Court Opinion

ID: 9536251
Source: CourtListenerOpinion
Date Created: 2023-08-07 06:56:41.183605+00
Date Added: 2024-06-11T13:33:29.582684
License: Public Domain

CAMPBELL, J.,
dissenting.
In the plaintiffs’ first and third cause of actions1 they seek to recover the sum of approximately $30,000 for the alleged loss of and the loss of use of real property. The majority, by reversing and remanding this case, give the plaintiffs the opportunity to recover damages from the defendant for a defect of title created and known by the plaintiffs and excluded from coverage under the title policy. The majority’s error is compounded by their giving the plaintiffs’ a second bite at the apple.
In June 1976 a decree was entered dissolving the marriage of James M. Johnson and Wanda Jean Johnson. The decree divided the real property of the parties. In March 1977 the plaintiffs contracted to purchase a tract of land from Wanda Jean Johnson. Thereafter, the defendant issued a title insurance policy on the legal description contained in the contract of sale between Wanda Jean Johnson and the plaintiffs. James M. Johnson fenced a portion of the land described in the title policy. The defendant was notified *272of the James M. Johnson claim. The plaintiffs filed an ejectment action seeking possession of the land which James M. Johnson had fenced. Both Johnsons filed a countersuit seeking to have the legal description of the land in the contract between the plaintiffs and Wanda Jean Johnson reformed on the basis of mutual mistake. The defendant refused the tender of the defense of the countersuit for reformation. The trial court reformed the description of the land in the plaintiffs’ purchase contract to exclude the land awarded to James M. Johnson in the dissolution decree, finding:
" 'That the parties labored under a mutual mistake as to the description of the real property intended to be sold and purchased by the respective parties and that the error in the description contained in the Land Sale Contract was that of the scrivener.’ ”
The plaintiffs did not appeal from the decree in the reformation suit.
The plaintiffs then filed this action against the defendant on the title insurance policy. The defendant answered that the plaintiffs’ claims were not covered under the terms of the title insurance policy. The trial court granted the defendant a summary judgment.
The defendant contends, and the trial court agreed, that the doctrine of collateral estoppel applies to the plaintiffs’ claim for damages for the loss of property. I agree. The plaintiffs are attempting to relitigate issues already adjudicated. Minniti v. Cascade Employers Association, Inc., 280 Or 319, 570 P2d 1171 (1977); In re Gygi, 273 Or 443, 447, 541 P2d 1392 (1975);2 Bahler v. Fletcher, 257 Or 1, 474 P2d 329 (1970).
*273The plaintiffs in this case are seeking to collect damages for the loss of and loss of use of the identical property for which they sought possession in the prior case and which the trial judge said they never intended to buy. The plaintiffs are attempting to bootstrap themselves into court from an adverse ruling in the Polsfoot v. Johnson case.
In the plaintiffs’ second cause of action they seek to recover the sum of approximately $3,250 for litigation expenses and attorney’s fees in the prior case.
The duty to defend is covered by the terms of the title insurance policy, which provides:
"The Company, at its own cost and without undue delay shall provide * * * for the defense of the Insured in all litigation * * * which litigation * * * is founded upon any alleged defect * * * insured against by this policy * * (emphasis supplied)
The schedule of exclusions from coverage of the title insurance policy provides:
"This policy does not insure against loss or damage by reason of the following:
"Defects, liens, encumbrances, adverse claims against the title as insured or other matters (1) created, suffered, assumed or agreed to by the insured * * * or (2) known to the Insured Claimant * * * or (3) resulting in no loss to the Insured Claimant * * * .” (emphasis supplied)
The insurer’s obligation to defend any given case depends on whether the allegations of the complaint allege a cause of action within the coverage of the policy. Crist v. Potomac Ins. Co., 243 Or 254, 413 P2d 407 (1966); Blohm D. Glen Falls Ins. Co., 231 Or 410, 373 P2d 412 (1962).
The countersuit in the prior case filed by the Johnsons alleged mutual mistake and prayed that the contract be reformed. This mutual mistake was necessarily by definition created by the plaintiffs and, *274therefore, was a defect not covered by the title policy. Under exemption "(1)” of the policy, there was no duty by the defendant to defend.
When the defendant title insurance company received the copy of the countersuit for reformation it was entitled to conclude that the plaintiffs could suffer no loss. If the suit for reformation was correct and the legal description did not accurately describe the property intended to be sold due to a mutual mistake, the plaintiffs would receive what they originally bargained to buy. If on the other hand there was no mutual mistake, the plaintiffs would receive the entire property described in the title policy. Thus, the defect would be one falling within exemption "(3)” to the title policy. The alleged defect or claim was outside the policy coverage and, therefore, the defendant had no duty to defend.
I dissent for the above reasons. I would affirm the trial court.
SCHWAB, C.J., and GILLETTE, J., join in this dissent.

The plaintiffs’ complaint confuses and intermingles "counts” and "causes of action.” The second cause of action seeks to recover approximately $3,250 for litigation expenses and attorney fees in the prior case. This same sum of $3,250 is also included in each of the first and third causes of action. However, the main thrust of the first and third causes is to recover damages for the loss of and loss of use of real property.

 "The doctrine of collateral estoppel acts as a restraint on the relitigation of issues already adjudicated. It proceeds upon the premise that, in the absence of a showing of actual unfairness, one who has had a full, complete and fair opportunity to litigate an issue upon which his rights depend, and has lost, need not be granted a second opportunity to contest that issue.” In re Gygi, supra, at 447.