Opinion
CL-2010-17795
08-04-2011
Ann L.. Koz v. Wells Fargo Home Mortgage, et al.
James B. Kinsel Protorae Law, PLLC Attorney for Plaintiff Mary Catherine Zinsner Troutman Sanders LLP Attorney for Defendant Wells Fargo Bank, N.A. Jennifer Kies Mammen Bryan Cave LLP Attorney for Defendant CitiMortgage, Inc. Garth M. Wainman Walsh, Colucci, Lubely, Emrich & Walsh, PC Attorney for Defendants Excel Title Corp. and Lisa Merrill
MARCUS D. WILLIAMS
JANE MAPUM ROUSH
LESLIE M. ALDEN
JONATHAN C. THACHER
R. TERRENCE NEY
RANDY I. BELLOWS
CHARLES J. MAXFIELD
BRUCE D. WHITE
ROBERT J. SMITH
DAVID S. SCHELL
JAN L. BRCDE
LORRAINE NORDLUND
BRETT A, KASSABIAN
MICHAEL F. DEVINE
JUDGES
BARNARD F. JENNINGS
THOMAS J. MIDDLETON
THOMAS A FORTKORT
RICHARD J. JAMBORSKY
JACK B. STEVENS
J. HOWE BROWN
F. BRUCE BACH
M, LANGHORNE KEITH
ARTHUR B. VIEREGG
KATHLEEN H. MACKAY
ROBERT W. WOOLDRIOGE, JR.
MICHAEL P. MCWEENY
GAYLORD L FINCH, JR.
STANLEY P. KLEIN
RETIRED JUDGES
August 4, 2011
Dear Mr. Kinsel, Ms. Zinsner, Ms. Mammen, and Mr. Wainman;
Defendants Wells Fargo, CitiMortgage, Excel Title Corp., and Lisa Merrill are before the Court on their Pleas in Bar to Count IV of the Amended Complaint alleging slander of title. The Pleas in Bar are to the statute of limitations. Following briefing and oral argument by the parties, the case was taken under advisement. For the reasons that follow, the Pleas in Bar are sustained and Count TV of the Amended Complaint dismissed.
Conduct directed at the property is narrowly defined to include only those acts which "involve allegations of wrongful exercise of control over the property of another." Willard, 262 Va. at 480, 551 S.E.2d at 599. Conduct which does not alter the condition or availability for use of the property is, by definition, directed at the person, and does not constitute injury to property. Id.; Pigott v. Moran, 231 Va. 76, 81. 341 S.E.2d 179, 182 (1986).
BACKGROUND
Ann Koz and her late husband, Joe Koz, owned a home in Alexandria, Virginia, as tenants by the entirety. The couple became estranged in 2001. In 2006, Joe Koz arranged to refinance the marital home. He executed two notes for an amount totaling $810.000 and two deeds of trust purporting to secure the notes with the property. It is alleged that the closing documents were notarized without Joe Koz or Ann Koz present. Both deeds were recorded in the Fairfax County Land Records Office in June 2006.
Ann Koz's signature does not appear on the notes, but does appear on the deeds of trust. Ann Koz alleges that her signature was forged on the deeds of trust. She asserts that she became aware of the refinance and the alleged forgery in June 2006 when she received an escrow refund check. She claims that Joe Koz assured her she would not be responsible for the loans because her name did not appear on the notes. Joe Koz died in April 2010, and Ann Koz continued to pay on the loans until obtaining counsel in August 2010. She filed her Complaint on December 20, 2010, seeking equitable relief and damages under various theories including salnder of title.
For more information on the procedural history of the case, see this court's June 9, 2011 letter opinion.
ISSUES
Defendants' Plea in Bar presents two issues. First, what is the appropriate statute of limitations for slander of title: one year for slander, under Virginia Code § 8.01-247.1; two years for actions with no prescribed limitation, under Virginia Code § 8.01-248; or five years for damage to property, under Virginia Code § 8.01-243? Second, when did Plaintiff's cause of action for slander of title accrue: from the recording of the deeds of trust; from the discovery of the recording; or is it a continuing wrong, for which the limitations period does not commence until Defendants release their liens against the property?
