COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 72111 HILLIARD PROPERTIES, INC., : : Plaintiff-Appellant : JOURNAL ENTRY : and vs. : OPINION : COMMONWEALTH LAND TITLE : INSURANCE CO., : : Defendant-Appellee : DATE OF ANNOUNCEMENT OF DECISION : DECEMBER 18, 1997 CHARACTER OF PROCEEDING: : Civil appeal from : Common Pleas Court : Case No. 285978 JUDGMENT : REVERSED AND JUDGMENT : ENTERED FOR APPELLANT. DATE OF JOURNALIZATION : APPEARANCES: For plaintiff-appellant: Donald H. Powers 2 Berea Commons, Suite 215 P.O. Box 1059 Berea, Ohio 44017 For defendant-appellee: Larry R. Rothenberg WELTMAN, WEINBERG & ASSOCIATES 323 Lakeside Avenue, West Suite 200 Cleveland, Ohio 44113-1099 -2- NAHRA, P.J.: Appellant, Hilliard Properties, Inc. (hereinafter Hilliard ), appeals the verdict in favor of appellee, Commonwealth Land Title Insurance Co. (hereinafter Commonwealth ) in its action for payment of special assessments under a title insurance policy issued by Commonwealth. In April, 1993, Hilliard purchased land in Westlake, Ohio with the intent to subdivide the property. Attorneys Title Agency (hereinafter ATA ), as agent of Commonwealth, issued a title commitment for the property and eventually issued a title insurance policy (hereinafter the policy ) to Hilliard. The policy did not exclude liability for special assessments; rather, it stated in Schedule B that There are no Special Taxes and Assessments on the above captioned property of any kind. Hilliard entered an agreement to sell the property, subdivided into separate lots, to a builder. In September, 1994, Hilliard attempted to file a plat subdividing the property. Before the City of Westlake accepted the plat, it required a special assessment on the property to be paid in full. At that time, Hilliard contacted ATA, which told it to pay the special assessment. ATA offered to ask the City of Westlake to file the plat with a promise to pay the assessment from funds held in escrow for Hilliard. Hilliard eventually paid the assessment in full, avoiding penalties in his contracts to sell property in the subdivision. A two-day bench trial was conducted. Hilliard called as witnesses Brian X. Needles, its president, and Larry R. Rothenberg, -3- an officer with ATA. Commonwealth called as its only witness Michael McGough, a title examiner who performed work on Hilliard's title insurance policy. The court found for Commonwealth. In its journal entry of January 28, 1997, the court made the following findings of fact and conclusions of law: FINDINGS OF FACT *** 6. The actual title policy states there are no special taxes and assessments on the property. Clearly, this is a change from the commitment. Defendant claims the change was due to a clerical error by ATA when the policy was typed. Nonetheless, the policy was signed by defendant and delivered to plaintiff. 7. The title policy states the insured is required to give prompt written notice to the defendant of any claims or disputes. The policy further states that the insured must notify the defendant prior to paying any claim. 8. The policy further states that the insured's failure to notify will not prejudice the insured unless the defendant is prejudiced by such failure, and only to the extent of the prejudice. 9. Brian Needles testified that he learned of the $23,723.45 special assessment on 9/7/97 or 9/8/94 and that he immediately called employees of ATA with whom he had dealt but are admittedly not officers of the company. *** 11. Plaintiff concedes that written notice was not given to defendant prior to the payment of the special assessment. 12. Defendant did not have an opportunity to defend, negotiate, settle, avoid or otherwise compromise the assessment in the amount of $23,723.45. *** CONCLUSIONS OF LAW -4- 1) As the title commitment is not the actual contract, defendant cannot avoid the special assessment claiming a clerical error was made in typing the policy of insurance. The parties are bound by the express language of the contract. 2) Just as the defendant is bound by the express language of the contract, so is the plaintiff. It is uncontroverted that plaintiff did not give written notice to defendant prior to paying the special assessment. This prejudiced defendant's right to defend, negotiate, settle, avoid or otherwise compromise the assessment. 