Slander of Title Law Definition Elements Defense

Definition

Slander of title is an unprivileged or malicious publication of a false statement that disparages plaintiff’s title to real property and causes pecuniary loss. (Sumner Hill Homeowners’ Assn., Inc. v. Rio Mesa Holdings, LLC (2012) 205 Cal.App.4th 999, 1030.) The thrust of the tort of disparagement or slander of title is protection from injury to the salability of property. (Sumner Hill Homeowners’ Assn., Inc. v. Rio Mesa Holdings, LLC (2012) 205 Cal.App.4th 999, 1029.) Slander of title is not a form of deceit; it is a form of the separate common law tort of disparagement, also sometimes referred to as injurious falsehood. (Finch Aerospace Corp. v. City of San Diego (2017) 8 Cal.App.5th 1248, 1253.) In the context of real estate disputes, slander of title is recognized as a malicious action where an individual falsely disparages another’s property title, thereby causing financial harm as delineated in Sumner Hill Homeowners’ Assn., Inc. v. Rio Mesa Holdings, LLC.

To establish slander of title, a plaintiff must show: “(1) a publication, (2) which is without privilege or justification, (3) which is false, and (4) which causes direct and immediate pecuniary loss.” (Manhattan Loft, LLC v. Mercury Liquors, Inc. (2009) 173 Cal.App.4th 1040, 1051; CACI No. 1730.) A critical aspect of establishing slander of title, as outlined in Manhattan Loft, LLC v. Mercury Liquors, Inc., involves proving the publication of a false statement that directly leads to pecuniary damage without any justification or privilege.

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Element 1: Publication

The publication may be by spoken or written means. (Alpha & Omega Development, LP v. Whillock Contracting, Inc. (2011) 200 Cal.App.4th 656, 661.) The publication must be false, either knowingly so or made without regard to its truthfulness. (Howard v. Schaniel (1980) 113 Cal.App.3d 256, 264.) The requirement of publication in a slander of title claim encompasses both oral and written dissemination of falsehoods about property titles, emphasizing the necessity for the statement to be knowingly false or recklessly disregarded for its truth, as highlighted in Howard v. Schaniel.

The Supreme Court has recently determined a viable disparagement claim, which necessarily includes a slander of title claim, requires the existence of a “misleading statement that (1) specifically refers to the plaintiff’s product or business and (2) clearly derogates that product or business. Each requirement must be satisfied by express mention or by clear implication.” (Finch Aerospace Corp. v. City of San Diego (2017) 8 Cal.App.5th 1248, 1253.) Unlike deceit, slander of title stands as a distinct common law tort aimed at safeguarding property’s marketability by preventing injurious falsehoods, as explained in the Finch Aerospace Corp. v. City of San Diego case.

Finch Aerospace Corp. v. City of San Diego further clarifies that a viable disparagement claim, incorporating slander of title, necessitates a misleading statement specifically derogating the plaintiff’s property, thereby setting a high bar for establishing such a claim.

Element  2: Unprivileged or Malicious

The existence of privilege is a defense to an action for defamation. Therefore, the burden is on the defendant to plead and prove the challenged publication was made under circumstances that conferred the privilege. (Palmer v. Zaklama (2003) 109 Cal.App.4th 1367, 1380 [applying rule to slander of title].) The concept of privilege plays a defensive role in slander of title cases, where the onus lies on the defendant to prove the publication’s privileged nature, a principle applied in slander of title through Palmer v. Zaklama.

A qualified or conditional privilege is not available as a defense if the plaintiff can show malice. (Smith v. Commonwealth Land Title Ins. Co. (1986) 177 Cal.App.3d 625, 631.) A conditional privilege can be overridden by demonstrating malice, reinforcing the stringent criteria required to defend against slander of title allegations, as seen in Smith v. Commonwealth Land Title Ins. Co.

Under proper circumstances actual malice may indicate a lack of privilege and absence of privilege may imply malice. (Gudger v. Manton (1943) 21 Cal.2d 537, 543, disapproved on other grounds, Albertson v. Raboff (1956) 46 Cal.2d 375.) The notion that actual malice can denote a lack of privilege in slander of title cases introduces a nuanced understanding of malice’s role, as discussed in Gudger v. Manton.

