Stat. § 33-28-303 (LexisNexis 2001) Seller's agent engaged by seller; Wyo. Stat. § 
33-28-304 (LexisNexis 2001) Agent engaged by buyer; 
Wyo. Stat. Ann. § 33-28-305 (LexisNexis 2001) Intermediary.  The Wyoming Legislature in 2000 adopted Wyo. 
Stat. § 33-28-124 Act, error or omission in the 
rendering of real estate ser­vices, which provides:  "A cause of action 
arising from an act, error or omission in the rendering of services provided by 
a licensee under this act shall be brought within the time limits provided under 
W.S. 1-3-107."  
Wyo. Stat. Ann. § 1-3-107 is the statute of limitations for claims of 
professional negligence.  It is applicable to claims arising after the 
effective date of Wyo. Stat. Ann. § 33-28-124.9

[¶61]   As we held in Hagar, the court may adopt from legislative enactment a 
standard of care for realtors.  Id., 638 P.2d  at 137.  Wyo. Stat. § 33-28-303(c) provides:

A 
broker acting as a seller's agent owes no duty or obli­gation to the buyer, 
except that a broker shall disclose to any prospective buyer all adverse 
material facts actually known by the broker.  The adverse material facts may include 
adverse material facts pertaining to the title and the physical condition of the 
property, any material defects in the property and any envi­ronmental 
hazards affecting the property which are required by law to be disclosed.  The broker acting 
as a seller's agent shall not perpetuate a material misrepresentation of the 
seller which the broker knows or should know is false."10  

In Hagar 
we said that the facts necessary to be disclosed are those that are "pivotal 
to the transaction from the buyer's perspective." Id. at 138 (quoting Tennant v. 
Lawton, 615 P.2d 1305, 1309-1310 (Wash.App. 1980)).

[¶62]   Having hereby outlined what law is 
applicable to the liability of real estate brokers and salespersons, we note 
that the claims asserted by the plaintiffs, while labeled "negligent 
misrepresentation," essentially assert a breach of the duty of care owed by real 
estate profes­sionals to non-client buyers.  However, as a reviewing court, we are not 
fact finders in the first instance.  The district court's grant of summary 
judgment did not address the issue of whether BHJ, Inc.'s agent, Hubbard, 
exercised such care, skill, and diligence as others who are engaged in the 
profession would ordinarily exercise under similar circumstances in 
ful­filling the duties imposed upon him by statute.  We, therefore, 
vacate the district court's grant of summary judgment to BHJ, Inc. on the issue 
of "negligent misrepresentation" and remand for a determination under the 
applicable standard consistent with the law we have herein set out. 

[¶63]   The Hulses also appeal the district 
court's decision on their claims of fraud against BHJ, Inc.  The district court 
held that the disclaimer section of the purchase sales agreement signed by the 
Hulses, which states they are not relying on any representations by the seller 
or the seller's agent about the property, acts as a bar to their claim.  We recently held in 
Snyder v. Lovercheck, that such a disclaimer bars a 
claim for negligent misrepresentation; however, we held that buyers are not 
precluded, by either merger or disclaimer clauses, from asserting a claim for 
fraudulent misrepresentation if the misrepresentation occurred prior to 
execution of the contract.  Snyder v. 
Lovercheck, 992 P.2d 1079, 1086 (Wyo. 
1999).  The 
district court also premised its grant of summary judgment for defendant BHJ, 
Inc. on "undisputed facts show[ing] that access problems did not result in any 
loss or damage to Plaintiffs."  Review­ing the facts in the light most 
favorable to the plaintiffs, we would not affirm the district court's judgment 
on this ground.  
While the district court may have correctly concluded, as a matter of 
law, that the loss of the plaintiffs' ranch was proximately caused by their own 
fail­ure to make mortgage payments to Moore, these are not the only damages 
alleged by the plaintiffs.  Genuine issues of material fact on the issue 
of damages preclude summary judg­ment for the defendant on that ground.  However, while the 
district court's decision on these issues was incorrect, it is well established 
that a district court judgment may be affirmed on any proper legal grounds 
supported by the record.  Bird v. Rozier, 
948 P.2d 888, 892 (Wyo. 
1997).  

