SLANDER OF TITLE: POTENTIAL CONSEQUENCES OF RECORDING A FALSE DOCUMENT.

SLANDER OF TITLE: POTENTIAL CONSEQUENCES OF RECORDING A FALSE DOCUMENT.

Illinois recognizes a cause of action if a document is falsely recorded against your real estate property’s title.  This cause of action is referred to as “slander of title.”  Depending on the intent of the individual or entity that slandered your property’s title, it can result in a significant award of monetary damages in your favor.

In order to win a slander of title lawsuit, you must first correctly plead the required elements.  Generally, slander of title involves the recording of a document in the county where your property is located that subsequently damages the property’s title.  However, the recording of a document is not necessary required.  Written or even oral words can rise to the level of slander of title.  Jody D. v. Bank of America, N.A., 2018 IL App (3d) 170558-U.

Elements for slander of title are 1) oral or written words that falsely disparage the property’s title; 2) damages suffered by the individual that owns the property, and 3) a degree of malice.  Jody D., 2018 IL App (3d) 170558-U; Nelson v. Bayview Loan Servicing, LLC, 2014 IL App (5th) 120419-U.

Any document that is inappropriately recorded, or any words or writings that disparage the property’s title and damage the property owner could form the basis for a slander of title claim.  The issues that arise in Illinois case law related to slander of title tend to focus more on damages suffered by the property owner and the degree of malice that motivated the other party.

First, damages must actually exist.  In Nelson, plaintiff brought an action against a loan company for failure to release a mortgage after the underlying loan was paid off.  Id. at ¶ 77.  The plaintiff failed to show how he was monetarily damaged by the unreleased mortgage.  Id.  As a result, judgment was granted in favor of the loan company.

An example of damages may have been that the plaintiff was not given a loan, or was not given a loan at a lower interest rate, due to the presence of the unreleased mortgage.

The failure to show any malice on the part of the individual or entity that purportedly slandered your title can also ruin a cause of action.  In Roy Zenere Trucking & Excavating, Inc. v. Build Tech, Inc., 2016 IL App (3d) 140946, a group of contractors recorded mechanics’ liens against a property owner’s title.  Id. at ¶ 49.  But the property owner failed to establish any fraudulent intent on the part of the contractors.  The court stated that “To prove malice, a plaintiff must show that the defendant knew that the disparaging statements were made with reckless disregard of their truth or falsity.  The law in Illinois is that if a party has reasonable grounds to believe that he had legal or equitable title or even a claim, then assertion of this claim does not amount to slander of title.”  Id.  As a result, judgment was entered in favor of the contractors.  Id.

Yet when malice exists, it can result in a monetary award to the property owner, including punitive damages.  See Chicago Title and Trust Co. v. Levine, 333 Ill.App.3d 420, 422 (3rd Dist. 2002).  In Levine, an individual recorded a lien against property despite an existing court order not to further encumber the property.  Id. at 424.  The property owner also showed that the lienholder knew of the existing court order.  Id.  The court awarded the property owner $3,929.60 in attorneys’ fees and $30,000.00 in punitive damages.  Id. at 422.

It is clear from the Illinois case law that a slander of title cause of action is difficult to bring and maintain.  However, in the presence of actual damages and malice, a property owner can prevail.

For additional reading on slander of title see:

 

Gambino v. Boulevard Mortg. Corp., 398 Ill.App.3d 21 (1st Dist. 2009);

Contract Development Corp. v. Beck, 255 Ill.App.3d 660 (2nd Dist. 1994);

Home Investments Fund v. Robertson, 10 Ill.App.3d 840 (2nd Dist. 1973).

 

Andrew Szocka, P.C. can be contacted online or by phone at (815) 455-8430.

 

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