DD 2/22/10 Attorneys fees in clearing slander of title.

Daily Development for Monday, February 22, 2010
by: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Husch Blackwell Sanders
Kansas City, Missouri
dirt@umkc.edu

SLANDER OF TITLE; ATTORNEYS' FEES: Attorney's fees and other legal expenses incurred in clearing a disparaged title are recoverable as special damages in slander of title actions (first impression in Missouri).

Lau v. Pugh, 299 S.W.3d 740 (Mo. Ct. App. 2009).

Pughs and Laus were neighboring landowners. The Pughs and Laus were friendly toward each other until approximately May 2006, when the Laus hired Wayne Davis to cut down trees for the purpose of selling the trunks. Davis cut down the trees and placed the remaining leaves and limbs into an existing brush pile located near the boundary line. Prior to that point, the Pughs and Laus had not established the exact location on the boundary line, but had agreed not to damage the property in that area. After Mrs. Lau informed Mrs. Pugh that the brush pile may not be located on the Pughs' property, the Pughs demanded that the Laus move the pile. The parties met at the brush pile in June 2006 and had a heated dispute regarding the pile and boundary line. The Laus eventually hired Wetstein to move the brush pile to their property and place a line of logs along what they believed to be the boundary line.

Disagreements about the boundary continued until Laus had a survey done, showing that they had misunderstood the boundary some during the earlieer dispute.

Pughs then fired another salvo - an invoice and mechanic’s lien claim for work in removing three trees on Laus’ land prior to any other of the above difficulties.  Laus claimed that this work, at the time, was simple “neighborly accomodation” and that there had been no discussion or expectation of remuneration. 

Laus filed a petition against the Pughs, requesting a declaratory judgment that the Pughs' purported mechanics lien was invalid and asserting an action for slander of title against the Pughs for "maliciously" and "without justification" filing the mechanics lien. The trial court held in favor of the Laus on both counts and ordered the Pughs to pay the Laus $1,814.67 plus court costs. The Pughs appealed, advancing arguments on several issues.

On appeal, the relevant issue of first impression addressed by the Missouri Court of Appeals was "whether attorney's fees incurred in a slander of title action are recoverable as damages." The court began its analysis by setting forth the following requirements plaintiffs must meet in order to establish a claim for slander of title in Missouri: (1) that the plaintiff has an interest in the property; (2) that words were published which were false; (3) that such words were maliciously published; and (4) that the plaintiff suffered pecuniary loss or injury as a result of the false statement. The court also noted that Missouri recognizes a claim for "injurious falsehood" if the plaintiff establishes proof of pecuniary loss as an element of its damage claim.

After discussing damages available in "injurious falsehood" cases, the court addressed the specific issue in the case by highlighting the holdings of the "clear majority" of other jurisdictions. Specifically, it stated that "attorney's fees expended in an effort to clear a disparaged title are recoverable as special damages in a slander of title action" (citing cases from the Washington Supreme Court, Utah Court of Appeals, New Mexico Court of Appeals, Minnesota Supreme Court and Michigan Supreme Court). After a brief analysis of these cases, the court affirmed the trial court's judgment, holding that "there seems to be no sound reason based upon either precedent or policy why Missouri should not adopt the majority view . . . that attorney fees and other legal expenses incurred in clearing a disparaged title are recoverable as special damages in slander of title actions."

Comment: Veteran lawyers well know the thornbush that is a slander of title action and usually steer their clients away from any tactic in a property dispute that may give rise to such an action.  “Newbies” wanting to please their clients with an aggressive first move in court should take note.  Slander of title is not a consequence worth inviting.   Here, one hopes that the Pughs were not represented at all when they filed their mechanic’s lien claim.  The claim related to Mr. Pugh’s apparently voluntary assistance in cutting down three trees at a time prior to the later controversy.  Mr. Pugh, after that controversy, did send an invoice for the work, but the evidence showed that there had been no expectation of remuneration at the time the work was done. 


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