M & H Glass Enterprises v. Tischler

Filed 4/19/06 M & H Glass Enterprises v. Tischler CA2/6

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SIX

An easement exists over two adjacent parcels, Lots 1 and 2. The easement runs across Lot 2, the burdened lot, for the benefit of Lot 1. This action arises from allegedly slanderous statements made by the prospective buyer of Lot 2 and its title company that an easement did not exist across Lot 2. The trial court sustained a demurrer without leave to amend on the ground that the action was barred by the litigation privilege. (Civ. Code, § 47, subd. (b)(2.)^[1] We affirm.

We granted a request to judicially notice the record and our decision in a related appeal, M&H Glass Enterprises v. Tischler (Aug. 15, 2005, B169667) (Glass I). In Glass I, M&H Glass and the trustees of the Rimar Trust agreed that an implied driveway easement existed across the Rimar Trust property (Lot 2) for the benefit of the M&H Glass property (Lot 1). However, the trustees appealed the trial court's judgment that an express easement also existed across its property. We concluded that an express easement did exist, and affirmed the trial court's judgment on that issue. The dispute in Glass I arises from the same set of facts in the instant appeal, Glass II. We have attempted to limit our recitation to only those facts relevant to the Glass II litigation.

FACTS

M&H Glass Enterprises (M&H Glass) and Ronald B. Tischler and Paul N. Frimmer, as trustees for the Rimar Trust (Rimar) are neighboring landowners in a luxury subdivision in Thousand Oaks, known as Country Club Estates. Lot 1 is east of Lot 2. M&H Glass and its successors in interest have historically used the driveway easement across the Rimar lot (Lot 2) to reach their parcel (Lot 1). There is no other access to Lot 1 from within the subdivision.

Glass I Litigation

1) Identity of Parties

In 1999, M&H Glass sold Lot 2 to Larry and Linda E. Waitsman (the Waitsmans), who are not parties to this appeal. The deed made no reference to an easement. This single omission has given rise to the lengthy Glass I and Glass II litigation.

In 2000, the Waitsmans sold Lot 2 to Rimar. At approximately the same time the Waitsmans and Rimar entered into escrow, M&H Glass's failure to convey an easement to the Waitsmans came to light.

In 2000, M&H Glass sold Lot 1 to appellants Ephram T. Nehme and Odette Nehme as individuals and as trustees of the Nehme Family Trust (the Nehmes). The Nehmes are the present owners of Lot 1. M&H Glass held title to Lot 1 when it filed its complaint in Glass I. After the Nehmes took title, the complaint was amended to include them as plaintiffs.

2) Nature of Glass I Dispute

The Waitsmans and Rimar opened escrow with American Title Company (American Title). The defect in the Waitsman deed was discovered and, to solve this dilemma, M&H Glass and the Waitsmans executed reciprocal "easement grant deeds" granting each an easement over the other's property. The deeds were prepared by American Title and executed at their office.

M&H Glass asked American Title to record the reciprocal easement grant deeds, but Rimar opposed the request. M&H Glass then filed a quiet title action (Glass I) against Rimar and American Title requesting delivery of the deeds. It alleged a breach of contract claim against American Title for refusing to record them. M&H Glass also requested a judicial determination that the reciprocal easement grant deeds were valid to create an express easement. American Title deposited the deeds with the trial court, pending the outcome of the litigation. The trial court found that the reciprocal easement grant deeds created a valid express easement and ordered them delivered to M&H Glass. We affirmed those rulings.

Glass II Litigation

In the Glass II litigation, the operative pleading is the fourth amended complaint. For the purposes of our analysis, we need not recite the contents of the original or the first-, second- and third-amended complaints.

M&H Glass claims that it was slandered by Rimar and American Title because they told third parties that no easement existed across Lot 2 for the benefit of Lot 1. M&H Glass alleges that this reduced the marketability of Lot 1 because prospective buyers believed there was no access to Lot 1 from within the subdivision. As a result, appellants M&H Glass and the Nehmes filed a complaint for money damages and demanded a jury trial. The action was filed against respondents American Title, Rimar Trust and Richard Carpenter and Mary Carpenter, as individuals. The Carpenters are beneficiaries of the Rimar Trust. M&H Glass alleged causes of action for 1) slander of title; 2) interference with contract; 3) intentional interference with prospective financial advantage; and 4) negligent interference with prospective financial advantage. M&H Glass also alleged three causes of action against American Title for conversion, professional negligence, and breach of oral contract.

