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Click here for the full text of this decision FACTS:Chicago Title Insurance Co. acted as the settlement agent in the closing of a residential real estate mortgage loan funded by Home Loan Corp. After Home Loan assigned the note and the borrower made no payments on it, Home Loan was obligated to repurchase the note and suffered a loss on its eventual sale of the property after foreclosure. Home Loan filed suit against Chicago Title, alleging fraud and breach of fiduciary duty based on Chicago Title’s failure to disclose on the HUD-1 closing settlement statement that half of the seller’s proceeds would be paid at the seller’s request to Gerald Malone, a third party. After trial, the trial court entered judgment in accordance with the jury’s verdict, which found liability for fraud and breach of fiduciary duty and awarded Home Loan compensatory and exemplary damages of $140,606.23 and $100,000, respectively. Chicago Title appealed. HOLDING:Affirmed as modified. Chicago Title’s first issue challenged the legal sufficiency of the evidence that sought to prove Chicago Title acted with the requisite intent to defraud Home Loan. Chicago Title contended that no evidence supported a finding that its omission of the payment to Malone from the HUD-1 was made with any intent to induce Home Loan in any manner. Home Loan countered that the evidence supporting the finding of intent to induce included that: 1. Chicago Title’s closing officer, Ginny Rogers, understood that Home Loan required the completed HUD-1 be faxed to them as a condition of funding the loan and that Home Loan would rely on the HUD-1 being accurate; 2. Home Loan’s Vice President, Terry Likens, testified that it is the normal course for Home Loan to rely on title companies as settlement agents to disburse funds; and 3. Chicago Title’s expert, Charles Jacobus, testified that the addendum to the HUD-1 is a standard closing document used in hundreds of transactions upon which the lender relies in funding loans. After reviewing the entire record, the court found no evidence that, at any time before Home Loan funded the loan, anyone at Chicago Title: 1. knew or suspected that the requested disbursement to Malone was in any way out of the ordinary, let alone indicative of wrongdoing; or 2. considered the disclosure of such a disbursement on the HUD-1 even to be an option, let alone an obligation. Thus, the court could find no evidence that Chicago Title’s failure to disclose the disbursement to Malone on the HUD-1 was deliberate or made with any intent to conceal that fact or to otherwise deceive or induce Home Loan to fund the loan under false pretenses. Chicago Title then challenged the sufficiency of the evidence to prove fraud by clear and convincing evidence, necessary to support the trial court’s award of exemplary damages. The trial court found legally insufficient evidence to support a finding of fraud under a clear and convincing standard. Because the claim for exemplary damages was submitted in the jury charge only with regard to the tort claim for fraud and not breach of fiduciary duty, the court stated that the reversal of the award of actual damages for fraud also dictated a reversal of the award of exemplary damages. The court let stand the award of damages for breach of fiduciary duty. OPINION:Edelman, J.; Fowler and Edelman, JJ. CONCURRENCE:Guzman, J., concurred without a written opinion.

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