Florida Appellate Court Finds Attorney May Be Liable to Lender for Erroneous Legal Description Prepared by Title Agent

The Florida Court of Appeals recently held that an attorney was not entitled to summary judgment dismissing a legal malpractice claim brought by a lender regarding an erroneous legal description on a mortgage, despite the fact that the attorney had not prepared the legal description himself.  See JBJ Inv. of S. Fla., Inc. v. S. Title Grp., Inc., 2018 WL 3301673 (Fla. Dist. Ct. App. July 5, 2018).  This action concerns a $135,000 loan made by a lender to a borrower and secured by five properties.  The lender used a title agent to handle the loan closing, and the title agent hired an attorney to prepare the note and mortgage.  Although the attorney prepared these documents, the title agent prepared the legal descriptions attached to the mortgage.  After the borrower defaulted and the lender commenced a foreclosure action, the lender discovered that the legal descriptions contained a duplicate description for one of the five properties and completely omitted the description of the most valuable property.  The lender then brought this action against the title agent and the attorney.  The attorney filed a motion for summary judgment, arguing that the legal malpractice claim should be dismissed because (i) there was not attorney-client relationship with the lender because the attorney was retained by the title agent; and (ii) even if a relationship existed, it was the agent who prepared the faulty legal descriptions.  The trial court found that the attorney was not responsible for preparing the legal description and granted the attorney’s motion.

On appeal, the Court reversed.  First, it found that although the lender and the attorney never met, an attorney-client relationship nonetheless may have been formed when the title agent—acting as the lender’s agent—met with and retained the attorney to prepare these documents.  Second, the Court found that “a reasonable jury could find that, once the [attorney] undertook to prepare the mortgage, [he] agreed by implication to ensure that the mortgage encumbered the correct real estate. Even though the title agent agreed to prepare the legal descriptions, [the attorney] arguably had the ultimate responsibility to review that work product for accuracy where he was retained to prepare the mortgage and he charged a separate fee for this service.”  The Court further noted that the mortgage incorporated the legal descriptions, and “was therefore a part of the mortgage that the [attorney] agreed to prepare.”  As such, the Court reversed the trial court’s decision granting the attorney’s motion for summary judgment.

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com, Michael Crowley at mcrowley@riker.com, or Dylan Goetsch at dgoetsch@riker.com.