A recorded lis pendens is not a privileged publication unless it identifies an action previously filed with a court of competent jurisdiction that affects the title or right of possession of real property. (Cal. Civ. Code, § 47 subd. (b)(4).)

Publication of an assessment lien by a condominium homeowners’ association was absolutely privileged regardless of whether the lien was enforced by judicial foreclosure or private sale, and whether the publication was intentional and malicious. (Wilton v. Mountain Wood Homeowners’ Ass’n (1993) 18 Cal.App.4th 565, 570.)

Actual malice or ill will is unnecessary; implied malice is all that is required. (Phillips v. Glazer (1994) 94 Cal.App.2d 673, 677; Contra Costa County Title Co. v. Waloff (1960) 184 Cal.App.2d 59, 67 [accusations made without foundation are indicative of malice].)

Element 3: False

Slander of title occurs when a person, without a privilege to do so, publishes a false statement that disparages title to property and causes pecuniary loss. The false statement must be “maliciously made with the intent to defame.” (Cyr v. McGovran (2012) 206 Cal.App.4th 645, 651.) The falsity of the disparaging statement, a cornerstone of slander of title, requires a malicious intent to defame, focusing on the damaging impact of untruthful claims about property titles, as elucidated in Cyr v. McGovran.

“One who publishes a false statement harmful to the interests of another is subject to liability for pecuniary loss resulting to the other if (a) he intends for publication of the statement to result in harm to interests of the other having a pecuniary value, or either recognizes or should recognize that it is likely to do so, and (b) he knows that the statement is false or acts in reckless disregard of its truth or falsity.” (Appel v. Burman (1984) 159 Cal.App.3d 1209, 1214.)

“One who, without a privilege to do so, publishes matter which is untrue and disparaging to another’s property in land, chattels or intangible things under such circumstances as would lead a reasonable man to foresee that the conduct of a third person as purchaser or lessee thereof might be determined thereby is liable for pecuniary loss resulting to the other from the impairment of vendibility thus caused.” (Chrysler Credit Corp. v. Ostly (1974) 42 Cal.App.3d 663, 674.)

Element  4: Caused Pecuniary Damage

The plaintiff must show that he or she suffered pecuniary damage as a result of the publication. (Wilton v. Mountain Wood Homeowners Ass’n (1993)18 Cal.App.4th 565, 568.)

The damages are the loss caused by the impairment of vendibility and the cost of clearing the title. (Davis v. Wood (1943) 61 Cal.App.2d 788, 798.)

Pecuniary loss may be established by proof of the conduct of specific persons or proof that the loss has resulted from the conduct of a number of persons whom it is impossible to identify. (Appel v. Burman (1984) 159 Cal.App.3d 1209, 1215.)

A leasehold interest’s depreciation in value that rendered it unmarketable and caused $10,000 in damage was sufficient damage. (Davis v. Wood (1943) 61 Cal.App.2d 788, 798 [statement of damages withstood general demurrer].) The pecuniary loss resultant from slander of title not only encompasses the immediate financial damages but also the broader impact on property vendibility, stressing the tort’s economic repercussions as outlined in Davis v. Wood.

A court dismissed plaintiff’s damages claim for the loss of a half interest in property because plaintiff failed to allege facts showing that the loss resulted from any act of defendant. (Southcott v. Pioneer Title Co. (1962) 203 Cal.App.2d 673, 677.)

        Foreseeable Effect on Third Persons

The key to determining whether a defendant’s conduct is actionable is not whether he or she succeeded in casting a legal cloud on the plaintiff’s title, but whether the defendant could reasonably foresee that the statement could determine the conduct of a third person as purchaser or lessee of the property. (Seeley v. Seymour (1987) 190 Cal.App.3d 844, 858-59.) The foreseeability of a disparaging statement’s impact on third-party actions underlines the broader societal implications of slander of title, focusing on its potential to alter property transactions, as noted in Seeley v. Seymour.

