Mississippi Valley Title Insurance Company et al v. Marion Bank and Trust Company et al

Filing 99

ORDER denying Defendant Thompson's 49 Motion for Summary Judgment; granting Plaintiff's 64 Motion for Partial Summary Judgment; granting 77 Motion to Strike ; denying 83 Motion to Strike. Determination of the amount of the judgment to be entered against Thompson must await resolution of Wells Fargo's claim against Marion Bank. Signed by Chief Judge William H. Steele on 10/12/2012. (tgw)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
NORTHERN DIVISION
MISSISSIPPI VALLEY TITLE
INSURANCE COMPANY, et al.,
Plaintiffs,
v.
MARION BANK AND TRUST
COMPANY, et al.,
Defendants.

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) CIVIL ACTION 11-0538-WS-C
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ORDER

This matter is before the Court on the motion of defendant J. Garrison
Thompson for summary judgment and on the competing motion of plaintiffs
Mississippi Valley Title Insurance Company (“Mississippi Valley”) and Old
Republic National Title Insurance Company (“Old Republic”) (collectively, “the
plaintiffs”) for partial summary judgment. (Docs. 49, 64). The movants have
filed briefs and evidentiary materials in support of their respective positions,
(Docs. 50-63, 65-67, 71, 78-80, 84, 86), and the motions are ripe for consideration.
BACKGROUND
Thompson, a licensed attorney, performed title work for Mississippi Valley
pursuant to an agency agreement (“the Agreement”). In November 2001, while
acting under the Agreement, Thompson performed a title search with respect to
certain property (“the Rabb Property”) in connection with the Rabbs’ procurement
of a loan from CTX Mortgage Company (“CTX”). While acting under the
Agreement, Thompson thereafter issued a commitment for title insurance and a

title policy (“the 2001 Policy”) on behalf of Mississippi Valley.1 The 2001 Policy
insured the CTX mortgage as a first mortgage lien even though an earlier
mortgage to defendant Marion Bank & Trust Company (“Marion Bank”) was of
record.
In 2003, the Rabbs sought an additional mortgage loan from Marion Bank.
Again acting under the Agreement, Thompson performed a title search and
thereafter issued a title commitment and a title policy (“the 2003 Policy”) to
Marion Bank. The commitment did not set out the CTX mortgage as a
requirement or exception, although the subsequently issued 2003 Policy did except
that mortgage.
When the Rabbs defaulted on payment some years later, Marion Bank held
a preferred position, leaving the movants exposed to payment to Wells Fargo on
the 2001 Policy, an exposure potentially increased by the failure of the 2003
commitment to except the CTX mortgage. Count One of the amended complaint
alleges that Thompson’s failures breached the Agreement and also breached
common-law duties.2
The plaintiffs seek partial summary judgment as to their claims under
Count One. The relief sought is partial because it addresses Thompson’s liability
but not the quantum of damages. Thompson moves for summary judgment on the
grounds that Count One is barred by the statute of limitations.
DISCUSSION
Summary judgment should be granted only if “there is no genuine dispute
as to any material fact and the movant is entitled to judgment as a matter of law.”

1

Pursuant to a separate agreement, Old Republic jointly insures under the 2001
Policy. Plaintiff Wells Fargo Bank, N.A. (“Wells Fargo”) is the successor in interest to
the CTX Mortgage and is the current insured under the 2001 Policy.
2

Count Two is brought by co-plaintiff Wells Fargo against Marion Bank. Marion
Bank’s motion for summary judgment is addressed in a separate order.
2

Fed. R. Civ. P. 56(a). The party seeking summary judgment bears “the initial
burden to show the district court, by reference to materials on file, that there are no
genuine issues of material fact that should be decided at trial.” Clark v. Coats &
Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). The moving party may meet its
burden in either of two ways: (1) by “negating an element of the non-moving
party’s claim”; or (2) by “point[ing] to materials on file that demonstrate that the
party bearing the burden of proof at trial will not be able to meet that burden.” Id.
“Even after Celotex it is never enough simply to state that the non-moving party
cannot meet its burden at trial.” Id.; accord Mullins v. Crowell, 228 F.3d 1305,
1313 (11th Cir. 2000); Sammons v. Taylor, 967 F.2d 1533, 1538 (11th Cir. 1992).
“When the moving party has the burden of proof at trial, that party must
show affirmatively the absence of a genuine issue of material fact: it must support
its motion with credible evidence ... that would entitle it to a directed verdict if not
controverted at trial. [citation omitted] In other words, the moving party must
show that, on all the essential elements of its case on which it bears the burden of
proof, no reasonable jury could find for the nonmoving party.” United States v.
Four Parcels of Real Property, 941 F.2d 1428, 1438 (11th Cir. 1991) (en banc)
(emphasis in original); accord Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115
(11th Cir. 1993).
“If the party moving for summary judgment fails to discharge the initial
burden, then the motion must be denied and the court need not consider what, if
any, showing the non-movant has made.” Fitzpatrick, 2 F.3d at 1116; accord
Mullins, 228 F.3d at 1313; Clark, 929 F.2d at 608.
“If, however, the movant carries the initial summary judgment burden ...,
the responsibility then devolves upon the non-movant to show the existence of a
genuine issue of material fact.” Fitzpatrick, 2 F.3d at 1116. “If the nonmoving
party fails to make ‘a sufficient showing on an essential element of her case with
respect to which she has the burden of proof,’ the moving party is entitled to
summary judgment.” Clark, 929 F.2d at 608 (quoting Celotex Corp. v. Catrett,
3

