Superior Constraction, Inc. v. Linnerooth , 103 N.M. 716 ( 1986 )

STOWERS, Justice,

dissenting.

I cannot concur in the majority’s decision to immunize litigants from liability for slander of title by conferring upon them an absolute privilege to record notices of lis pendens, no matter how malicious may be the conduct of the parties or how false the statements contained within the notices. Facing this question of first impression, I believe that our lis pendens statute was not intended to immunize the recording of a notice of lis pendens in the circumstances of this case, and that the policy behind absolute privilege for defamatory statements made in the course of judicial proceedings does not contemplate the extension of that privilege to these circumstances.

I would hold that no absolute privilege attaches to the wrongful recording of a notice of lis pendens, and that a slander of title action can be predicated upon such a wrongful recording. The district court’s findings of fact are supported by substantial evidence in the record, and they indicate that such a wrongful recording occurred in this case. Accordingly, I believe that the district court’s judgment upholding the Linnerooths’ slander of title claim should be affirmed.

Furthermore, I believe the majority errs when it suggests that abuse of process might provide a remedy, but that “[ujnfortunately, the Linnerooths failed to bring such an action.” An appellate court may sustain the judgment of a trial court upon correct legal principles other than those relied upon by the trial court, if the relevant issues were presented in the trial court. First National Bank in Albuquerque v. Abraham, 97 N.M. 288, 291, 639 P.2d 575, 578 (1982).

Recovery for the tort of slander of title may be had upon proof of special damages arising from the willful recording or publication of matter which is untrue and disparaging to the complainant’s property rights in land, by one who acts with malice and without the privilege to do so. Den-Gar Enterprises v. Romero, 94 N.M. 425, 430, 611 P.2d 1119, 1124 (Ct.App.), cert. denied, 94 N.M. 628, 614 P.2d 545 (1980).

The majority here create a new absolute privilege from liability for defamatory and slanderous statements. They do so without considering the policy grounds enunciated by New Mexico courts in extending absolute privilege first, to judicial pleadings, and second, to out-of-court communications made by attorneys and reasonably related to judicial proceedings. Instead, the majority adopt the rule and the rationale of several other jurisdictions. Characterizing the filing of a notice of lis pendens as nothing more than a republication of absolutely privileged pleadings made in the course of a judicial proceeding, the majority flatly conclude that a mere republication should enjoy the same absolute privilege.

I cannot agree with this conclusion. First, I do not believe that the act of recording a notice of lis pendens with the county clerk of the county in which the property is located, pursuant to NMSA 1978, Section 38-1-14, is analogous to the filing of pleadings in the district court in which a suit is pending. Nor do I believe that the policy reasons for extending absolute privilege to judicial pleadings apply to the recordation of a notice of lis pendens.

Our Court of Appeals has granted an absolute privilege to false, malicious, and defamatory judicial pleadings because the privilege is considered necessary to the search in court for truth between the parties. Stryker v. Barbers Super Markets, Inc., 81 N.M. 44, 45, 462 P.2d 629, 630 (Ct.App.1969). A notice of lis pendens, however, is neither necessary nor relevant to the resolution of the underlying judicial proceeding. NMSA 1978, Section 38-1-14 permits, but does not require, the plaintiff in an action affecting title to real estate to record, not file, a notice of lis pendens. As the record in this case indicates, once a plaintiff chooses to do so, the notice is not subject to judicial approval or cancellation pending suit, except on equitable grounds. See NMSA 1978, § 38-1-15. Like the recording of a mortgage or other lien, the recording of a notice of lis pendens is a private act. See Newkirk v. Bigard, 125 Ill.App.3d 454, 463, 80 Ill.Dec. 791, 797, 466 N.E.2d 243, 249 (1984), aff'd, in part, rev’d in part, 109 Ill.2d 28, 92 Ill.Dec. 510, 485 N.E.2d 321 (1985). The willful recording of a false deed may support an action for slander of title. Den-Gar Enterprises v. Romero, 94 N.M. at 430, 611 P.2d at 1124. I do not believe that the willful recordation of a false notice of lis pendens is entitled to the absolute privilege conferred upon judicial pleadings.

Secondly, I believe the majority’s characterization of the notice of lis pendens as a mere republication of the pleadings, while conceptually appealing, overlooks the realities demonstrated by this ease. I appreciate that the notice of lis pendens, which operates as constructive notice, is, in effect, an out-of-court communication to a group of persons related to the pending litigation by their possibility of acquiring an interest in the real property. NMSA 1978, § 38-1-14. Nevertheless, I do not believe that the policy reasons for extending absolute privilege to out-of-court statements reasonably related to judicial pleadings call for the extension of absolute privilege to the recording of a notice of lis pendens in the circumstances of this case.

