Case Name: Louis FIREISON and Bernadine Fireison, Appellants, v. Luvie M. PEARSON, Appellee
Court: District of Columbia Court of Appeals
Jurisdiction: District of Columbia
Decision Date: 1986-01-29
Citations: 503 A.2d 1271
Docket Number: No. 84-157
Parties: Louis FIREISON and Bernadine Fireison, Appellants, v. Luvie M. PEARSON, Appellee.
Judges: Before MACK, BELSON and ROGERS, Associate Judges.
Reporter: West's Atlantic Reporter, Second Series
Volume: 503
Pages: 1271–1280

Head Matter:
Louis FIREISON and Bernadine Fireison, Appellants, v. Luvie M. PEARSON, Appellee.
No. 84-157.
District of Columbia Court of Appeals.
Argued July 10, 1985.
Decided Jan. 29, 1986.
Michael Alan Olshonsky, Washington, D.C., with whom Mary P. Nyiri, Washington, D.C., was on the brief, for appellant.
Kenneth J. Ingram, Washington, D.C., for appellee.
Before MACK, BELSON and ROGERS, Associate Judges.

Opinion:
MACK, Associate Judge:
In this action by appellants Louis and Bernadine Fireison 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' evidence. We reverse.
I.
In March of 1975, Louis Fireison became aware 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. Fireison 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 trees added value to the lot and in addition provided privacy and a natural barrier between lots 6 and 5. The boundary line of lot 5, 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 an 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 in fact 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, 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. 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. According to Firei-son, the lawyer searched the title only for outstanding liens, and found none. There is no record evidence that she saw the new plat that Abell had recorded, although she did reference a plat book and number in the deed of sale. The deed included no physical description of the lot.
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." This action 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 not dismiss an action unless "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). Nevertheless, 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). "[S]ound 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). This is so because a "judgment rendered on all the evidence is likely to be more sound than one rendered on less than all." National Tire Dealers & Retreaders Association v. G.D.C. Corp., 147 A.2d 869, 871 (D.C.1959).
The trial court based its dismissal on two alternative grounds. It concluded, first, that Fireison 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, Fireison'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 Fireison. By accepting the burden of the title search, the court held, Fireison had also accepted the "risk of failing to do so," i.e., the risk of failing to uncover that he had been defrauded by the owner.
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 Fireison had "freely contracted" to accept the property in whatever size it had been recorded. The court did not accord any significance either to the fact that Fireison understood from Abell that the property had been recorded in 1975 at approximately 5.1 acres, with the boundaries fixed as Abell had represented to him at the time the option contract was executed; or to the owner's failure to notify Fireison of the change in the acreage and boundary lines by sending him, as the option contract had required, copies of any new surveys and plats. The court found instead that "the plaintiffs proceeded to settlement in spite of the defendant's nonperformance, thus waiving the right to receive the survey from the defendant prior to settlement." The trial court did not specifically address the arguments that (1) Fireison could not have been expected to insist upon his contractual right, under paragraph 5 of the option agreement, to receive copies of the new survey and plat, because he had no notice of the existence of these documents; or that (2) the failure to pi'ovide the plat and survey as contractually required is some evidence of fraud. The court impliedly found that the plat book and number listed in the deed were sufficient notice to Fireison that the boundaries and acreage of this property had been changed; that his proceeding to settlement on this deed worked an implied acceptance of the new, restricted, boundaries of the property; and that his prior dealings with Abell merged into the deed, preventing him from now raising any challenges to the sale.
III.