477 U.S. 317 (1986)) (footnote omitted); see also Fed. R. Civ. P. 56(e)(2) (“If a
party fails to properly support an assertion of fact or fails to properly address
another party’s assertion of fact as required by Rule 56(c), the court may …
consider the fact undisputed for purposes of the motion ….”).
In deciding a motion for summary judgment, “[t]he evidence, and all
reasonable inferences, must be viewed in the light most favorable to the
nonmovant ….” McCormick v. City of Fort Lauderdale, 333 F.3d 1234, 1243
(11th Cir. 2003).
There is no burden on the Court to identify unreferenced evidence
supporting a party’s position.3 Accordingly, the Court limits its review to the
exhibits, and to the specific portions of the exhibits, to which the parties have
expressly cited. Likewise, “[t]here is no burden upon the district court to distill
every potential argument that could be made based upon the materials before it on
summary judgment,” Resolution Trust Corp. v. Dunmar Corp., 43 F.3d 587, 599
(11th Cir. 1995), and the Court accordingly limits its review to those arguments the
parties have expressly advanced.
I. Thompson’s Motion for Summary Judgment.
Thompson argues that Count One is governed by the Alabama Legal
Services Liability Act (“the Act”), including its limitations period. The plaintiffs
argue that Count One is timely even if the Act applies but that the Act does not
apply in any event. (Doc. 65 at 21).

3

Fed. R. Civ. P. 56(c)(3) (“The court need consider only the cited materials, but it
may consider other materials in the record.”); accord Adler v. Wal-Mart Stores, Inc., 144
F.3d 664, 672 (10th Cir. 1998) (“The district court has discretion to go beyond the
referenced portions of these [summary judgment] materials, but is not required to do
so.”).

4

A. Timeliness under the Act.
Under the Act, an action generally must be commenced “within two years
after the act or omission or failure giving rise to the claim, and not afterwards.”
Ala. Code § 6-5-574(a). There is a limited exception when “the cause of action is
not discovered and could not reasonably have been discovered within such
period,” but “in no event may the action be commenced more than four years after
such act or omission or failure.” Id.
The Alabama Supreme Court has offered varying explanations of when the
limitations period under Section 6-5-574 begins to run. It has sometimes stated
that “‘a legal-malpractice cause of action accrues, and the statute-of-limitations
period begins to run, when “the act or omission or failure giving rise to the claim”
occurs, and not when the client first suffers actual damage.’” Ex parte Seabol, 782
So. 2d 212, 214 (Ala. 2000) (quoting Ex parte Panell, 756 So. 2d 862, 868 (Ala.
1999) (plurality opinion)). On other occasions, it has indicated that the limitations
period does not begin to run on the date of the act, omission or failure but on the
date the plaintiff first suffers a “legal injury” from the act, omission or failure.
E.g., Sirote & Permutt, P.C. v. Bennett, 776 So. 2d 40, 45 (Ala. 2000); Michael v.
Beasley, 583 So. 2d 245, 252 (Ala. 1991). In a pair of more recent decisions, the
Supreme Court has recognized the two strands of authority but declined to elect
between them, since the plaintiffs’ claims were barred under either approach.
Coilplus-Alabama, Inc. v. Vann, 53 So. 3d 898, 905-07 (Ala. 2010); Denbo v.
DeBray, 968 So. 2d 983, 988-89 (Ala. 2006).
In Mississippi Valley Title Insurance Co. v. Hooper, 707 So. 2d 209 (Ala.
1997), the defendant issued title opinions incorrectly certifying that various
mortgagees seeking title insurance would have a first mortgage lien, and he
thereafter issued title insurance policies based on these inaccurate certifications.
Id. at 211. The Court utilized the “legal injury” approach and held that, under this
test, “any cause of action Mississippi Valley had against Hooper for issuing
insurance policies based on a faulty title opinion accrued when the policies were
5

