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JOSEPH J. LOEFFLER AND MARGARET A. LOEFFLER v. EDWARD J. MCSHANE AND ROSEMARY MCSHANE (03/31/88)

filed: March 31, 1988.

JOSEPH J. LOEFFLER AND MARGARET A. LOEFFLER
v.
EDWARD J. MCSHANE AND ROSEMARY MCSHANE, H/W AND EASTERN ABSTRACT, INC. AND FIRST AMERICAN TITLE INSURANCE COMPANY AND CHARLES J. ZONE AND ERMA MOORE AND STEPHEN MCSHANE AND FREIDA MCSHANE, CO-PARTNERS T/A MCSHANE REALTY. APPEAL OF CHARLES J. ZONE



Appeal from the Order Entered April 20, 1987 in the Court of Common Pleas of Bucks County, Civil, No. 83-04038.

COUNSEL

Joseph P. Caracappa, Fairless Hills, for appellant.

William T. Renz, Doylestown, for Loeffler, appellees.

Cavanaugh, Beck, and Hester, JJ.

Author: Beck

[ 372 Pa. Super. Page 443]

This is an appeal by Charles J. Zone, the principal corporate officer and part owner of Eastern Abstract, Inc., a title insurance company. The issue is whether a corporate officer who supervises a settlement on the refinancing of a mortgage may be held personally liable for the loss suffered by the mortgagors when he negligently authorized the payment of the mortgagors' settlement funds to the wrong party. The Court of Common Pleas of Bucks County determined that appellant Zone was liable in his individual capacity to the mortgagors, Edward and Rosemary McShane. We affirm the order of the trial court.

The facts of this case are not in dispute. We incorporate the following statement of facts which appeared in the excellent opinion of Judge George T. Kelton.

[ 372 Pa. Super. Page 444]

This action of mortgage foreclosure was filed after a series of events in which original defendants and mortgagors, Edward and Rosemary McShane, sought to refinance a mortgage on a property owned by them and located at 1538 Super Highway, Middletown Township, Bucks County, Pennsylvania. The original plaintiffs in this action were Joseph and Margaret Loeffler, holders of the first mortgage on the property. Joseph Loeffler has died since the commencement of this lawsuit, and his interest in the litigation has passed to his widow, Margaret Loeffler.

Intending to refinance the Loeffler mortgage, Mr. and Mrs. McShane decided to borrow $61,500.00 from Heritage Bond and Mortgage Company. These funds were to be used in part to satisfy the McShane's mortgage to the Loefflers. The amount due thereon was approximately $49,900.00.

The McShanes requested additional defendant, Eastern Abstract, Inc., an agency of additional defendant, First American Title Insurance Company, to provide title insurance. The title insurance was to be issued with First American as the insurer and the settlement to be conducted by First American's agent, Eastern Abstract. Settlement was held on January 19, 1979 at the offices of Eastern Abstract.

At settlement, Eastern Abstract did not secure a payoff statement from the mortgagee-plaintiffs, the Loefflers; instead, it secured a statement from the defendant, Edward McShane, one of the mortgagors. Then, when the proceeds of settlement were distributed by Eastern Abstract, the check to pay off the original Loeffler mortgage, instead of being made payable to the Loefflers, was made payable to "McShane Realty, agent for Joseph and Margaret A. Loeffler."

McShane Realty was a partnership consisting of additional defendants Stephen McShane and Frieda McShane (Edward's brother and mother respectively). The settlement ...


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