Common sense suggests that a court of final resort should hesitate to extend an absolute privilege that immunizes from tort liability conduct that the trial court found was knowingly false and maliciously done for improper purposes. The record indicates that Mr. DeWent never invested any money in the property to which he claimed a one-third interest and that he was aware that his signature was placed on the purchase agreement as a mere formality. He never intended to take the land, but wanted to build the Linnerooths’ home. Mr. DeWent testified that, intending to delay the Linnerooths’ closing of a construction contract with another builder, he played his “trump card” and filed his complaint and notice of lis pendens.

Our Court of Appeals has extended to attorneys the absolute privilege to make defamatory out-of-court statements related to the subject matter of judicial proceedings, to third parties with an interest in or connection to the proceedings, because public policy demands that attorneys be accorded “the utmost freedom in the legitimate pursuit of [the] client’s interests.” Penny v. Sherman, 101 N.M. 517, 521, 684 P.2d 1182, 1186, cert. denied, 101 N.M. 555, 685 P.2d 963 (1984); see also Romero v. Prince, 85 N.M. 474, 476, 513 P.2d 717, 719 (Ct.App.1973). Clearly, the filing of the lis pendens in this case was not done in the legitimate pursuit of Mr. DeWent’s interests. In extending an absolute privilege in these circumstances, the majority, I believe, have not struck a proper balance between the public policy of encouraging thorough airing of complaints before the courts and the fundamental public policy of assuring a remedy to parties wronged by the conduct of others.

Finally, I believe the majority have failed to ascertain the Legislature’s intent in enacting NMSA 1978, Section 38-1-14. They observe that the sole purpose of a notice of lis pendens is to give prospective buyers constructive notice of the pendency of judicial proceedings, and state that NMSA 1978 authorizes its filing. I believe that the statute is intended also to give actual notice to prospective buyers, for their protection. See Procacci v. Zaceo, 402 So.2d 425, 427 (Fla.App.1981).

Neither purpose is served by permitting plaintiffs, like Mr. DeWent and Superior, to record notices of lis pendens knowing that the statements are false and that the pending litigation will not affect title to real estate. It is not clear to me that the Legislature intended to authorize recording in such circumstances, or that it intended by enacting NMSA 1978, Section 38-1-14, to immunize the conduct of parties who do so maliciously in order to harm opposing parties.

Our Court of Appeals has intimated that the wrongful filing of a lis pendens may be the basis for a slander of title action. Bynum v. Bynum, 87 N.M. 195, 199, 531 P.2d 618, 622 (Ct.App.), cert. denied, 87 N.M. 179, 531 P.2d 602 (1975). The courts of numerous jurisdictions have so held. While the definition of a wrongful filing varies from jurisdiction to jurisdiction, it appears that an action for slander of title will lie for the recording of a notice of lis pendens in bad faith, with malice, with the knowledge that one has no interest in the land or, in some cases, without probable cause to believe that one has an interest in the land. See, e.g., Taylor v. Baldwin National Bank, 473 So.2d 489 (Ala.1985); Salstrom v. Starke, 670 P.2d 809 (Colo.App.1983); Bothmann v. Harrington, 458 So.2d 1163 (Fla.App.1984); Curry v. Or-wig, 429 N.E.2d 268 (Ind.App.1981); Bonnie Braes Farm, Inc. v. Robinson, 598 S.W.2d 765 (Ky.App.1980); Dane v. Doucet Brothers Construction Co., 396 So.2d 418 (La.App.1981); DeCarnelle v. Guimont, — Nev. —, 705 P.2d 650 (1985); Whyburn v. Norwood, 47 N.C.App. 310, 267 S.E.2d 374 (1980); Schlytter v. Lesperance, 62 Wis.2d 661, 215 N.W.2d 552 (1974).

The district court found that Superior and the DeWents recorded the notice of lis pendens knowing that they had no interest in the property, and did so maliciously, in order to circumvent the process of law and to pressure the Linnerooths into paying a debt not lawfully due. I would hold that NMSA 1978, Section 38-1-14, does not authorize such a wrongful recordation, and, therefore, that the notice of lis pendens was not privileged. Furthermore, the district court found that the Linnerooths suffered resultant damages in the amount of their attorneys fees. This award is reasonable, and does not constitute an abuse of discretion. The special damages requisite to a slander of title claim may include attorneys fees. Den-Gar Enterprises v. Romero, 94 N.M. at 430, 611 P.2d at 1124. All of the elements of slander of title under the test of Den-Gar Enterprises v. Romero have been established; therefore, I would affirm the district court’s judgment.

For the foregoing reasons, I respectfully dissent.