issued, and not when Mississippi Valley later settled lawsuits filed against it based
on the policies.” Id. at 213. The Hooper Court expressly “reject[ed] the argument
that Mississippi Valley incurred legal injury only when it had to pay claims made
under its policies.” Id.; see also Bennett, 776 So. 2d at 45-46 (discussing Hooper
and concluding that the plaintiffs first suffered legal injury from a faulty legal
opinion when they purchased investment certificates in reliance thereon, not on the
later date the legal opinion was judicially determined to be faulty).
It is uncontroverted that the 2001 Policy was issued in November 2001 and
that the 2003 Policy was issued in November 2003. If the Act applies to Count
One, under Hooper the limitations period began to run at those times.4 Under the
two-year period of Section 6-5-574(a), the limitations period expired in November
2003 and November 2005, respectively. The plaintiffs do not invoke the extended
limitations period for delayed discovery of the cause of action but, even had they
done so and done so successfully, the limitations period would have expired no
later than November 2005 and November 2007, respectively. Since this action
was not filed until September 2011, Count One cannot satisfy Section 6-5-574(a).
The plaintiffs offer several reasons why the limitations period of Section 65-574 does not bar their claim even if the Act applies. First, they argue that Count
One is timely under Section 6-2-6. (Doc. 65 at 21-22). Pursuant to that statute, the
limitations period does not begin to run as to a principal’s claim against its agent
“until the liability of the principal for the act or omission of such deputy or agent
is ascertained by an action of the party aggrieved against the principal.” Ala. Code
§ 6-2-6. The plaintiffs assert that their liability to Wells Fargo has yet to be
ascertained and that they have paid nothing to Wells Fargo, and they conclude that
the limitations period under Section 6-2-6 has yet to expire or even commence.

4

Under the “occurrence” test of Seabol and Pannell, the limitations period would
begin to run at or before these times, since issuance of the policies was Thompson’s final
“act or omission or failure.”
6

Section 6-5-574, however, expressly addresses the interplay between its
provisions and those of Section 6-2-6. “Subsection (a) of this section shall be
subject to all existing provisions of law relating to the computation of statutory
periods of limitations for the commencement of actions, namely, Sectio[n] … 6-26 …; provided, that notwithstanding any provisions of such sections no action
shall be commenced more than four years after the act, omission, or failure
complained of [with a limited exception for minors].” Ala. Code § 6-5-574(b).
An action that is barred by the four-year limitations period of Section 6-5-574(a)
thus cannot be rescued by resort to Section 6-2-6. As the Hooper Court noted,
“this statute [Section 6-2-6] is specifically mentioned in, and therefore subsumed
by, the ALSLA.” 707 So. 2d at 213 n.4. The plaintiffs insist this statement is
dictum, (Doc. 84 at 5), but it was clearly made in order to refute the dissent’s
argument that the plaintiff’s indemnity claim could be timely under Section 6-2-6.
707 So. 2d at 217-18 (Snodgrass, Special C.J., dissenting). At any rate, the
plaintiffs fail to offer any explanation how the reading of Hooper, and this Court,
could be erroneous.
Section 6-2-3, which provides that, in cases of fraud the plaintiff “must
have two years to prosecute his action” after discovering the fact constituting the
fraud, is also listed in Section 6-5-574(b). The Alabama Supreme Court has
described the interplay of these statutes as follows: “[U]nder § 6-5-574(b), a legal
malpractice action based on allegations of fraud [under Section 6-2-3] must be
commenced within two years after the discovery by the aggrieved party of the fact
constituting the fraud; provided, however, that no action may be commenced more
than four years after the act or acts constituting the fraud.” Leighton Avenue
Office Plaza, Ltd. v. Campbell, 584 So. 2d 1340, 1344 (Ala. 1991). The point is
clear: while the statutes listed within Section 6-5-574(b) may extend the
limitations period beyond what they would otherwise be under Section 6-5-574(a),
they cannot extend that period beyond the four-year outer limit imposed by both
subsections.
7

Pivoting away from the Code, the plaintiffs assert that “Section 6-2-6 is
merely a codification of the common law.” (Doc. 65 at 22). The amended
complaint alleges that the Agreement requires Thompson to indemnify Mississippi
Valley for losses sustained due to errors in policies issued by him. (Doc. 12 at 4).
Under the common law, the plaintiffs continue, the limitations period does not
begin to run until the indemnitee’s liability to a third party has become fixed by
actual payment to the third party or by being cast in judgment to the third party.
(Doc. 78 at 21, 23). As that has not occurred with respect to Wells Fargo, the
plaintiffs conclude that the limitations period has not expired or even commenced.
“All legal service liability actions against a legal service provider must be
commenced” within the time periods discussed above. Ala. Code § 6-5-574(a)
(emphasis added). This absolute language admits of no exception. If Count One
constitutes a “legal service liability action” under Section 6-5-572(1), its
timeliness must be measured by the statute and not by any common-law rule that
might apply absent the statute.
The plaintiffs respond that it is not simply that the statute of limitations in
an indemnity case does not begin to run until payment or judgment but that the
cause of action does not even accrue until that point. (Doc. 78 at 20-23 (citing Ex
parte Stonebrook Development, L.L.C., 854 So. 2d 584 (Ala. 2003)). Since “the
statute of limitations [under Section 6-5-574] begins to run … when a cause of
action ‘accrues,’”5 they conclude, it cannot have expired as to their indemnity
claim because that claim has yet to accrue. They believe their position is
vindicated by SouthTrust Bank v. Jones, Morrison, Womack & Dearing, P.C., 939
So. 2d 885 (Ala. Civ. App. 2005).
In Jones, the client bank was sued for malicious prosecution after its
lawyers filed a collection suit against an individual (“Greene”) that plainly had no
liability for the debt. The client filed a third-party complaint against the lawyers
under the Act, seeking indemnity for any liability the client might have to Greene.
5

