Ohio Court Finds Purchaser Did Not Suffer Damages Where Title Agency Failed to Include Lien on Closing Settlement Statement

The Court of Appeals of Ohio, Second District, Montgomery County, recently affirmed summary judgment in favor of a title agency, finding that although a contract had been entered into between the plaintiffs and the title agency, the plaintiffs did not suffer any damages as a result of the title agency’s failure to include a lien on the closing settlement statement. Rassi v. Buckeye Title Agency, Inc., 2021 WL 2624660 (Ohio Ct. App. June 25, 2021). In the case, the plaintiffs entered into a contract for the purchase of a home in foreclosure. The purchase price was the “Amount of Payoff.” In connection with the purchase, the plaintiffs asked the defendant title agency “to do the necessary title work and closing.” Although the title examination for the property revealed a first mortgage and a Department of Housing and Urban Development (“HUD”) mortgage, the HUD mortgage was not accounted for on the closing settlement statement. After the plaintiffs purchased, HUD demanded that they satisfy its lien.  The plaintiffs then brought an action against the title agency for, among other things, breach of contract, asserting that the plaintiffs should not be responsible to pay the remaining lien on the property. The trial court granted summary judgment in favor of the title agency, concluding that no contract had been entered into between the plaintiffs and the title agency.

On appeal, the Court affirmed. However, the Court found that the trial court erred in concluding that there was no contract between the plaintiffs and title agency. The Court noted that the plaintiffs requested that the title agency perform the necessary title work and closing, the title agency agreed to and did perform the requested services, and the plaintiff paid the title agency for the completed services. As such, there was an offer, acceptance, and consideration. Moreover, there was no dispute concerning contractual capacity, mutual consent, or the legality of the services requested by the plaintiffs and performed by the title agency. Nonetheless, the Court found that the mistake in failing to include the HUD lien on the closing settlement statement did not cause the plaintiffs to suffer any damages. In finding so, the Court noted that the purchase contract set the purchase price for the home as the “Amount of Payoff.” Therefore, the plaintiffs were contractually obligated to pay off whatever amount was due upon the home, which included the HUD lien, and the title agency’s failure to include the HUD lien on the closing settlement statement did not alter the plaintiffs’ contractual payoff obligation. Accordingly, the Court affirmed summary judgment in favor of the title agency.

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com, Michael Crowley at mcrowley@riker.com, Desiree McDonald at dmcdonald@riker.com, or Kevin Hakansson at khakansson@riker.com.