This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2014).

STATE OF MINNESOTA

IN COURT OF APPEALS

A14-0966

The Bank of New York Mellon, for the certificateholders of CWALT, Inc.

Alternative Loan Trust 2005-6CB,

Mortgage Pass-through Certificates, Series 2005-CB,

Appellant,

vs.

Wendy S. Jacobson, et al.,

Defendants,

Stewart Title Guaranty Company,

Respondent.

Filed April 20, 2015

Affirmed

Hooten, Judge

Mille Lacs County District Court

File No. 48-CV-11-1880

Jared M. Goerlitz, PFB Law, P.A., St. Paul, Minnesota (for appellant)

Michelle E. Weinberg, Faegre Baker Daniels LLP, Minneapolis, Minnesota (for 

respondent)

Considered and decided by Worke, Presiding Judge; Peterson, Judge; and Hooten, 

Judge. 
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U N P U B L I S H E D O P I N I O N

HOOTEN, Judge

Appellant bank brought a negligent misrepresentation claim against its title insurer 

after the bank discovered that the property that the insurer covered did not contain a 

house, and the insurer did not discover or alert the bank to this fact. Because the parties 

were sophisticated business entities with no special relationship that negotiated a 

commercial transaction at arm’s length, the insurer did not owe the bank a legally 

recognized duty to discover or disclose that the property lacked a house. We affirm the 

district court’s grant of summary judgment for the title insurer. 

FACTS

Lloyd and Ione Jacobson (the parents) conveyed 15 of the 40 acres they owned in 

Mille Lacs County to their son and daughter-in-law, David and Wendy Jacobson (the 

Jacobsons). The Jacobsons then constructed a home on what they believed to be their 

land. The home was actually built entirely on the parents’ property. The Jacobsons 

mortgaged their property to Voyager Bank, and respondent Stewart Title issued Voyager 

a title-insurance policy at closing. The closing instructions stated that, if Voyager 

requested a plat drawing of the lot, Stewart would review the drawing and insure

Voyager against any “[u]nfiled mechanic’s or materialmen’s liens.” 

Several years later, appellant Bank of New York Mellon acquired Voyager’s 

mortgage interest in the property shortly before the Jacobsons defaulted. Mellon initiated

a foreclosure action and discovered that the property contained no house. Mellon filed 

two title claims with Stewart, but Stewart denied each claim because the absence of a
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house did not affect the marketability of the property’s title. Mellon amended its 

complaint to bring breach-of-contract claims against Stewart, arguing that Stewart failed

to obtain a survey and review the plat drawing prior to closing. The district court granted 

Stewart summary judgment because Stewart’s obligation to review the drawing ripened 

only if Mellon’s predecessor in interest requested review, and the record lacked any 

evidence that Voyager made such a request. Mellon did not appeal this ruling.

Before the district court granted summary judgment on the contract claims, Mellon 

amended the complaint to add a negligent-misrepresentation tort. The district court did 

not rule on this claim when it granted Stewart summary judgment on the contract claims. 

In the complaint, Mellon alleged that Stewart falsely represented that it would obtain and 

review the plat drawing prior to closing but did not do so. It further contended that 

Stewart’s willingness to insure against title defects misled Mellon to infer that Stewart 

obtained and reviewed the plat drawing prior to closing and confirmed that the value of 

the collateral was as Mellon had appraised it.

Stewart moved for summary judgment, arguing that Mellon’s tort claim was 

indistinguishable from its breach-of-contract claim, and that there was no evidence that 

Stewart made a false statement or that Mellon justifiably relied on that statement. Mellon

replied that the tort claim had been “substantially briefed” in its prior summary judgment 

motion on the breach-of-contract claim. 

The district court heard oral argument on the matter and asked the parties whether 

they wanted further briefing on the issue of whether Stewart had a duty relative to the tort 

allegations set forth in the amended complaint. Convinced that its position had already 
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been laid out, Stewart requested that the district court “take its motion under advisement 

as submitted” and argued that whether Stewart had a duty of care had been sufficiently 

briefed because that element “is a question of law.” Mellon did not object or offer 

supplemental briefing.

The district court granted Stewart’s motion for summary judgment. It determined

that any duty Stewart owed to Mellon arose out of a contractual relationship, and Stewart 

owed no duty under existing Minnesota law relative to Mellon’s negligentmisrepresentation tort. The district court also granted Stewart summary judgment on the

remaining tort elements. Mellon appeals. 

D E C I S I O N

We review the district court’s decision to grant summary judgment de novo. 

Minn. Laborers Health & Welfare Fund v. Granite Re, Inc., 844 N.W.2d 509, 513 (Minn. 

2014). We analyze the record to determine if there are any factual disputes, and if there 

are not, we determine whether the district court properly applied the law. Dahlin v. 

Kroening, 796 N.W.2d 503, 504 (Minn. 2011). If there are no genuine disputes about

any material facts and one party is entitled to judgment as a matter of law, summary 

judgment must be granted. Minn. R. Civ. P. 56.03.