Coilplus-Alabama, 53 So. 2d at 905.
8

The Court stated that “the existence of any malpractice claim the Bank might have
had against the lawyers was contingent upon the Bank’s potential liability to
Greene for malicious prosecution,” such that the limitations period on the
malpractice claim could not begin to run until “the trial court entered a judgment
for Greene in the underlying action and Greene became entitled to sue the Bank
for malicious prosecution.” 939 So. 2d at 897, 899. Jones, then, does not say that
an indemnity claim under the Act accrues only when the client pays the third party
or is cast in judgment to the third party. On the contrary, Jones says that the
indemnity claim accrues long before the client pays or is cast in judgment, when
the client becomes potentially liable to the third party.
To the doubtful extent that Jones would otherwise be helpful to the
plaintiffs’ position, the Supreme Court’s ruling in Hooper negates it. As noted
above, Hooper held that “any cause of action Mississippi Valley had against
Hooper for issuing insurance policies based on a faulty title opinion accrued when
the policies were issued ….” 707 So. 2d at 213 (emphasis added). The plaintiff in
Hooper “claimed … a right of indemnity,” id. at 212, so such a claim is captured
by Hooper’s holding.
The plaintiffs end with two apparently throw-away arguments. First, they
complain that Hooper is bad policy because it encourages the filing of lawsuits
that may never need to be decided. Second, they ask the Court to replace Hooper
with a rule apparently drawn from Illinois that would delay accrual until
Thompson refused after demand to tender payment. (Doc. 78 at 23-25). The
function of this Court, sitting in diversity, is to apply state law as it is, regardless
of any party’s assessment of its wisdom or preference for another rule.
For the reasons set forth above, the Court concludes that, if Count One is
subject to the Act, it is barred by the statute of limitations.

9

B. Applicability of the Act.
“There shall be only one form and cause of action against legal service
providers in courts in the State of Alabama and it shall be known as the legal
service liability action and shall have the meaning as defined herein.” Ala. Code §
6-5-573. A “legal service provider” includes “[a]nyone licensed to practice law by
the State of Alabama or engaged in the practice of law in the State of Alabama.”
Id. § 6-5-572(2). Thompson was at all relevant times licensed to practice law by
the State of Alabama. (Doc. 50, Exhibit 1 at 1). Count One therefore is covered
by the Act if it constitutes a “legal service liability action.”
A “legal service liability action” is defined as “[a]ny action against a legal
service provider in which it is alleged that some injury or damage was caused in
whole or in part by the legal service provider’s violation of the standard of care
applicable to a legal service provider.” Ala. Code § 6-5-572(1). “[W]e conclude,
from the language of the statute, that the ALSLA does not apply to an action filed
against a ‘legal service provider’ by someone whose claim does not arise out of
the receipt of legal services.” Cunningham v. Langston, Frazer, Sweet & Freese,
P.A., 727 So. 2d 800, 804 (Ala. 1999). “Conversely, from a plaintiff’s
perspective, the ALSLA applies to any claim originating from his receipt of legal
services.” Id. at 803. The question is whether Count One arises from Thompson’s
provision of legal services.
The defendant in Hooper rendered title opinions incorrectly certifying that
certain mortgagees would have first mortgage liens, and he then issued title
insurance policies based on his incorrect certifications. 707 So. 2d at 211. The
Supreme Court ruled that any cause of action for issuing policies based on faulty
title opinions was covered by the Act. Id. at 213. Under Hooper, the rendition of
a title opinion by a lawyer constitutes the provision of legal services, such that any
cause of action based on the faulty title opinion is subject to the Act.6 And under
6

This ruling is not surprising, given that “a non-lawyer’s rendering a title opinion
regarding real property amounts to the unauthorized practice of law.” Hooper, 707 So.
10

Hooper, the lawyer’s subsequent issuance of a title policy based on his own faulty
title opinion is also subject to the Act – not because issuance of a policy
constitutes the delivery of legal services, but because in that situation the lawyer’s
“duties as the title insurance agent [cannot] be divorced from [his] duty as an
attorney.” Id. at 216.7
Thompson, however, did not issue a title opinion. Instead, as the parties
agree,8 he performed title searches in 2001 and 2003, then issued commitments for
title insurance, then issued title policies.
According to cases relied on by the plaintiffs, (Doc. 65 at 26; Doc. 78 at 78), “the issuance of title insurance … do[es] not constitute the practice of law”
under Ala. Code § 34-3-6(c). Coffee County Abstract and Title Co. v. State ex rel.
Norwood, 445 So. 2d 852, 855 (Ala. 1983). Likewise, the issuance of a
commitment for title insurance – so long as the commitment does not encompass a
title opinion – does not constitute the practice of law. Land Title Co. v. State ex
rel. Porter, 299 So. 2d 289, 292, 295-96 (Ala. 1974). Thompson neither disagrees
with these propositions nor suggests there is a meaningful difference between the
“practice of law” under Title 34 and the provision of “legal services” under the
Act. Thus, a ruling that the Act applies cannot rest simply on Thompson’s actions
in issuing commitments and policies.

