Important Slander of Title Decision
In Ballard v. 1400 Willow Council Of Co-Owners, Inc., #2010-SC-000533-DG (November 21, 2013), the Kentucky Supreme Court overturned its own precedent concerning the applicable statute of limitations in slander of title actions. The opinion also includes an extensive discussion of whether the filing of a statutory lis pendens can be the basis for a slander of title claim.
Ballard owned a two-story penthouse unit in the 1400 Willow condominium. One of the two-story exterior walls of her unit was comprised entirely of windows. Following more than a decade of deterioration, the condominium’s governing body had the “wall of windows” replaced. Under the governing documents, the repair was solely the condo’s responsibility. Nevertheless, the condo filed a notice of lien and a lis pendens in an enforcement action. In the meantime, Ballard couldn’t sell the unit and claimed the lis pendens slandered the title, making the unit unmarketable. The condo claimed that the one-year statute of limitations for “libel or slander” barred the action. It also claimed that the filing of the lis pendens was protected by the absolute privilege that is accorded to legal proceedings.
The Court concluded that “slander of title is not a sub-category of slander,” but “an action for injury to real property rights resulting from disparagement….” As such, it is governed by the five-year statute of limitations applicable to “an injury to the rights of the plaintiff … not otherwise enumerated." A 1995 ruling that had applied the one-year S/o/L to slander of title claims was explicitly overturned.
The Court also discussed the marked split among U. S. jurisdictions concerning the privilege to be afforded a statutorily authorized lis pendens. Many jurisdictions hold that a lis pendens is, in effect, a republication of the proceedings in the action and is accorded the same absolute privilege. The Kentucky Court decided to follow the minority rule and afford the lis pendens only qualified immunity, allowing the jury to determine its effect. Since the jury had found that the statements made in the lis pendens were false and made knowingly and maliciously, the jury properly concluded that the qualified privilege did not shield the condo from liability.
Caution should always be exercised in evaluating the applicable statute of limitations. For example, the applicable New York S/o/L, for “libel, slander [or] false words causing special damages” is only one year (CPLR §215 ¶3). Kentucky’s S/o/L lacked the more expansive language. Because the opinion gives a good summary of the jurisdictions affording absolute immunity, it would serve as a starting point for research on the issue.