Opinion ID: 2630629
Heading Depth: 3
Heading Rank: 2

Heading: Duty arising from case law

Text: We are not persuaded by Purchaser's argument that case law imposes a duty on the Title Company independent of the instructions. Purchaser relies upon Hurlbert v. Gordon, 64 Wash.App. 386, 824 P.2d 1238 (1992) to define an escrow agent's duty. In that case, an attorney for one of the parties to a real estate transaction also acted as the escrow agent. He drafted the closing documents and submitted them to both parties for approval. Before closing, he also made certain changes to those documents. He sent the revised documents to the parties, but in the cover letter did not affirmatively indicate the changes he had made. The other party and its attorney had the opportunity to review the changed documents. At closing, the attorney-escrow agent did indicate an additional change he had made. The court acknowledged that an escrow agent has the duty to disclose, to both parties, all changes to closing documents. See 64 Wash. App. at 395, 824 P.2d 1238. However, it held that an escrow agent is not required to discuss the documents and the nature of the changes to them paragraph by paragraph. See id. Hurlbert is factually distinguishable from this case. In Hurlbert, the attorney-escrow agent was responsible for drafting the documents and had made changes to the documents he had drafted. Here, the Title Company did not prepare the Agreement or seek to change the legal description. Rather, the Title Company provided the correct legal description of the Denaxas property in the preliminary title report, as was its obligation. The escrow agent utilized the correct legal description in the closing documents as well. Hurlbert does not impose a duty on escrow agents to affirmatively identify differences between the closing documents and documents drafted by others. Purchaser's reliance on Bowers v. Transamerica Title Ins. Co., 100 Wash.2d 581, 675 P.2d 193 (1983), is also misplaced. Under Bowers, lay escrow agents are held to the standard of attorneys when they engage in the practice of law. 100 Wash.2d at 590, 675 P.2d 193. In that case, the conduct at issue was a lay escrow agent's preparation of legal documents, failure to inform the parties of the legal effect of the documents, and failure to advise the parties to obtain independent legal counsel. The lay escrow agent in that case was found to be engaged in the unauthorized practice of law by preparing legal documents. Bowers does not inform the analysis here. Purchaser claims that the Title Company is engaged in the practice of law because it prepared the deed and deed of trust. [5] However, Purchaser does not allege that the Title Company's preparation of these documents did not meet the standard of care for an attorney. Instead, Purchaser complains that the Title Company did not alert Purchaser of the incorrect legal description in the Agreement, which was drafted by Purchaser's real estate agent. This, Purchaser insists, is not the practice of law. [6] The Title Company should not be held to the standard of care of an attorney for conduct that is not alleged to be the practice of law. The Title Company did not breach its fiduciary duty or duty of reasonable care. Purchaser cannot show that the Title Company breached a duty express or implied in the escrow instructions. Nor can it show that the Title Company had a duty to notify Purchaser that the legal description in the Agreement was incorrect or different than in other documents. Because there is no genuine issue of material fact with regard to the Title Company's duty, summary judgment on the negligence and fiduciary duty claims was proper. Therefore, we reverse the Court of Appeals and affirm the trial court's grant of summary judgment in favor of the Title Company.