2d at 215 (citing Upton v. Mississippi Valley Title Insurance Co., 469 So. 2d 548, 556
(Ala. 1985)).
7

Thompson appears to believe that, under Hooper, issuance of a title policy by a
lawyer always constitutes the provision of legal services. (Doc. 50 at 19; Doc. 80 at 4-5;
Doc. 86 at 3). What Hooper actually stated was that, because a non-lawyer agent cannot
be required to look behind a lawyer’s title opinion before issuing a policy, when a lawyer
as agent issues a title policy based on his own title opinion there is “no duty separate and
apart from [his] duty as a legal service provider,” and any claim as to issuance of the
policy is thus based on the lawyer’s provision of legal services in the form of a title
opinion. 707 So. 2d at 216.
8

(Doc. 50 at 1, 4; Doc. 65 at 6, 8, 11, 27; Doc. 78 at 7, 17).
11

Count One is therefore subject to the Act if, and only if, Thompson’s
performance of a title search constituted the provision of legal services.
Thompson proposes that Hooper has already resolved this issue in his favor. He
does not, and cannot, maintain that the Supreme Court’s opinion addressed any
such issue. Instead, he extracts from the complaint and amended complaint found
in the case file maintained by the Circuit Court of Montgomery County that the
Hooper plaintiff “was arguing that Mr. Hooper had issued title policies that were
based on his own faulty title searches and opinions.” (Doc. 86 at 4). Of course,
what is in the pleadings and what a litigant argues before the Supreme Court can
be widely different things, and Thompson has not attempted to show that, on
appeal, the plaintiff pressed any issue concerning title searches. At any rate,
whatever the plaintiff may have argued to the Supreme Court, that body did not
address or decide whether a title search is covered by the Act.
“For a case to be stare decisis on a particular point of law, that issue must
have been raised in the action, decided by the court, and its decision made part of
the opinion of the case ….” Ex parte Town of Lowndesboro, 950 So. 2d 1203,
1209 (Ala. 2006) (internal quotes omitted). Even if the Hooper plaintiff argued to
the Supreme Court that the defendant’s performance of a title search was not
subject to the Act (a possibility Thompson has not shown to have occurred), the
Supreme Court patently did not decide any such issue, and it did not make any
such decision part of its opinion. In short, after Hooper the question remains an
open one.9
Other than Thompson’s ineffectual invocation of Hooper, the parties
identify no Alabama appellate case addressing whether the performance of a title

9

The plaintiffs move to strike the Hooper record for failure to identify it under
Rule 26(a) and because it is irrelevant. (Doc. 83). Assuming that Thompson violated
Rule 26(a), the Court finds the failure harmless under Rule 37(c)(1) since, as discussed in
text, the record does not advance Thompson’s position. The appropriate response to
irrelevant evidence is not to strike the evidence but to consider it and afford it the weight
(none) it deserves. Accordingly, the motion to strike the Hooper record is denied.
12

search by a lawyer is subject to the Act, and the Court’s independent research has
uncovered none. Thompson, however, emphasizes a trial court decision which, he
says, found Hooper to apply to a title search. (Doc. 50 at 19-20; Doc. 80 at 9-11).
His reliance is misplaced.
First, the Court’s role in this diversity case, in the absence of an Alabama
Supreme Court decision resolving the question, is to “anticipate how the Supreme
Court would decide this case.” State Farm Mutual Automobile Insurance Co. v.
Duckworth, 648 F.3d 1216, 1224 (11th Cir. 2011). “In doing so, we consider, in
addition to Supreme Court precedent, decisions of the State’s intermediate
appellate courts that appear to be on point, provided that there is no indication that
the Supreme Court would reject them.” Id. While it is permissible to look to state
trial court decisions, they are of limited significance when the state courts
themselves afford such decisions little weight and when the difficulty of even
locating such decisions makes it unlikely that other, contrary trial court decisions
will come to light. See King v. Order of United Commercial Travelers of
America, 333 U.S. 153, 159-62 (1948); accord Roecker v. United States, 379 F.2d
400, 406 (5th Cir. 1967). Trial court decisions are not regarded as precedent,
Scrushy v. Tucker, 70 So. 3d 289, 309 (Ala. 2011), and Thompson does nothing to
suggest that he has, or anyone else easily could, ensure that no other trial court
decisions on the point exist.
Second, the trial court’s exceptionally brief order merely states that “[t]his
Court cannot distinguish plaintiff’s claim against this defendant from claim [sic]
by the plaintiff against the defendant in” Hooper, without reciting any facts or
offering any reasoning for its conclusion. (Doc. 50, Exhibit 37). This judicial
silence is especially important because the defendant’s brief in support of his
motion for summary judgment argued that “the work of Mr. Dillard in issuing a
title opinion was that of a legal service provider and therefore the ALSLA
applies.” (Id., Exhibit 35 at 5 (emphasis added)). There is thus a high probability
that the trial court incorrectly understood that the case involved a title opinion and
13

