Wednesday, April 20, 2011

A Claim Too Far

Sullivan v. Stear, 2011 VT 37

Imagine this: you own a parcel of land for thirty-six years and basically never touch it, then finally at the height of the real estate bubble, you decide to develop and sell it.  Your contractors start preparing a house site, and all of a sudden one of the neighbors tells the contractor that he can’t use the access road to your property because it is the neighbor’s driveway.  The neighbor threatens to call the State Police if the contractor continues to use the road (a.k.a. driveway).  What is your next step?  Maybe a reasonable conversation in which you explain to the neighbor that the road is a town highway.  But the neighbor tells you that he has a deed and “clear title” to the road.  And in fact, a search of the land records shows that one of the neighbor’s deeds purports to convey the road that you thought was a town highway.  Now what?  That’s right . . . file suit.

The first lawsuit in this case was filed by the plaintiff, Ann Sullivan, as a declaratory action to have the Windsor Superior Court find that the access road was a town highway.  Ms. Sullivan also asked for damages for attorney’s fees, diminished property value, and costs associated with her inability to sell the property while the road ownership was at issue.  The superior court granted partial summary judgment to Ms. Sullivan, concluding that the road was in fact a town highway.  The neighbors and defendants here, perhaps lacking sound legal advice, perhaps ignoring it, did not appeal this decision, but instead asked the town selectboard to clarify the matter.  The selectboard wrote a letter stating that the road/driveway had never been a town road (though it later reversed its opinion and decided that the road was a town highway).  No word on what the neighbors did with this letter, but it clearly did not serve to alter or overrule the judgment of the Windsor Superior Court.   

After Ms. Sullivan won round one, or at least the important part of it, she went ahead with lawsuit number two: a slander-of-title claim.  A slander of title claim involves three elements:  first, showing that the defendants published a false statement about the plaintiff’s title; second, showing that the statement caused special damages; and third, showing that the defendants acted with actual malice.  The superior court had to reject this claim, and the SCOV agreed.  Although the SCOV acknowledged that the defendants had published a false statement by recording a deed that purported to establish that the defendants owned a public road, the SCOV reasoned that this statement was not about Ms. Sullivan’s title.  According to the SCOV, a statement concerns a person’s title when “it affects that person’s ability to make deals with others regarding the property disparaged.”  Here, however, the falsehood in the defendant’s deed concerned the status of a public road.  Since the property disparaged was the road, and Ms. Sullivan never had the right to make any deals regarding the road, the SCOV concluded that this didn’t satisfy the first element of the slander-of-title claim.

Maybe there are some realtors or real estate attorneys out there who can shed some light on this one for me.  I don’t know the facts about the property lines in this case, but if we assume that the disputed road was the only access to Ms. Sullivan’s property, then wouldn’t the fact that someone else had recorded a deed asserting private ownership of the road make it pretty difficult to market Ms. Sullivan’s property?  I bet that Ms. Sullivan would have had a hard time proving the “actual malice” element of the slander-of-title claim, but it does appear that there is a strong argument that the false statement about who owned the road affected Ms. Sullivan’s ability to make deals with others regarding her property.  But it clearly was not the winning argument, strong or not. 

So in the end, Ms. Sullivan gets two prizes: clear access over the town road/putative driveway and the attorney fees that fueled it.

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