Joseph F. Stiley, III v. Edward T. Block, .

Summary

The Washington Supreme Court reversed in part and affirmed in part, reinstating a jury verdict of $85,000 (total judgment of $168,292.55 with prejudgment interest, fees and costs) against attorney Edward Block, who served as escrow agent for Joseph Stiley's loan to Webbco and substituted a deed of trust reducing Stiley's security from 92 lots to 7 without notice. The court held the trial court properly instructed the jury on Block's fiduciary and attorney-escrow-agent duties, properly refused a contributory negligence instruction for lack of substantial evidence, and that the independent business judgment defense did not bar recovery because Block's own failure to record the promised deed of trust destroyed the very remedies Stiley allegedly chose not to pursue. It affirmed the Court of Appeals' conclusions that the fraud evidence was insufficient because Block's letter promised future performance rather than misstating an existing fact, and that impeachment implying Block committed perjury under RCW 5.28.060 was erroneous, but reversed the holding that the error was unduly prejudicial and sustained the judgment on the jury's breach-of-contract finding that Block violated the May 25, 1984 escrow instructions letter. Talmadge, J., concurring, joined by Durham, C.J., and Guy and Johnson, JJ., disagreed with the majority's fraud discussion, contending fraud may be proved by nondisclosure of material facts when a duty to speak exists.