issued its ruling on that basis. While an express, reasoned analysis by a state trial
court might merit consideration by a federal court in determining how the
Alabama Supreme Court would resolve the pertinent legal issue, the opaque, oneline conclusion offered here does not.
Thompson attempts to enhance the weight of the trial court’s ruling by
noting that its grant of summary judgment was affirmed by the Alabama Court of
Civil Appeals. And so it was, but without opinion pursuant to Alabama Rule of
Appellate Procedure 53(a). (Doc. 50, Exhibit 42). “An order of affirmance issued
by the Supreme Court or the Court of Civil Appeals by which a judgment or order
is affirmed without opinion, pursuant to section (a), shall have no precedential
value and shall not be cited in arguments or briefs and shall not be used by any
court within this state, except for [certain purposes not germane here].” Ala. R.
App. P. 53(d). “[A] federal court adjudicating a matter of state law in a diversity
suit is, in effect, only another court of the State; it would be incongruous indeed to
hold the federal court bound by a decision which would not be binding on any
state court.” King, 333 U.S. at 161 (footnote and internal quotes omitted). The
appellate court’s bare affirmance does not furnish this Court with grounds to
conclude that the Alabama Supreme Court would declare a lawyer’s performance
of a title search to be the provision of legal services within the Act. This is
especially so in light of the material discussed below.10
As noted, the plaintiffs assume that only that which constitutes the “practice
of law” under Title 34 constitutes the provision of “legal services” for purposes of
the Act, and Thompson offers no refutation of this proposition. The Court
therefore accepts the identity of these concepts for purposes of this case.
The Alabama Code identifies four categories of the practice of law. First,
representing another before a court or other body. Ala. Code § 34-3-6(b)(1).
10

The plaintiffs move to strike the Dillard record as irrelevant. (Doc. 83). As
discussed in note 9, supra, irrelevant evidence is not subject to being stricken, merely
ignored. Accordingly, the motion to strike is denied.
14

Second, representing another in connection with the prevention or redress of a
wrong or the establishment or enforcement of a right. Id. § 34-3-6(b)(3). Third,
resolving disputed accounts, claims or demands of another. Id. § 34-3-6(b)(4).
Thompson plainly did not engage in any of this activity when he performed a title
search.
The final category of the practice of law includes two types of conduct:
“advis[ing] or counsel[ing] another as to secular law” and drawing (or assisting in
the drawing of) “a paper, document or instrument affecting or relating to secular
rights.” Ala. Code § 34-3-6(b)(2). In Land Title, the state of Alabama accused a
title insurer of engaging in the unauthorized practice of law. The insurer had
“made an examination of the public records of Blount County” and had issued a
title commitment based thereon. 299 So. 2d at 290. The Supreme Court held that
issuance of the commitment did not constitute the rendering of advice or counsel
and did not constitute the preparation of any document relating to secular rights
and therefore did not constitute the practice of law. Id. at 290, 295-96. Along the
way, the Supreme Court confirmed that “[i]t is clear that a title insurance company
must be allowed to review public records and specify any curative work to be done
before it will issue a policy.” Id. at 295. This statement indicates that the
performance of a title search (which is a review of public records, Ala. Code § 2725-3(10)) does not constitute the practice of law, even when the search results in
the inclusion of requirements and exceptions in the title commitment.
In addition, “preparing abstracts of title” does not constitute the practice of
law. Ala. Code § 34-3-6(c). An “abstract of title” is “[a] compilation or summary
of all instruments of public record of whatever kind or nature which in any manner
affect title to a specified parcel of real property.” Id. § 27-25-3(1). A title search
is “[a] search of the records in the office of the judge of probate,” id. § 27-253(10), from which search “[t]he examiner then prepares an abstract of the
documents examined.” Black’s Law Dictionary 1333 (5th ed. 1979). If preparing
an abstract of title does not constitute the practice of law, it is difficult to see why
15

performing the title search from which an abstract of title may be prepared would
constitute the practice of law.11
Finally, there is uncontroverted evidence that many title searches in
Alabama are routinely undertaken by non-lawyers. (Matthews Deposition at 22;
Doc. 66, Exhibit 7 at 3, ¶ 6). As the plaintiffs note, (Doc. 78 at 18), if Thompson’s
view is accepted and performance of a title search constitutes the practice of law,
all of these laypersons are engaged in the unauthorized practice of law and subject
to criminal prosecution. Ala. Code § 34-3-7. That outcome does not make it
impossible for Thompson’s stance to be correct, but the potentially serious
consequences of adopting his position cry out for a solid, reasoned justification for
doing so.
Thompson, however, provides none. Instead, he asserts that, in the course
of performing his title searches, he “analyze[d] the documents in the chain of title,
dr[e]w conclusions from those documents, and formulate[d] an opinion as to the
status of title and how the documents in the chain of title affect record title to the
property,” with those opinions “based upon [his] legal education, training, and
experience.” (Doc. 50, Exhibit 1 at 2). In light of Land Title’s pronouncement
that conducting a title search and issuing a title commitment based on its results
does not constitute the practice of law, Thompson’s affidavit is ineffectual. Even
absent Land Title, however, Thompson’s title search could constitute the practice
of law under Section 34-3-6(b)(2) only if it included “advis[ing] or counsel[ing]”
Mississippi Valley as to secular law. While Thompson may have formed opinions
as to secular law in the course of his title search, he does not claim to have advised
or counseled Mississippi Valley concerning whatever opinions he held. On the
contrary, and on his own, he simply prepared title commitments setting forth
11