It is a "familiar rule of construction" that where a plat is referred to in a deed, "the effect is the same as if it were copied into the deed." Noonan v. Lee, 2 Black 499, 504, 67 U.S. 499, 504, 17 L.Ed. 278 (1863). In other words, where the deed references a plat, the "particulars appearing upon the plat are to be as much regarded, in ascertaining the true description of the land and the intent of the parties, as if they had been expressly enumerated in the deed." Jefferis v. East Omaha Land Co., 134 U.S. 178, 195, 10 S.Ct. 518, 522, 33 L.Ed. 872 (1890); see Whittington v. Mann, 211 Md. 199, 203, 126 A.2d 617, 619 (1956) (same). Nevertheless, where there is fraud or mistake in the plat reference "by way of description of the premises conveyed," the buyer is not absolutely bound by that reference, but has a remedy "in chancery to reform the deed." Jones v. Johnston, 59 U.S. (18 How.) 150, 153, 15 L.Ed. 320 (1856); see also Gross v. Stone, 173 Md. 653, 664, 197 A. 137, 142 (1938) (deed whose execution was induced by fraud may be impeached). If Fireison is able to demonstrate fraud by clear and convincing evidence, he is entitled to reformation of the deed, specific performance to the extent that the property he bargained for (but did not receive) has not been sold, and an abatement of the purchase price for the remainder, notwithstanding the fact that the deed references the plat with the smaller acreage. See Boring v. Jungers, 222 Md. 458, 467, 160 A.2d 780, 786 (1960) (affirming specific performance of contract for sale of property based on what buyers had "bargained for and [thought] they were getting," where owner had misrepresented scope of frontage; specific performance is affirmed even though buyers' agent had possession of plat showing true boundary line, and agent's knowledge is imputed to buyer); Reigart v. Fisher, 149 Md. 336, 346, 131 A. 568, 572 (1925) (affirming specific performance and abatement of purchase price as remedies where owner's agent had materially misrepresented acreage).
The Maryland courts have repeatedly affirmed the principle that in contracts of this type,
[W]here statements of fact which are essentially connected with the subject of the transaction . "and especially where they are concerning matters which, from their nature or situation, may be assumed to be within the knowledge or under the power of the party making the representation, the party to whom it is made has a right to rely on them, he is justified in relying on them, and in the absence of any knowledge of his own, or of any facts which should arouse suspicion and cast doubt upon the truth of the statements, he is not bound to make inquiries and examination for himself."
Glendale Corp. v. Crawford, 207 Md. 148, 158, 114 A.2d 33, 36 (1955) (citation omitted); see Ryan v. Brady, 34 Md.App. 41, 55, 366 A.2d 745, 753 (1976). This is true even though "the truth could have been ascertained by an examination of the public records." Glendale Corp., supra. In Piper v. Jenkins, 207 Md. 308, 314, 113 A.2d 919, 922 (1955), the court noted that where "the vendor undertakes to point out the boundaries to the purchaser, he is under an obligation to point them out correctly; and the purchaser has a right to rely upon such a representation . and he can hold the vendor liable for any fraudulent misrepresentation." The buyer is not required under these circumstances "to make an examination of the land records" to determine the correct acreage, "or to employ a surveyor to make a plat of the land." Id. The vendor "cannot avoid the[] consequences [of his false statements] merely because the vendee might have ascertained their falsity by a survey of the land or by reference to official plats and records." Lanning v. Sprague, 71 Idaho 138, 143, 227 P.2d 347, 350 (1951), cited with approval in Piper, supra. The buyer's omission to take any of these steps cannot be held against him because such an omission is "a natural consequence of the fraudulent representations. They had precisely the effect designed by the [seller], and he [is] properly held responsible for the resulting damage." Gustafson v. Rustemeyer, 70 Conn. 105, 139, 39 A. 104, 108 (1898), cited with approval in Piper, supra. In sum, where there are purposeful misrepresentations by the seller, the fraud estops the seller from arguing that the deed, referencing the plat, represents the final intention of the parties.
The seller argues that because Fir-eison took upon himself the burden of performing a title search and preparing the deed, he was placed on constructive notice of the new plat that was contained in the land records. It cites Ryan v. Brady, supra, for the proposition that where an agent of the buyer undertakes to make an examination of the land records, he cannot be heard to argue that he was injured by the seller's misrepresentations. 34 Md. App. at 55, 366 A.2d at 753. In Ryan, however, in contrast to this case, the record showed that the buyer's attorney had actually reviewed the recorded plat. Id. at 53, 366 A.2d at 752. The attorney's actual notice could therefore be imputed to the buyer to defeat his claim. In the instant case, however, there is no evidence that Fireison's attorney opened the plat volume, nor is there any evidence that in performing a title investigation — searching the deed records and assessment books for outstanding liens — she would necessarily have had occasion to do so. There is therefore no evidence of actual notice that can be imputed to appellant of the more limited boundaries of the subject property. Moreover, even if it could be argued that an attorney or agent who assumes the burden of a title search is placed on constructive notice of every item of information pertaining to the property that may be found in the lands records, we do not think that such constructive notice may be imputed to the agent's principal. Ryan, in view of the decisions it relies upon and its facts (the attorney there admitted that he had looked at the plat), does not so hold.