3) Plaintiff may not recover interest or attorney fees. 4) Judgment for the defendant and against the plaintiff. I. We address appellant's third, fourth, and seventh assignment of error first. They read: III. THE TRIAL COURT'S FINDING OF FACT 12, defendant did not have an opportunity to defend, negotiate, settle, avoid or otherwise compromise the assessment in the amount of $23,723.45" IS CONTRARY TO THE MANIFEST WEIGHT OF THE EVIDENCE AND THE ADMISSIONS OF DEFENDANT. IV. THE TRIAL COURT ERRED WHEN IT GRANTED JUDGMENT FOR DEFENDANT WITHOUT DEFENDANT'S HAVING SHOWN THE EXTENT TO WHICH IT WAS PREJUDICED BY REASON OF PLAINTIFF'S NOT HAVING GIVEN DEFENDANT IMMEDIATE WRITTEN NOTICE OF THE SPECIAL ASSESSMENT WHEN PLAINTIFF LEARNED OF IT. VII. THE TRIAL COURT'S CONCLUSION OF LAW 4, JUDGMENT FOR THE DEFENDANT AND AGAINST THE PLAINTIFF IS IN ERROR, INASMUCH AS JUDGMENT SHOULD BE FOR PLAINTIFF AND AGAINST DEFENDANT. We agree that the trial court erred in determining its verdict for appellee, find that the court should have entered a verdict for appellant, and enter a verdict for appellant in the amount of -5- $23,723.45, the amount Hilliard paid for the special assessment, plus statutory interest pursuant to R.C. 1343.03 in the amount of 10% from September 8, 1994, when this cause of action accrued, through the date of this judgment. Commonwealth argues that the language included in Schedule B of the policy was a clerical error and it is therefore entitled to reformation of the contract. Reformation is an equitable tool available to correct errors in a written instrument in order to conform it to the original intent of the parties. Berardi v. Ohio Turnpike Comm.(1965), 1 Ohio App.2d 365, 205 N.E.2d 23. Clear and convincing evidence of the error must be present to allow a court to deviate from the terms of the written instrument. See, e.g., Potter v. Potter (1875), 27 Ohio St. 84. In this case, the language excluding coverage for special assessments in the title commitment is different in both meaning and grammar from that of the policy, and no evidence of mutual intent as to the coverage was presented. Because of this, we find Commonwealth's claim for reformation to be without merit. Consequently, the terms of the policy as issued control. The court correctly determined that the terms of the title insurance policy determined the resolution of this case. However, the trial court incorrectly relied on the fact that Hilliard did not provide written notice of the loss where no evidence of actual prejudice to Commonwealth was in evidence. The clause regarding notice in the policy states: * * * -6- 3. DEFENSE AND PROSECUTION OF ACTIONS -- NOTICE OF CLAIM TO BE GIVEN BY AN INSURED CLAIMANT * * * (b) The insured shall notify the Company promptly in writing (i) in case any action or proceeding is begun or defense is interposed as set forth in (a) above, (ii) in case knowledge shall come to an insured hereunder of any claim of title or interest which is adverse to the title to the estate or interest, as insured, and which might cause loss or damage for which the Company may be liable by virtue of this policy, or (iii) if title to the estate or interest, as insured, is rejected as unmarketable. If such prompt notice shall not be given to the Company, then as to such insured all liability of the Company shall cease and terminate in regard to the matter or matters for which such prompt notice is required; provided, however, that failure to notify shall in no case prejudice the rights of any such insured under this policy unless the Company shall be prejudiced by such failure and then only to the extent of such prejudice. * * * Section 3(B)(ii) clearly required Hilliard to notify Commonwealth of the assessment. However, under this section, Hilliard's failure to notify Commonwealth prejudices its rights as an insured only to the extent that Commonwealth is prejudiced. In its finding of fact number 12 the court stated that Hilliard prejudiced Commonwealth's opportunity to defend negotiate, settle, avoid or otherwise compromise the assessment ***. (Emphasis added.) Commonwealth presented no evidence that it was actually prejudiced by Hilliard's failure to notify it. Although Commonwealth's opportunity to assess Hilliard's claim was prejudiced in this case, no evidence was presented to show Commonwealth had the ability to lessen, compromise, abort, or avoid the special assessment. Because of this, Hilliard's failure to notify Commonwealth in writing is not determinative of the outcome -7- of this case. Rather, the issue becomes whether the assessment was excluded from coverage. The policy contains the following language: EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy: * * * 3. Defects, liens, encumbrances, adverse claims, or other matters (a) created, suffered, assumed or agreed to by the insured claimant; (b) not known to the Company and not shown by the public records but known to the insured claimant either at Date of Policy or at the date such claimant acquired an estate or interest insured by this policy and not disclosed in writing by the insured claimant to the Company prior to the date such insured claimant became an insured hereunder; (c) resulting in no loss or damage to the insured claimant; (d) attaching or created subsequent to Date of Policy; (e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the estate or interest insured by this policy. Although Commonwealth argues that Hilliard, through its purchase agreements