Appeal by plaintiff from order entered 8 July 2005 by Judge
Ernest B. Fullwood in New Hanover County Superior Court. Heard in
the Court of Appeals 12 April 2006.
Bruce H. Robinson, Jr. for plaintiff-appellant.
Murchison, Taylor & Gibson, PLLC, by Michael Murchison, for
Plaintiff Chad Wagner appeals from an order granting summary
judgment in favor of defendant Branch Banking and Trust Company.
Plaintiff argues that defendant negligently failed to obtain title
insurance on plaintiff's real property when defendant provided
plaintiff with a loan secured thereon. Because plaintiff has
failed to establish that defendant owed him any duty to obtain
title insurance, we affirm the order of the trial court.
Defendant provided plaintiff with a $50,000.00 debt
consolidation loan that was secured by certain real property owned
by plaintiff. When plaintiff later sold that property, hediscovered it was subject to a prior outstanding judgment in the
amount of $23,447.25. Because neither plaintiff nor defendant had
obtained title insurance prior to defendant's loan to plaintiff,
plaintiff was required to satisfy the judgment from the proceeds of
Plaintiff sued defendant, alleging defendant was negligent in
failing to obtain title insurance. Defendant filed a motion for
summary judgment, and, after considering affidavits submitted by
both parties and plaintiff's deposition, the trial court granted
summary judgment in favor of defendant. Plaintiff has timely
appealed to this Court.
Plaintiff's only argument on appeal is that the trial court
erred by granting summary judgment to defendant because defendant
"agreed to see that title insurance was procured," and, therefore,
had a legal duty to ensure it was done. Summary judgment is
appropriate if "the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any
material fact and that any party is entitled to a judgment as a
matter of law." N.C.R. Civ. P. 56(c).
The party moving for summary judgment has the burden of
establishing the lack of any triable issues. Collingwood v. Gen.
Elec. Real Estate Equities, Inc.
, 324 N.C. 63, 66, 376 S.E.2d 425,
427 (1989). Once the moving party meets its burden, then the
non-moving party must "produce a forecast of evidence demonstratingthat [it] will be able to make out at least a prima facie case at
In opposing a motion for summary judgment, the
non-moving party "may not rest upon the mere allegations or denials
of his pleading, but his response, by affidavits or as otherwise
provided in this rule, must set forth specific facts showing that
there is a genuine issue for trial." N.C.R. Civ. P. 56(e). This
Court reviews decisions granting summary judgment de novo
Integrated Techs., Inc. v. Stack
, 132 N.C. App. 807, 809, 513
S.E.2d 572, 574 (1999).
"Negligence is a failure to exercise proper care in the
performance of some legal duty owed by a defendant to a plaintiff
under the circumstances." Carlson v. Branch Banking & Trust Co.
123 N.C. App. 306, 312, 473 S.E.2d 631, 635 (1996), disc. review
, 345 N.C. 340, 483 S.E.2d 162 (1997). "To establish a prima
facie case of negligence liability, the plaintiff must show: (1)
that the defendant owed [him] a duty of care; (2) that the conduct
of the defendant breached that duty; (3) that the breach actually
and proximately caused the plaintiff's injury; and (4) that the
plaintiff sustained damages as a result of the injury." Holshouser
v. Shaner Hotel Group Props. One Ltd. P'ship.
, 134 N.C. App. 391,
394, 518 S.E.2d 17, 21, disc. review denied in part
, 351 N.C. 104,
540 S.E.2d 362 (1999), aff'd per curiam in part
, 351 N.C. 330, 524
S.E.2d 568 (2000). Accordingly, "'[i]n the absence of a legal duty
owed to the plaintiff by [the defendant], [the defendant] cannot be
liable for negligence.'" Stein v. Asheville City Bd. of Educ.
N.C. 321, 328, 626 S.E.2d 263, 267 (2006) (second and thirdalterations original) (quoting Cassell v. Collins
, 344 N.C. 160,
163, 472 S.E.2d 770, 772 (1996), overruled on other grounds by
Nelson v. Freeland
, 349 N.C. 615, 507 S.E.2d 882 (1998)).