[¶64]   This court recently held in Richardson v. Hardin, to succeed on a claim of 
fraudulent misrepresentation, three elements must be established:  First, the buyer 
must prove by clear and convincing evidence that the seller misrepresented a 
material fact; second, the buyer must establish that he relied upon the 
misrepresentations in entering into the contract and that such reliance was 
reasonable; and third, the buyer must demonstrate that he suffered injury as a 
result of his reliance upon the misrepresentation.  Richardson v. Hardin, 5 P.3d 793, 797 (Wyo. 
2000) (citing Schepps v. Howe, 665 P.2d 504, 508 (Wyo. 
1983)).  With 
regard to the reasonable reliance element, we recognized that the false 
representation must occur prior to the execution of the contract because, 
subsequent to the execution, the parties have the ability and obligation, 
pursuant to negotiated contract terms and the law, to allocate responsibility to 
inspect and investigate the property and its condition.  Id.  Here, as in Richardson, our review of the record discloses that the 
representations or concealment at issue occurred after the buy/sell contract was 
executed and the alleged defects could have been discovered through diligent 
enforcement of the buyer's contract right, or rights available by law, to 
inspect and investigate.  We addressed a similar situation in Schepps, where we held that any misrepre­sentations 
made after the buy/sell contract was executed could not be the basis of 
actionable fraud because, as a matter of law, such misrepresentation could not 
serve as an inducement to the buyers to enter into the contract.  Therefore, on the 
basis of this alternate ground, we will uphold the district court's grant of 
summary judgment to the defendant BHJ, Inc. on the plaintiffs' claims of fraud. 

CONCLUSION

[¶65]   We reverse the district court's holding 
in appeal number 99-265 and hold that official action by a board of county 
commissioners which established a private road pursuant to Wyo. Stat. § 24-9-101 
et seq. is necessary to vacate that same private 
road.  In 
appeal num­ber 99-256, we affirm the district court's grant of summary 
judgment as to defendants First American on plaintiffs' claims of breach of 
contract, negligence, negligent misrepresenta­tion, bad faith, and 
fraud.  We also 
affirm the district court's grant of summary judgment to the defendant BHJ, Inc. 
on the plaintiffs' claims of fraud.  However, we vacate and remand the district 
court's grant of summary judgment on the ground of negligent misrepresentation 
for further proceedings consistent with this opinion.  

FOOTNOTES

1This document 
was not filed for record at the Crook County Clerk's office until February 10, 
1997.  

2This court 
makes no judgment as to these statements except to note that it would appear to 
be inconsistent for the attorney to draw up legal documents the very purpose of 
which, it appears, is to ensure a vacation of the Russell Private Road, and then 
later opine that the road has never been vacated. 

3This promise of 
financing to the Hulses from First Interstate Bank was the subject of a previous 
appeal before this court.  See Hulse v. First Interstate Bank of Commerce-Gillette, 994 P.2d 957 (Wyo. 
2000).

4The Wyoming 
Legislature extensively rewrote the private road act in 2000; however, the 
revised statutes do not provide for the manner in which a private road is 
vacated.  See 2000 Wyo. Sess. Laws ch. 88, § 1. 

5Wyo. Stat. Ann. 
§ 16-3-114 (LexisNexis 2001).

6Because the 
private road statute is silent as to the method by which such roads are vacated, 
should the Wyoming Legislature prefer another construction their will may be 
expressed by statutory amendment. 

7This is not to 
imply that Wyoming's Title Insurance Act fails to contemplate that title 
insurers will act as abstractors of title. The Act is replete with provisions 
relating to insurers searching records and abstracting title.  However Wyoming 
statutes expressly indicate that an insurer is not acting as an abstractor when 
issuing a title "commitment."

8Thus, had we 
determined that the Neiman restricted easement provided the only access to the 
Tumbling T, because a restriction on use is a defect, and as this defect was 
well established in the public record, First American may have been liable under 
its policy.

9When 
professional negligence is asserted, we generally require the plaintiff to 
present expert witness testimony which reveals the standard of care applicable 
to the profession and the defendant's compliance with or breach of that 
standard.  See e.g., Garaman Inc. v. 
Williams, 912 P.2d 1121, 1123 (Wyo. 
1996) (architect) Moore v. Lubnau, 855 P.2d 1245, 1248 (Wyo. 
1993) (attorneys); Kemper Architects, P.C. v. McFall, 
Konkel & Kimball Consulting Engineers, Inc., 843 P.2d 1178, 1185 (Wyo. 
1992) (engineers); Roybal v. Bell, 778 P.2d 108, 111 (Wyo. 
1989) (physicians).  
Because the aforementioned statutes establish the standard of care for 
real estate professionals with clarity, expert testimony as to that standard and 
its breach are unnecessary.

10See generally, Diane M. Allen, 
Annotation, Real-Estate Broker's Liability to Purchaser 
for Misrepresentation or Nondisclosure of Physical Defects in Property Sold, 
46 A.L.R.4th 546 (1986).