The gravaman of a cause of action for slander of title is the reasonably foreseeable effect on prospective purchasers or lessees, not the strictly legal effect on the title of a recorded instrument. (Seeley v. Seymour (1987) 190 Cal.App.3d 844, 859.)

A property owner may recover for the impairment of saleability without showing that the defendant’s conduct had prevented a particular sale. The plaintiff need only show that it was foreseeable that the defendant’s conduct could or would prevent some sales. (See, e.g., Glass v. Gulf Oil Corp. (1970) 12 Cal.App.3d 412, 424 [plaintiffs were not required to establish that any particular prospective purchaser or lessee was deterred from negotiating or contracting with plaintiffs because he or she received false information disseminated by defendants].)

Remedies

In an action for wrongful disparagement of title, a plaintiff may recover (1) the expense of legal proceedings necessary to remove the doubt cast by the disparagement, (2) financial loss resulting from the impairment of vendibility of the property, and (3) general damages for the time and inconvenience suffered by plaintiff in removing the doubt cast upon his property. (Klem v. Access Ins. Co. (2017) 17 Cal.App.5th 595, 624.) Remedies for slander of title extend beyond direct financial compensation, including legal expenses and general damages for the aggrieved party’s inconvenience in rectifying the disparagement, as indicated in Klem v. Access Ins. Co.

Compensatory Damages

Plaintiff entitled to damages for financial loss resulting from impairment of vendibility of property and entitled to recover for the time and inconvenience suffered in removing the doubt cast upon his property. (See Seeley v. Seymour (1987) 190 Cal.App.3d 844, 865.)

Punitive Damages

Punitive damages available in slander of title actions. (See Cal. Civ. Code § 3294, subd. (a); Seeley v. Seymour (1987) 190 Cal.App.3d 844, 865 [$2.6 million punitive damage award in consolidated actions for slander of title, quiet title, and negligence may have been excessive].) The availability of punitive damages in slander of title actions underscores the legal system’s stance on deterring malicious disparagement, offering a mechanism for penalizing egregious conduct, as discussed in Seeley v. Seymour.

Costs

Plaintiff may recover expense of legal proceedings necessary to remove doubt cast by disparagement. (Seeley v. Seymour (1987) 190 Cal.App.3d 844, 865.)

Statute of Limitations

The statute of limitations is three years. (Cal. Civ. Proc. Code § 338, subd. (g).) The statute of limitations for slander of title claims, set at three years, provides a temporal framework within which aggrieved parties must initiate legal action, highlighting the importance of timely redress for property title disparagement.

Affirmative Defenses

Privilege

The existence of privilege is a defense to an action for defamation. Therefore, the burden is on the defendant to plead and prove the challenged publication was made under circumstances that conferred the privilege. (Palmer v. Zaklama (2003) 109 Cal.App.4th 1367, 1380 [applying rule to slander of title].) The delineation of absolute and qualified privileges in defending against slander of title claims presents a nuanced legal landscape, where the nature of the publication and the presence of malice play crucial roles in determining liability, as observed in various case laws such as Palmer v. Zaklama and Gudger v. Manton.

Absolute Privilege

Absolute privilege applies. (See, e.g., Cal. Civ. Code § 47, subd. (b) [publications in legislative, judicial, or other official proceedings]; Ojavan Investors Inc. v. California Coastal Comm’n (1994) 26 Cal.App.4th 516, 528-29 [cease and desist order issued by California Coastal Commission was privileged under Civil Code § 47(b) as publication made in quasi-judicial proceeding].)

Qualified Privilege

Some qualified privileges apply. (See, e.g., Cal. Civ. Code § 47, subd. (c) [non-malicious communications between interested persons including job performance evaluations]; Gudger v. Manton (1943) 21 Cal.2d 537, 545 [rival claimant has conditional privilege to disparage another’s title by an honest and good faith assertion of an inconsistent legally protected interest in himself or herself), disapproved on other grounds, Albertson v. Raboff (1956) 46 Cal.2d 375].)