A duty of care, supporting a negligence claim, may arise out
of a contractual relationship. Olympic Prods. Co. v. Roof Sys.,
, 88 N.C. App. 315, 322, 363 S.E.2d 367, 371 ("A duty of care
may arise out of a contractual relationship, the theory being that
accompanying every contract is a common-law duty to perform with
ordinary care the thing agreed to be done, and that a negligent
performance constitutes a tort as well as a breach of contract."
(internal quotation marks omitted)), disc. review denied
, 321 N.C.
744, 366 S.E.2d 862 (1988). For this reason, this Court has
acknowledged that a lender has a duty to perform those
responsibilities specified in a loan agreement, but has declined to
impose any duty beyond those expressly provided for in the
agreement. See Camp v. Leonard
, 133 N.C. App. 554, 560, 515 S.E.2d
909, 913 (1999) ("[A] lender is only obligated to perform those
duties expressly provided for in the loan agreement to which it is
a party."); Perry v. Carolina Builders Corp.
, 128 N.C. App. 143,
150, 493 S.E.2d 814, 818 (1997) ("[I]n the absence of [an]
allegation of an express contractual provision between the instant
parties requiring [defendant lender] to ensure application of the
loan funds at issue to an agreed purpose, plaintiffs were owed no
such legal duty."); Carlson
, 123 N.C. App. at 315, 473 S.E.2d at
637 (defendant bank owed no duty to monitor use of loan proceeds
absent express contractual provision so requiring). In the present case, plaintiff has pointed to nothing in the
loan agreement that addresses the issue of title insurance, and we
have found no provision that could reasonably be construed as
controlling the parties' responsibilities with respect to title
insurance. Consequently, pursuant to Camp
, and Carlson
plaintiff has failed to establish that defendant had a duty,
arising from the parties' contractual relationship, to ensure title
insurance was obtained.
Plaintiff nevertheless argues that defendant assumed a duty by
agreeing to obtain title insurance. This Court has held that a
"[d]uty may [also] be imposed if one party undertakes to render
services to another and the surrounding circumstances are such that
the first party should recognize the necessity to exercise ordinary
care to protect the other party or the other party's property; and
failure to do such will cause the danger of injury to the other
party or the other party's property." Williams v. Smith
, 149 N.C.
App. 855, 858, 561 S.E.2d 921, 923 (2002).
The record, however, contains no evidence that defendant ever
agreed to obtain title insurance on plaintiff's property.
Plaintiff's affidavit states only that he "requested . . . [Tammy
Godwin, a business banker with defendant,] to be sure that title
insurance was obtained," and does not state whether she in fact
agreed to do so. Likewise, in plaintiff's deposition he testified
only that "I requested that we have a title search and title
insurance," but again does not say whether Ms. Godwin in fact
agreed to ensure title insurance was obtained. Later in thedeposition, plaintiff noted that he "definitely requested" title
insurance, but again makes no mention of how Ms. Godwin responded
to this request. Then, when plaintiff was pressed about whether he
"specifically recalled asking Ms. Godwin . . . directly to perform
a title search and secure a title policy," he responded only, "I
don't recall how that occurred."
Only plaintiff's unverified complaint specifically alleged
that "defendant agreed to obtain the title insurance on the
property pledged as collateral for the loan." Unsworn statements
may not, however, be considered for summary judgment purposes. See
Venture Props. I v. Anderson
, 120 N.C. App. 852, 855, 463 S.E.2d
795, 797 (1995) (concluding that "the trial court acted properly in
refusing to consider [unverified pleadings]"), disc. review denied
342 N.C. 898, 467 S.E.2d 908 (1996). Thus, plaintiff presented no
evidence that defendant ever "undert[ook] to render [the]
service" to plaintiff of ensuring title insurance was obtained.
, 149 N.C. App. at 858, 561 S.E.2d at 923.
Plaintiff bore the burden of "produc[ing] a forecast of
evidence" demonstrating that defendant had a legal duty to obtain
title insurance. Collingwood
, 324 N.C. at 66, 376 S.E.2d at 427.
Because plaintiff failed to do so, the trial court properly entered
Judges TYSON and JACKSON concur.
Report per Rule 30(e).
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