To prevail on a negligent-misrepresentation claim, a plaintiff must demonstrate

that (1) the defendant owed the plaintiff a duty of care, but (2) supplied the plaintiff with

false information, which (3) the plaintiff justifiably relied on, and (4) the defendant failed 

to exercise reasonable care in communicating the information. Williams v. Smith, 820 

N.W.2d 807, 815 (Minn. 2012).
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The district court granted summary judgment after determining that Mellon could 

not demonstrate that Stewart owed it a duty of care because Stewart’s only obligations 

concerning the plat drawing were contractual. The district court is correct. An alleged 

breach of contract may not support a tort claim when the alleged “breach of duty is 

indistinguishable from the breach of contract.” Hanks v. Hubbard Broad., Inc., 493 

N.W.2d 302, 308 (Minn. App. 1992), review denied (Minn. Feb. 12, 1993) (quotation 

omitted). The test for whether the tort action is independent of the contract claim is

“whether a relationship would exist which would give rise to the legal duty without 

enforcement of the contract promise itself.” Id.

Mellon claims that Stewart owed it a duty to obtain and review the plat drawing 

and that Stewart negligently misrepresented the value of the underlying collateral by 

issuing a title policy without discovering or disclosing that no house was located on the 

property. But this purported duty arose from the title-insurance policy, and any breach of 

this duty was “indistinguishable” from the breach of contract. See id. Mellon can point 

to no relationship giving rise to a legal duty without enforcement of the contract. Two 

sophisticated business entities negotiating a commercial transaction at arm’s length do 

not owe each other a duty not to negligently misrepresent. See Smith v. Woodwind 

Homes, Inc., 605 N.W.2d 418, 425 (Minn. App. 2000).

1

 

1 Commercial parties may not fraudulently misrepresent facts or generally act in bad 

faith. See Florenzano v. Olson, 387 N.W.2d 168, 173–74 (Minn. 1986).
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And, there is no evidence in the record of any relationship between the parties that 

could support Mellon’s negligent-misrepresentation allegations in its amended complaint. 

At oral argument before this court, Mellon’s counsel conceded that the parties had no 

special legal relationship, they were not fiduciaries, and their only professional 

relationship was that of contracting parties. Without one of these relationships, Mellon 

cannot demonstrate that Stewart owed it a duty of care necessary to support its negligent 

misrepresentation claim. See Williams, 820 N.W.2d at 817–18 (analyzing relationships 

necessary for sophisticated business entities negotiating a commercial transaction to be 

potentially liable for negligent misrepresentation).

Mellon did not attempt to rebut these legal principles on appeal. Instead, Mellon 

argued that the district court denied it the opportunity to adequately brief the issue of 

whether such duty existed and stated that it would not consider that issue in ruling on 

Stewart’s motion for summary judgment on the tort claim. But this is not an accurate

characterization of the record. Rather than stating it would not consider the issue, the 

district court asked whether the parties wanted further briefing on the duty issue, and if 

not, whether they wanted a ruling on that issue. In response, Stewart asked the district 

court to rule on the issue, pointing out that both parties had previously addressed the issue 

in conjunction with its prior summary judgment motion and that the duty issue involved a 

purely legal matter. Mellon neither objected to Stewart’s request nor offered any 

supplemental briefing. On this record, it was reasonable for the district court to infer 

from Mellon’s silence that Mellon was satisfied that its position had been sufficiently 

briefed.
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We also note that district courts retain the “inherent power” to “dispose summarily 

of litigation when there remains no genuine issue as to any material fact and judgment 

must be ordered for one of the parties as a matter of law.” Del Hayes & Sons, Inc. v. 

Mitchell, 304 Minn. 275, 280, 230 N.W.2d 588, 591–92 (1975). To exercise this power, 

the “same conditions must exist as would justify a summary judgment on motion of a 

party.” See id. at 280, 230 N.W.2d at 592. These conditions existed because the question 

of whether a duty exists in a particular relationship is a question of law, Williams, 820 

N.W.2d at 816, and the district court correctly applied the existing law. Mellon cannot 

demonstrate any prejudice from the district court’s decision to analyze the duty element

because its theory of duty fails as a matter of existing law. See id.

Mellon nevertheless contends that the district court’s order prevented the bank

from establishing facts creating a new duty outside the “four corners of the title 

commitment.” But, at oral argument, counsel for Mellon could not identify any facts it

hoped to discover to support this purely legal argument. And, to the extent that Mellon is 

seeking a new tort action in Minnesota, it is not for us or the district court to decide; that

authority belongs to our supreme court. Glorvigen v. Cirrus Design Corp., 796 N.W.2d 

541, 557 (Minn. App. 2011), aff’d, 816 N.W.2d 572 (Minn. 2012). 

Stewart does not provide information about the value of collateral; it indemnifies 

policy holders against defects in title. Mellon cannot sustain its argument that Stewart’s 

willingness to cover title defects acted as an appraisal of the value of the underlying 

collateral. And even if it could, Mellon’s claim that Stewart legally owed it the duty to 

disclose this appraisal is not recognized under existing Minnesota law as the two parties 
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are sophisticated business entities with no special legal relationship that negotiated a 

commercial transaction at arm’s length. We affirm the district court’s well-reasoned 

decision because Stewart is entitled to judgment as a matter of law. 

Affirmed.