Thompson testified that, upon receiving a title order, he would either order an
abstract of title or do a title search himself, (Thompson Deposition at 20), reflecting their
functional equivalency. As to the 2001 Policy, Thompson relied on existing abstracts,
supplemented by his review of courthouse records for the period post-dating the
abstracts. (Id. at 57-58).
16

requirements and exceptions – conduct that Land Title holds not to constitute the
practice of law. 12
Thompson notes that Mississippi Valley relied on him “to evaluate the
documents in the chain [of title] and … evaluate the risks that the company is and
is not willing to accept.” (Doc. 50 at 18). Again, however, Thompson did not
advise or counsel Mississippi Valley about those risks but at most considered
those risks in making his own determination to issue the subject commitments and
policies. Moreover, the evaluation of risk is not a lawyer’s monopoly but the
fundamental attribute of an insurer. See, e.g., Parker v. Ward, 614 So. 2d 975, 977
(Ala. 1992) (“[T]itle policies except any risks apparent after a title search.”); Land
Title, 299 So. 2d at 295 (the issuance of a title commitment “rested entirely upon
‘risk’ versus the premium charged for such undertaking”).
Thompson emphasizes that the Agreement required him to ensure that “all
commitments and policies issued under this contract … are issued only in
accordance with and in compliance with the written opinion of any approved
attorney.” (Doc. 50, Exhibit 3 at 1, ¶ 3). Similarly, he notes that the agent’s
manual requires an approved attorney to issue a title opinion and/or a certification
of title. (Id., Exhibit 4 at 1-2, 1-4). He concludes that the Agreement and manual
12

The plaintiffs have filed a motion to strike portions of Thompson’s affidavit as
an expert opinion offered without either qualification or compliance with discovery rules.
(Doc. 77). Thompson responds that all the challenged material is composed of
statements of fact and lay opinions. (Doc. 85). The Court determines that Thompson’s
testimony that he analyzes documents, draws conclusions from them, and formulates
opinions as to the status of title based on his legal judgment are statements of fact. As to
this testimony, the motion to strike is denied. His testimony that his work searching title
is performed “as a legal service provider” in the “regular course of [his] business as a
practicing attorney,” and that this work “require[s] [him] to perform legal services” and
constitutes the “practice of law,” is the expression of expert opinion. Since Thompson
does not argue that it is permissible for him to offer expert opinion testimony, the motion
to strike this testimony is granted.
Of course, even were the motion to strike denied in its entirety, Thompson’s mere
opinion that his challenged conduct comes within the Act could not possibly alter the
Court’s conclusion that the Alabama Supreme Court would rule otherwise. This is
especially true given the painful absence of any reasoned legal basis for his bald opinion.

17

“specifically require the involvement of an attorney prior to the issuance of a title
policy.” (Doc. 50 at 18; Doc. 80 at 6).
As Thompson concedes, he was not an “approved attorney” as the parties
employed that term but rather an “attorney agent.” (Doc. 50 at 17-18). And as he
likewise concedes, neither he nor any other attorney created a written opinion
before issuing the subject title commitments and policies. Nevertheless, since
Thompson was an attorney, and since he was an “attorney agent,” it can safely be
assumed that the parties did intend an attorney to be involved prior to issuance of a
title policy. But the mere involvement of an attorney does not demonstrate that
the attorney’s actions represent the practice of law; the parties could agree that an
attorney must sign all company checks, but that could not convert the attorney’s
signature into the practice of law.
For the reasons set forth above, the Court concludes that the Alabama
Supreme Court would rule that Thompson’s performance of title searches, his
issuance of title commitments, and his issuance of title policies in relation to the
2001 Policy and the 2003 Policy did not constitute the provision of legal services
and are not within the Act. Accordingly, Count One is not subject to the Act’s
statute of limitations. Since Thompson’s motion for summary judgment is based
exclusively on that statute of limitations, his motion is due to be denied.
II. Plaintiffs’ Motion for Summary Judgment.
Thompson’s resistance to the plaintiffs’ motion for summary judgment is
confined to his statute-of-limitations argument. (Doc. 80). Seeing this, the
plaintiffs declare victory. (Doc. 84 at 2). Their celebration is premature.
Because Rule 56(a) specifies that summary judgment may be entered only
when there is no genuine issue of material fact and the movant is entitled to
judgment as a matter of law, “the district court cannot base the entry of summary
judgment on the mere fact that the motion was unopposed but, rather, must
consider the merits of the motion.” United States v. One Piece of Real Property,
18