buying and selling the property, assumed the obligation to pay the assessment, the policy stated that no special assessments were attached to the property. In construing contracts, specific provisions are generally read to negate conflicting general provisions. See, e.g., Edmondson v. Motorists Mutual Ins. Co. (1976), 48 Ohio St.2d 52, 356 N.E.2d 722. Here, the policy specifically provided coverage against the special assessments, where the exclusion terms were of a general nature. Accordingly, the assessment was insured against. -8- Appellant's third, fourth, and seventh assignments of error are well taken. II. Appellant's sixth assignment of error reads: VI. THE TRIAL COURT'S CONCLUSION OF LAW 3, Plaintiff may not recover interest or attorney fees IS CONTRARY TO LAW, IN THE EVENT THIS COURT REVERSES THE TRIAL COURT'S JUDGMENT FOR DEFENDANT. Hilliard argues that it is entitled to prejudgment interest and reimbursement of it's attorney's fees in bringing and maintaining this action because Commonwealth's actions border on bad faith. Appellant's brief page 30. As stated in Part I, supra,Hilliard is entitled to interest pursuant to R.C. 1343.03 as the amount owed on the claim was readily ascertainable. Commonwealth argues that Hilliard is not entitled to attorney's fees in this case because in these circumstances 1) the terms of the policy do not provide for the payment of fees and 2) case law does not provide for the award of attorney's fees. We agree with appellee and overrule appellant's sixth assignment of error to the extent appellant asks for attorney's fees. Although attorney's fees have been awarded to an insured in litigation with an insurer, see, e.g., Motorists Mutual Ins. Co. v. Brandenburg (1995), 72 Ohio St.3d 157; Hoskins v. Aetna Life Ins. Co. (1983), 6 Ohio St.3d 272; Willoughby Hills v. Cincinnati Ins. Co. (1986), 26 Ohio App.3d 146, the circumstances of this case do not merit an award of attorney's fees. -9- Ohio cases have awarded attorney's fees in insured/insurer litigation where the policy specifically includes coverage for those fees as in Willoughby Hills, supra; where the insurer has acted with bad faith and initiated the litigation as in Brandenburg, supra; and where punitive damages are awarded against the insurer as in Hoskins, supra. This case is distinguished from the above cases as Commonwealth did not act in bad faith by denying Hilliard's claim, it did not initiate the litigation, and no punitive damages were sought or awarded. Accordingly, appellant is not entitled to attorney's fees in this action. Appellant's remaining assignments of error are rendered moot by our disposition of this case and are contained in the Appendix. See App.R. 12(A)(1)(c). This cause is reversed and judgment is entered for appellant in the amount of $23,723.45 plus statutory interest in the amount of 10% from September 8, 1994 through the date of this judgment. It is, therefore, considered that said appellant recover of said appellee its costs herein. It is ordered that a special mandate be sent to said court to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. O'DONNELL, J., and __________________________________ JOSEPH J. NAHRA ROCCO, J., CONCUR. PRESIDING JUDGE N.B. This entry is an announcement of the court's decision. See App.R. 22(B), 22(D) and 26(A); Loc.App.R. 27. This decision will be journalized and will become the judgment and order of the court pursuant to App.R.22(E) unless a motion for reconsideration with supporting brief, per App.R. 26(A), is filed within ten (10) days of the announcement of the court's decision. The time period for review by the Supreme Court of Ohio shall begin to run upon the journalization of this court's announcement of decision by the clerk per App.R. 22(E). See, also, S.Ct.Prac.R. II, Section 2(A)(1). APPENDIX Appellant's remaining assignments of error rendered moot by our opinion read: I. THE TRIAL COURT'S FINDING OF FACT 4, -11- The commitment specifically stated special assessments were excepted from the policy. This means defendant is not insuring against special assessments on the property IS IN ERROR INASMUCH AS THAT IS NOT WHAT THE COMMITMENT SAYS, AND THE CONCLUSION DRAWN THEREFROM IN THE SECOND SENTENCE OF THE FINDING IS CONTRARY BOTH TO THE COMMITMENT AND LAW. II. THE TRIAL COURT'S FINDING OF FACT 7, SECOND SENTENCE, The policy further states that the insured must notify the defendant prior to paying any claim IS IN ERROR INASMUCH AS THE POLICY DOES NOT CONTAIN SUCH LANGUAGE. V. THE TRIAL COURT'S CONCLUSION OF LAW 2, THIRD SENTENCE, It is uncontroverted that plaintiff did not give written notice to defendant prior to paying the special assessment. This prejudiced defendant's right to defend, negotiate, settle, avoid or otherwise compromise the assessment. IS A FACT STATEMENT WHICH IS CONTRARY TO THE MANIFEST WEIGHT OF THE EVIDENCE AND IN ANY EVENT DOES NOT ENTITLE .