Saturday, July 31

Procedural Posture

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Defendants, prospective lessee and title company, challenged a judgment of the Superior Court of the City and County of San Francisco (California), which awarded plaintiff property owner compensatory and punitive damages in his action for slander of title and negligence against defendants.

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Overview

Plaintiff property owner negotiated with defendant prospective lessee for the lease of a building plaintiff owned. Prospective lessee unilaterally prepared a memorandum of agreement, which he asserted reflected the essential terms of the lease agreement with plaintiff. Prospective lessee signed and notarized the document and had defendant title company record the document. No lease agreement was ever executed. Plaintiff later encountered difficulty in selling the building as a result of the recorded document. When prospective lessee refused to execute a quitclaim deed, plaintiff brought a slander of title action against defendants. The trial court awarded plaintiff $ 200,000 compensatory damages against both defendants and $ 2.66 million in punitive damages against prospective lessee alone. Upon review, the court reversed and remanded for a new trial on damages because plaintiff did not prove that he suffered any financial loss from impaired vendibility of the property. The court also held that in light of defendant’s conduct, the amount of compensatory damages, and defendant’s wealth, the amount of punitive damages was excessive.

Outcome

The court reversed the judgment in favor of plaintiff property owner and remanded for a new trial on the issue of damages because plaintiff failed to prove that he was damaged by the actions of defendants, prospective lessee and title company, and because the amount of punitive damages awarded was excessive.

 

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