Elements of a Slander of Title Claim

In California, a cause of action for slander to title can be successful if there is sufficient proof of the essential elements of publication, falsity, absence of privilege, and disparagement of another's land that is relied upon by a third party, and which results in a pecuniary loss. 

Publication and falsity may be established if the defendant signs a false grant deed or quitclaim deed that places a cloud on plaintiff's title to the real property, and thereby disparages plaintiff's title.  Even an invalid document is sufficient to create a "cloud on title" and may give rise to an actionable tort.  A publication of no real legal consequence or one that creates no interest in the property may be a basis for a slander of title action if a third party might reasonably understand it as an announcement that a defendant was claiming an interest in the property.

For slander of title purposes, malice may be actual or implied, and will be implied when the circumstances are deemed in law to show a lack of privilege or good faith.  A defendant can argue that good faith reliance on the advice of counsel is a defense, if such legal advice was provided after full disclosure of all of the relevant facts. However, if the defendant had no interest in the real property at the time he signs the deed, it may be deemed the defendant acted maliciously and without privilege in issuing the deed.

A slander of title plaintiff need only show title or interest in the property, and even a leasehold interest is sufficient to assert slander of title.  An adverse possession title alone is not enough to support a slander of title tort, and because it is not marketable until the title is established by judicial proceedings against the record owner.  A plaintiff does not have to have a 100 percent marketable title in order to maintain a slander of title action.

The weight of California authority makes it clear that the owner can recover damages without proving that he or she lost a prospective lender, purchaser, or lessee as a result of the disparagement.  The question is whether it is reasonably foreseeable a purchaser or lessee would alter his or her conduct based on the disparagement. 

Nor is the absence of evidence of actual depreciation or pecuniary  loss resulting from the impairment of vendibility fatal to the cause of action.  A slander of title plaintiff's damages may include (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.  A plaintiff does not have to show specific harm to vendibility, such as proof of a lost sale or diminished value, and in cases where title was disparaged in a recorded instrument, attorney fees and costs necessary to clear title or remove the doubt cast on it by defendant's falsehood are, by themselves, sufficient pecuniary damages for purposes of a slander of title cause of action.

The tort of another doctrine may be applied to slander of title cases to award attorney fees incurred to clear title to real property, and one case allowed attorney fees by analogizing slander of title to a malicious prosecution action.

However, the recoverable fees are for the legal efforts to clear the title and remove the disparagement (e.g., a quiet title action), and not for those incurred to prove the slander of title cause of action. Fees incurred merely in pursuit of damages against the defendant, or in negotiations with third parties over a sale or lease of the property, are not recoverable.

Lessons:     

1.      Avoid executing or recording a false deed or other document that creates a cloud on the title to real property claimed by another.

2.      Consultation with an attorney, and reliance on the attorney's advice after full disclosure, may constitute a viable defense, especially if the complexity of the legal issues is significant.