## Facts

- Walter E. and Violet Williams purchased real property in Warren, Michigan from Julia Polgar by land contract dated August 1, 1959.
- The seller furnished an abstract of title certified as of July 15, 1959, which had been originated and extended by an abstract company whose successor was American Title Insurance Company.
- The abstract omitted a recorded 1926 deed conveying the southerly 60 feet of the property to the Macomb County Board of Road Commissioners.
- The Williamses alleged they discovered the omitted deed only after the transaction and suffered damages, including being required to remove a building.
- The Williamses sued Polgar for breach related to the conveyance and sued American Title for negligent preparation of the abstract (negligent misrepresentation).
- The action was filed April 21, 1971.

## Issues

1. Whether an abstracter may be liable in tort for negligent misrepresentation to a foreseeable purchaser who relies on the abstract, despite lack of contractual privity.
2. When a negligent misrepresentation claim against an abstracter accrues for statute of limitations purposes: at the negligent act, at the purchase transaction, or upon discovery (actual or constructive) of the error and resulting injury.

## Decision

- The Michigan Supreme Court affirmed the Court of Appeals’ reversal of accelerated judgment and remanded.
- The court held an abstracter’s tort duty extends to persons the abstracter should reasonably foresee will rely on the abstract, not only those known to the abstracter.
- The court held the limitations period begins when the plaintiff knew or reasonably should have known of the negligent misrepresentation and resulting injury, not automatically on the date of the land contract or the abstract’s preparation.

## Legal Principles

- A title abstracter who negligently prepares or extends an abstract may be liable for negligent misrepresentation to foreseeable third-party users who rely on the abstract, even without privity.
- Foreseeability of reliance can supply the duty element in negligent misrepresentation claims involving professional services intended for use beyond the immediate contracting party.
- A negligent misrepresentation cause of action accrues when the plaintiff discovers, or in reasonable diligence should discover, both the misrepresentation and the resulting injury.
- Dismissal on limitations grounds is improper where timeliness depends on factual questions about when the plaintiff should have discovered the defect and damages.

## Conclusion

The court permitted the purchasers’ negligent misrepresentation claim against the abstracter to proceed, holding that an abstracter’s duty of care runs to foreseeable relying purchasers and that the statute of limitations accrues upon discovery (actual or constructive) of the misrepresentation and injury.


Williams v. Polgar, 391 Mich. 6, 214 N.W.2d 149 (Mich. 1974)