What is a slander of title action? (Hill v. Allan (1968) 259 Cal.App.2d 470.)

Underwood-Blog-Images-300x300Slander of title is quite the unique cause of action. As the name implies, it involves defamatory or slanderous activity but not against any person or personal interest. Instead, a slander of title involves activity that calls the state of your title into doubt (by, for example, filing an unwarranted lis pendens) that diminishes the value of your property. 

In these situations, parties have the ability to sue for slander of title. The suit is usually accompanied by an action to clear a cloud on the title or to quiet the title, but the gist of it is quite simple: compensation for the injurious activity to the state of one’s title. 

What’s Required for a Slander of Title Claim? 

Slander of title, much like ordinary slander, requires some third party to publish a false statement that disparages the title to the owner’s property. While the word “publish” might ordinarily mean the statement is published in a formal newspaper or something similar, for the purposes of the law on this subject, it merely means it was communicated to a third party. 

But just because someone lies about another property owner’s title does not mean that the homeowner can turn around and sue them. Instead, slander of title’s essential element is that the disparaged homeowner actually suffered “pecuniary loss.” (Sumner Hills Homeowner’s Assn., Inc. (2012) 205 Cal.App.4th 999, 1030.) This is because slander of title is a cause of action designed to compensate a homeowner when a third party’s false statements lower a homeowner’s property value. (Hill v. Allan (1968) 259 Cal.App.2d 470, 489.) 

Lastly, because slander of title is a tort, there must be a causal connection between the third party’s publication of false statements and the reduction in a property’s value as a result. In other words, a third party may speak negatively concerning the title to one’s property, and that same property may decrease in value shortly thereafter. 

Unless the homeowner can show, however, that the false comments were the reason the property’s value dipped, there will be no liability despite the third party’s actual disparagement. 

How do I Start a Slander of Title Suit? 

Because slander of title is such a unique action, there are multiple considerations that potential litigants need to keep in mind. Perhaps the most important of these is that the statute of limitations is only three years. (CCP § 338.) 

Assuming, however, that the statute of limitations poses no issues, there’s another issue to consider: ownership interests. As with other suits related to real property (partition, quiet title, etc.), the plaintiff in a slander of title lawsuit needs an ownership interest in the property to bring the lawsuit. (Chao Fu, Inc. v. Chen (2012) 206 Cal.App.4th 48, 58.) Absent this present interest, slander of title is unavailable as a matter of law. 

Slander of Title and Previous Lawsuits 

A large chunk of lawsuits regarding slander of title is devoted to a somewhat complicated field of the law called the “litigation privilege.” (Civ. Code § 47.) While it can be quite difficult to understand fully, the gist of this privilege in California is that things said in lawsuits cannot thereafter be used as the basis of a separate lawsuit. 

As it relates to the slander of title, the litigation privilege sees much discussion when parties file a lis pendens. A lis pendens is, in essence, a litigation lien. It is placed by one party (typically the plaintiff) on the subject property of a lawsuit so that any banks or buyers know that the property is currently the subject of pending litigation. It provides formal notice to the general public of a lawsuit relating to the property. 

Suppose, then, that one party (“James”) brings a partition suit against “Julie,” who is the owner of the record for a house. James is asserting that he owns a portion of Julie’s home based on a legitimate but difficult to prove a legal theory. At the start of the lawsuit, he files a lis pendens on the home. 

After years of litigation and appeals, it turns out, however, that James lost in spite of his best efforts. Julie, perhaps understandably so, is quite upset that James wasted her time and money on an iffy property claim, to begin with. Moreover, the presence of the lis pendens meant she couldn’t sell her home when she had desired. Now, with the housing market in a bad state, Julie’s property value has greatly diminished. 

If Julie filed a slander of title action, in all likelihood, it would be thrown out due to the litigation privilege. (see Albertson v. Raboff (1956) 46 Cal.2d 375.) But this is mainly because James’ legal theory was somewhat untenable. If, however, a plaintiff is merely looking for an unearned settlement and knows that their case is completely and totally meritless when filing the lis pendens, that is because of unprivileged activity. Nevertheless, this is quite rare. 

Can you recover attorney’s fees for slander of title actions? 

Yes. In fact, attorney’s fees are a large part of slander of title litigation. This is because the “pecuniary damage” requirement comes in two forms. On the one hand, the slanderous activity can literally lower the market value of the subject property. 

On the other, though, the slanderous activity forces the plaintiff to go into court (usually with a lawyer) to remove the doubt case by the defendant’s disparagement and to clear the title. California courts recognize this activity (going into court) as another form of pecuniary damage. (Seeley v. Seymour (1987) 190 Cal.App.3d 844, 865.) After all, without the defendant’s slander, the plaintiff would never have had to hire a lawyer and go into the courtroom, to begin with. 

Thus, even if a plaintiff cannot prove the first type of pecuniary harm, they are still able to recover those costs and fees as a result of having to go into court. 

How can the Attorneys at Underwood Law Assist You? 

Slander of title suits is unique because they almost always involve some prior litigation that results in slanderous activity. Getting around the litigation privilege can be especially difficult, even if the other party’s activity did indeed lower your property value. 

As each case is unique, property owners would be well-served to seek experienced counsel familiar with the intricacies of lawsuits relating to title and their accompanying procedure. At Underwood Law Firm, our knowledgeable attorneys are here to help. If you are wondering if slander of title is a suit available to you, attempting to fight another party’s filing of a lis pendens, or if you just have questions, please do not hesitate to contact our office

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