Daily Development for Thursday, April 6, 1995

By: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
prandolph@cctr.umkc.edu

LIS PENDENS; SLANDER OF TITLE: Notices of lis pendens carry the same absolute privilege as pleadings in a lawsuit. (Two cases.) Scott-Kinnear, Inc. v. Eberly & Meade, Inc., 879 P.2d 838 (Okla. App. 1994) and Morford v. Eberly & Meade, Inc., 879 P.2d 841 (Okla. App. 1994) The court ruled that a Notice of Pending Action giving notice of a lawsuit that raised "various issues affecting title" to certain real estate and otherwise fairly stating the issues of the lawsuit to which is related had the same absolute privilege as pleadings in litigation. Further, apparently as an alternative holding, it affirmed the trial court's finding that slander of title had not been proven because there was no malice.

The court indicates that the party suffering from a malicious but privileged lis pendens filing has the remedy of going to court and having the filing removed. Further, the party can obtain sanctions in the subject lawsuit if it has been frivolously filed.

The court states that the purpose of lis pendens is to protect potential buyers of property subject to litigation, and therefore the device deserves some protection from liability claims.

Comment: The sanctions remedy is not nearly as severe as the remedy traditionally availble for slander of title, which most states regard as a particularly injurious tort. Thus, removing the possibility of a slander of title claim considerably assists persons interested in using lis pendens to cloud title based upon some barely colorable claim in order to prevent transfer and thus force settlement of some dispute with the owner, whether or not directly related to the property. The court's response to this is that lis pendens devices are intended to protect potential buyers of property subject to a litigation, and thus should be encouraged.

The court's argument is not based upon modern realities. It is true that the original common law made sellers subject to the consequences of a lawsuit pertaining to that property whether or not they knew or could learn of the lawsuit. A lis pendens filing in such a legal environment would protect the buyers. But modernly the approach has been to force claimants to file their claims in the public records or lose them to a BFP. If this is the overall policy of the law, then the lis pendens device is beneficial to claimants, as it gives them the opportunity to preserve their claim, and harmful to buyers, as it creates one more constructive notice risk for them. The case is just another example (there are legion) of why society (and the bar) should pay more attention to getting transactions-oriented lawyers on appellate court benches to advise all the former trial lawyers with tort and criminal law backgrounds who form the bulk of the judiciary these days.

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