ANALYSIS
Standard of Review
A plea in bar presents a single issue of fact that, if proven, constitutes a complete defense to the plaintiff's claim. Campbell v Johnson. 203 Va. 43, 47, 122 S.E,2d 907, 910 (1961). As for the purposes of demurrer, when considering a plea in bar, the court must regard all statements made in the pleadings as true. Tomlin v. Mckenzie 251 Va. 478, 480, 468 S.E.2d 882, 884 (1996). The moving party has the burden of proof with regard to the issues of fact raised. Campbell. 203 Va. at 47, 122 S.E.2d at 909. Statute Of Limitations
In Virginia, there is no controlling authority indicating which statute of limitations applies to slander of title actions. Two courts have addressed the issue, but neither has reached a definitive conclusion. In Warren v. Bank of Marion, the United States District Court for the Western District of Virginia held that slander of tide is "an aspersion upon one's property, rather than upon one's person," but ultimately avoided application of a statute of limitations by finding the statute of limitations had not begun to run. 618 F. Supp. 317, 320 (W.D. Va. 1985). In Cherokee Corp. v. Chicago Title Ins. Corp., the Warren County Circuit Court applied the catch-all provision of section 8.01-248 to a slander of title claim, but was not asked to address whether other statutes of limitations may apply because the claim had been brought within the shortest limitation period. 35 Va. Cir. 19, 23 (Warren 1994).
At that time, the limitations period was one year. Cherokee Corp., 35 Va. Cir. at 28.
Various courts around the country apply the statute of limitations period for defamation. See cases collected at 131 A.L.R. 837 (1941). In Virginia, that period is one year. Va. Code Ann. § 8.01-247.1 (2011). Other authorities maintain that slander of title is not a form of slander, but rather a form of interference with economic relations. See W. Page Keeton et al., Prosser and Keeton on the Law of Torts. §128 at 962-64 (5th ed 1984); Restatement (Second) of Torts § 624 (1977), If viewed as an economic tort, no limitation is elsewhere prescribed, and the two-year catch-all provision of Virginia Code § 8.01-248 would apply.
At common law, slander of title was regarded as distinct from personal defamation. Keeton et al., supra, § 128 at 962-63. Despite the shared term "slander," slander of title "seems to have been recognized from the beginning as only loosely allied to defamation, and to be rather an action on the case for the special damage resulting from the defendant's interference." Id. at 963. It is the requirement of special damages that continues to define slander of title as an action for economic harm, rather than an action for harm to reputation. Id. at 964; Levine v. McLeskey. 881 F. Supp. 1030, 1050 (E.D. Va. 1995), aff'd in part, rev'd in part. 164 F.3d 210 (4th Cir. 1998) (special damages required in action for slander of title).
The Court of Common Pleas in 1836 held that "the necessity for an allegation of actual damage, in the case of slander of title . .. rests on the nature of the action itself, namely, that it is an action for special damage actually sustained, and not an action for slander." Malachy v. Soper. 3 Bing, N.C. 371, 385-386 (C.P. 1836) (quoted in Jeremiah Smith, Disparagement of Property. 13 Colum. L. Rev. 121, 121 n.3 (1913)). 5 Prior to 1977, Virginia law applied a five-year statute of limitation to actions that survived the death of either party, to include actions for the "waste or destruction of, or damage to, any estate." Keepe. 220 Va. at 591-92, 260 S.E.2d at 725. This language was construed to require direct, rather than consequential, damage to the property. Id at 592-93, 260 S.E.2d at 725. In 1977, the Code was amended to make all actions survivable, and to apply a five-year limitation to actions for "injury to property." Id, at 593 n.4,260 S.E.2d at 726 n.4; Va. Code Ann. 8.01-243 (B) (2011). Following these amendments, but in a case applying pre-1977 law, the Supreme Court rejected the direct damage requirement in favor of the test stated above. Keepe, 220 Va. at 593-94, 260 S.E.2d at 726.
The present case involves allegations of "falsehoods which are not personally defamatory, and yet cause pecuniary loss." Keeton et al., supra, § 128 at 962; see also William L. Prosser, Injurious Falsehood: The Basis of Liability. 59 Colum. L. Rev. 425, 426 (1959). This Court finds that slander of title is better categorized as a form of interference with economic relations, and that the one-year statute of limitations for defamation is not applicable.
A third option is the five-year statute of limitations applicable to injury to property under Virginia Code § 8.01-243(B). For the purposes of this statute, the appropriate test is whether the injury flowed from conduct directed at the property, rather than conduct directed at the person. Willard v. Moneta Bldg. Supply. 262 Va. 473, 480, 551 S.E.2d 596, 599 (2001); Keepe v. Shell Oil Co.. 220 Va. 587, 593-94, 260 S.E.2d 722, 726 (1979).
