In Bloom v. Beam (D.C.C.A. Nos. 13-CV-433 & 13-CV-484) the D.C. Court of Appeals held that a memorandum of lis pendens may not constitute slander of title, even if the underlying law suit fails, but that the trial court could assess attorneys fees under D.C. Code 42-1207(d)(1).
A law suit was filed by a downstairs condominium owner, complaining that the upstairs neighbor had installed hardwood floors, creating a noise problem. The theory of the case was the new flooring granted the downstairs neighbor an equitable interest in the upper unit to allow him access to the unit to repair defective installation. A memorandum of lis pendens was filed which stated that the “action affects title and interest [in the upper unit]… and to obtain an [o]rder imposing a constructive trust on the [upper unit].”
The lis pendens caused a pending sale of the upper unit to fall apart and the property could not be sold until the lis pendens was eventually released.
The jury found against the downstairs neighbor’s nuisance claim and awarded the upstairs neighbor $99,738 in damages against the downstairs neighbor and the court imposed a sanction of $32,775 under D.C. Code 42-1207(d)(1) which provides “When appropriate, the court [ ] may impose sanctions for the filing [of an improper lis pendens]”.
The upstairs neighbor failed to preserve his right to claim that the filing of the lis pendens was absolutely privileged and could not form the basis for a slander of title claim. He had failed to raise the privilege in his Rule 50(a) motion for directed verdict.
The Court of Appeals examined the elements of a claim for slander of title:
- a communication relating to the title of property was false and malicious;
- damages resulted from the publication of the statement
- if special damages are sought, the underlying damages must be pled with specificity.
In the instant case, the element of falsity was not met. The trial court had found that “the underlying claim for relief … provides no basis for any interest in the [upper unit” and that the jury could rely upon this lack of basis to find that the lis pendens was false. Not so, says the Court of Appeals. “The lis pendens in this case cannot be characterized as false because it merely recites the fact that Bloom filed a law suit in which he alleged an interest in [the upper unit]; it did not assert that a noise nuisance was legally sufficient to establish a constructive easement….. This statement of fact in the lis pendens, regardless of the outcome of the suit, is not false.”
The attorneys fee award was upheld. The elements of D.C. Code 42-1207(d)(1) were equated with Super Ct. iv R. 11 standards wherein the court should assess:
- whether the filing was for an improper purpose
- unwarranted by existing law or a frivolous argument for the extension, modification, or reversal of existing law, or was without evidentiary support.
A trial court need not make a finding of bad faith in order to exercise its discretion in imposing sanctions and even a claim of privilege would not impede the court from imposing sanctions.