363 F.3d 1099, 1101 (11th Cir. 2004). The quoted statement constitutes a holding.
Reese v. Herbert, 527 F.3d 1253, 1269 (11th Cir. 2008). This rule does not allow
the Court to grant summary judgment merely because Thompson has offered no
opposition to the merits of the motion.
On the other hand, the Court’s review is less searching than it would be had
Thompson opposed the motion on its merits. “The district court need not sua
sponte review all of the evidentiary materials on file at the time the motion is
granted, but must ensure that the motion itself is supported by evidentiary
materials. [citation omitted] At the least, the district court must review all of the
evidentiary materials submitted in support of the motion for summary judgment.”
One Piece of Real Property, 363 F.3d at 1101. Should this review reveal the
plaintiffs’ entitlement to summary judgment, under Dunmar the Court will not
consider any legal or factual arguments Thompson could have, but has not,
asserted in opposition.
“[A] principal is entitled to indemnification from its agent for damages
caused by the agent’s tortious conduct.” Line v. Ventura, 38 So. 3d 1, 13 (Ala.
2009). Such tortious conduct includes the agent’s “negligent failure to perform his
duties.” Id. “Negligence is defined as the failure to exercise the standard of care
that a reasonably prudent person would have exercised in a similar situation ….”
Dixon v. Hot Shot Express, Inc., 44 So. 3d 1082, 1092 (Ala. 2010).
It is uncontroverted that all of Thompson’s work at issue herein was
performed pursuant to the Agreement, which “designates and hereby appoints
[Thompson], as agent of [Mississippi Valley] to issue policies of title insurance
upon properties” in Alabama. (Doc. 66, Exhibit 8 at 1). It is uncontroverted that
Thompson was an agent and Mississippi Valley a principal for purposes of tort
liability.
It is uncontroverted that, under the Agreement, Thompson “agree[d] to
indemnify [Mississippi Valley] from all loss, cost or damage which [Mississippi
Valley] may sustain or become liable for on account of … failure of any
19

commitment … or policy issued by [Thompson] … to correctly … reflect the then
condition of the title resulting from or occurring by reason of errors and omissions
in [Thompson’s] abstracting or record search of the title, or the failure to reflect an
appropriate requirement or exception therein as to any lien, claim, encumbrance or
other defect … known to [Thompson].” (Doc. 66, Exhibit 8 at 1).
It is uncontroverted that the 2001 Policy and the commitment preceding it
were issued by Thompson without reflecting the then condition of title, in that they
did not note the existence of the Marion Bank mortgage, much less identify it as
an exception or requirement, even though the mortgage was properly recorded and
indexed and even though Thompson had personal knowledge of the mortgage.13 It
is uncontroverted that this failure constituted a failure to exercise the standard of
care that a reasonably prudent title agent would have exercised in a similar
situation. (Doc. 66, Exhibit 6 at 3, 4-5). It is further uncontroverted that this
failure breached the Agreement and gave rise to an indemnity obligation. It is
further uncontroverted that this failure proximately caused damage to the
plaintiffs, since the commitment and policy insured CTX in a first lien priority
position despite Marion Bank’s prior recorded mortgage, obligating the plaintiffs
to make payment to Wells Fargo on the 2001 Policy after the Rabbs defaulted and
Marion Bank foreclosed.
It is uncontroverted that the commitment preceding issuance of the 2003
Policy was issued by Thompson without reflecting the then condition of title, in
that it did not note the existence of the CTX mortgage, much less identify it as an
exception or requirement, even though that mortgage was properly recorded and
indexed and even though Thompson had personal knowledge of the mortgage. It
is uncontroverted that this failure constituted a failure to exercise the standard of
care that a reasonably prudent title agent would have exercised in a similar
situation. (Doc. 66, Exhibit 6 at 3, 5-6). It is further uncontroverted that this
13

Thompson closed the loan for Marion Bank in 1997 and issued Marion Bank a
title policy. (Doc. 65 at 7).
20

failure breached the Agreement and gave rise to an indemnity obligation. It is
further uncontroverted that this failure was the proximate cause of any further
damage to the plaintiffs.14
CONCLUSION
For the reasons set forth above, Thompson’s motion for summary judgment
is denied and the plaintiffs’ motion for partial summary judgment as to liability is
granted. Determination of the amount of the judgment to be entered against
Thompson must await resolution of Wells Fargo’s claim against Marion Bank.
DONE and ORDERED this 12th day of October, 2012.
s/ WILLIAM H. STEELE
CHIEF UNITED STATES DISTRICT JUDGE

14

Whether the plaintiffs experienced any further damage from this failure
depends on the success of Wells Fargo’s claim in Count Two against Marion Bank and so
cannot be resolved on the instant motion.
21