More importantly, the claim in Ryan was not fraud, but negligent misrepresentation; there was "no evidence of fraudulent misconduct on the part of any of the individuals involved in the case." Id. at 49, 366 A.2d at 750. Where there is some evidence of fraud, or even bad faith, similar principles do not apply. In Chesapeake Homes, Inc. v. McGrath, 249 Md. 480, 489, 240 A.2d 245, 250 (1968), as in this case, the owner's sales manager had misrepresented the scope of the property, and relying on that representation, the buyer had purchased the property. Although the reported opinion does not state which of the parties had the deed prepared and title search completed, as in this case a plat book and number incorporated by reference was the sole description of the property contained in the deed. Also as in this case, the buyer was an attorney, and therefore "should be held to the exercise of a greater degree of diligence than that demanded of the ordinary layman in a real estate transaction." Id. at 486, 240 A.2d at 248. The owner argued that the buyer had frequently observéd and had many opportunities to inspect a plat showing the true boundaries of the property hanging on the sales manager's wall, and therefore should be estopped from seeking rescission of the contract on the basis of mispresentations. The court found that the sales manager had engaged in a pattern of activity with the evident aim of preventing the disclosure of the true extent of the property to the buyer. It therefore held:
Consequently, the appellants are not in a position to raise an estoppel against the [buyers]. One claiming the benefit of an estoppel must not only be free from fraud in the transaction but he must also act with good faith and reasonable diligence; otherwise no equity arises in their favor. [Citations omitted.]
Id. at 489, 240 A.2d at 250. Similarly here, if the plaintiff has adequately presented a prima facie claim of fraud, the seller may not avoid the claim by arguing that a thorough title search undertaken by the buyer's attorney would have revealed both that the 1975 plat had not been recorded, and that the actual acreage on the lot was smaller than that represented to Fireison by Abell. It is to the question of whether plaintiff's case made out an adequate claim of fraud that we now turn.
IV.
Fraud under Maryland law is proved "when it is shown that a false representation has been made (1) knowingly or (2) without belief in its truth or (3) recklessly, careless whether it be true or false." Piper v. Jenkins, 207 Md. 308, 312, 113 A.2d 919, 921 (1955). Under this standard, the evidence presented by plaintiffs is suf ficient to withstand a Rule 41(b) motion to dismiss. According to plaintiffs' evidence, Abell, the owner's agent, engaged in a pattern of conduct designed to deceive and defraud plaintiffs. Abell led Fireison to believe that lot 6 had been recorded in the land records at 5.1 acres. He induced Fireison to rely to his detriment upon his representations as to the boundaries of lot 6, both as to the tall trees and as to the back part of the lot. Knowing that Firei-son had obtained an option on the property as described by Abell, Abell nevertheless changed the configuration of the property and subtracted some acreage without informing Fireison. Abell failed to comply with the option contract's requirement that he provide copies to Fireison of all new plats and surveys, information that would have put Fireison on notice of the changes. Although Fireison entered the farm several times prior to settlement and saw Abell, Abell never mentioned the changes he had made in the property. Nor, apparently, did he change the configuration of the survey- or's stakes on lot 6 that marked out the boundaries of a 5.1 acre lot. Despite the fact that Abell changed the boundaries of the lot in April of 1976, he did not record the changes until five weeks prior to settlement on the property, in late 1978. Taken together, these facts compellingly demonstrate a pattern of deception by Abell. The trial court's finding that no case of fraud was made out by plaintiffs because the owner "engaged in no direct deceit" is therefore clearly erroneous. Bay General Indus., supra, 418 A.2d at 1054. If not refuted, Fireison's proof entitled him to relief. Accordingly, the court erred in granting the defense motion to dismiss, and we therefore reverse the trial court's order.
So ordered.
. See 2 Montgomery County Code § 50-10 (1984) (surveyor's certificate must accompany recorded plat).