Here. Plaintiff's property remains in the same condition and available for the same use as it was before the deeds of trust were recorded. The only change has been to the equity she holds in the property. The Supreme Court of Virginia has never held that a loss of equity in real property amounts to injury to property. See Willard. 262 Va. at 480, 551 S.E.2d at 599. This Court is of the opinion that the Supreme Court of Virginia would not expand the case law to reach this conclusion. As such a pecuniary loss is a personal injury, the five-year statute of limitations does not apply.
For those reasons, this Court concludes that Virginia Code § 8.01-248 prescribes a two-year statute of limitations for slander of title. Accrual of Cause of Action
The deed of trust was recorded in June 2006 and discovered by the Plaintiff several weeks later. Thus, unless the alleged conduct qualifies as a continuing tort, the Plaintiff is barred from bringing this action.
In Virginia, a cause of action accrues "from the date the injury is sustained . .. and not when the resulting damage is discovered," unless otherwise prescribed by statute. Va. Code Ann. §8.01-230. The general rule is that "when an injury is sustained in consequence of the wrongful or negligent act of another and the law affords a remedy, the statute of limitations immediately attaches." Jordan v. Shands. 255 Va. 492, 498, 500 S.E.2d 215, 218 (1998) (citing Caudill v. Wise Rambler. 210 Va. 11, 14, 168 S.E.2d 257, 260 (1969)). Any injury, no matter how slight or difficult to ascertain, is sufficient to cause the statute of limitations to attach. Richmond Redevelopment & Hous. Auth. v. Laburnum Const. Corp.. 195 Va. 827, 837-838. 80 S.E.2d 574. 580-81 (1954).
When negligent or tortious conduct is continuous, the cause of action does not accrue until that conduct has ceased. Williams v. Norfolk & W. Ry. Co.. 530 F.2d 539, 542, (4th Cir. 1975) (pattern of employment discrimination was a continuing tort); City of Richmond v. James, 170 Va. 553, 567, 197 S.E. 416, 421 (1938) (continued emission of gas through uncapped pipe was continuing negligence). However, there is a distinction between continued tortious behavior and continued harm resulting from a single tortious act, to which the statute of limitations will attach at the time of injury. See Churchill Apartments Assocs. v. City of Richmond. 36 Va. Cir. 204, 206-207 (City of Richmond 1995) (cause of action accrued when landfill was improperly capped, even though resulting generation of methane gas was continuous).
Although the deeds of trust remain in the Fairfax County Land Records, this is merely the continuing effect of a single act. Therefore, Plaintiff's claim is not for a true continuing tort. Under the general rule that the statute of limitations attaches at the time of injury, the statute of limitations attached to the Plaintiff's slander of title claim at the time the deeds of trust were recorded, because her injury, in the form of damage to the equity she held in the property, was sustained at that moment. See Jordan. 255 Va. at 498, 500 S.E.2d at 218.
Accordingly, this Court concludes that the cause of action accrued upon the recording of the deeds of trust and the limitation period commenced on that date. It follows that the cause of action for slander of title is barred and hereby dismissed from this proceeding. An order incorporating this opinion is attached.
Sincerely,
Charles J. Maxfield CJM/phk
5
ORDER
THIS MATTER came to be heard on Wells Fargo, CitiMortgage, Excel Title Corp., and Lisa Merrill's Pleas in Bar to Count IV of the Amended Complaint alleging slander of title; and
IT APPEARING to the court for the reasons stated in this court's Letter Opinion of August 4, 2011 that the Pleas in Bar should be sustained; it is therefore
ORDERED that the Pleas in Bar are SUSTAINED and Count IV of the Amended Complaint is dismissed; it is further
ORDERED that the Court's Letter Opinion of August 4, 2011 is incorporated into this Order.
ENTERED this 4 ay of August, 2011.
_____________________
Honorable Charles J. Maxfield
In order to expedite the disposition of this matter, endorsement of this Order by counsel of record for the parties is waived in the discretion of the Court pursuant to Rule 1:13 of the Rules of the Supreme Court of Virginia. _______________________________________________ 1 Wells Fargo's Plea in Bar attacks other counts of the Amended Complaint. However, during the hearing, it was not clear whether the whole Plea in Bar was within the intended scope of the hearing. The Court declines to address the Plea's other issues in this opinion.