The trial court sustained the demurrers of Rimar and American Title without leave to amend as to the first four causes of action. It made no reference to the disposition of the latter three causes of action against American Title, and the parties do not mention them on appeal, thus we need not address them.

1) Factual Allegations in Fourth Amended Complaint

M&H Glass alleged that Rimar originally expressed an interest in purchasing Lot 1, the benefited parcel (now owned by the Nehmes). In April 2000, Ronald B. Tischler of Rimar spoke to Morris Glass of M&H Glass concerning the possible purchase of Lot 1. Glass told Tischler there was an easement for a common driveway over Lot 2, and the driveway was to be shared by both lots. Glass said that he and the Lot 2 owners (the Waitsmans) had discussed expanding the common driveway.

Rimar then made a written offer to purchase Lot 1. During negotiations, M&H Glass confirmed the existence of the easement, and its existence was also "reconfirmed by real estate brokers and real estate disclosure statements." M&H Glass and Rimar could not agree on a purchase price, so Rimar next made an offer on Lot 2. That offer was accepted, and in May 2000, Rimar and the Waitsmans entered into a Vacant Land Purchase Contract. The easement was a matter of public record and was disclosed on preliminary title reports as well as by the Waitsmans and M&H Glass.

M&H Glass alleged that Rimar denied the existence of the easement "without an honest or good faith belief in that claim." "Given Rimar's threatened challenge to the validity of the Easement, and to avoid unnecessary, costly litigation regarding it," American Title advised M&H Glass and the Waitsmans to "resolve any perceived ambiguity by confirmation of the Easement by means of an Easement Grant Deed."

In July 2000, M&H Glass and the Waitsmans executed the reciprocal easement grant deeds referred to above. The Waitsmans granted M&H Glass and its successors in interest "the right to use portions of Lot 2 for ingress, egress and driveway purposes." M&H Glass asked American title to record the deeds, and it agreed. Rimar and the Waitsmans subsequently instructed American Title not to record the deeds. M&H Glass alleges that on July 20, 2000, "the Waitsmans and/or Rimar threatened to and/or directed American Title to destroy the Easement Grant Deed." American Title held the deeds and refused to return them to M&H Glass.

2) Causes of Action

In its cause of action for slander of title, M&H Glass alleged that Rimar and American Title "published and republished the claim that no valid easement, express or implied, over Lot 2 existed, and that Lot 2 was not subject to the Easement (the 'slander'). That statement was and is false. . . . [¶] Defendants published and republished the slander to, inter alia, the City of Thousand Oaks, the Country Club Estates Homeowner's Association, neighbors and third parties. These publications began in or about May 2000 and are continuing."

M&H Glass alleged that Rimar and American Title "knew or reasonably should have known" that M&H Glass would be required to inform potential buyers, lenders and other third parties of the "false and malicious claim" that there was no easement. Rimar and American Title "knew or reasonably should have known that their conduct would force [M&H Glass] to repeat or 'republish' the slander, which would injure the vendibility of Lot 1."

M&H Glass claimed that Rimar denied the existence of an easement "to force the payment of money and/or other consideration from [M&H Glass] in connection with the development of Lot 1." M&H Glass further alleged that Rimar and American Title "engaged in a concerted campaign designed to deny [M&H Glass's] rights to the Easement, . . . in order to gain an improper financial advantage." Rimar allegedly interfered with the sales contract by threatening to cancel escrow if the Waitsmans recorded the deed. American Title interfered with the land purchase contract by refusing to return the deeds to M&H Glass. Rimar and American Title intentionally engaged in this conduct to adversely affect the sales price of Lot 1.

"Defendants' conduct . . . has interfered with the Nehmes' economic prospects for . . . development of Lot 1. Among other things, the City of Thousand Oaks . . . has restricted the Nehmes' development of Lot 1 unless and until the Easement Grant Deed is recorded. As a result . . . , the Nehmes cannot build or enjoy a home on the land, and cannot reasonably market or sell it."

3) Demurrer

Rimar demurred on the grounds that the first, second, third and fourth causes of action are barred by the litigation privilege. American Title adopted Rimar's argument and demurred on the grounds that the action was uncertain, M&H failed to state a cause of action, and the Nehmes lacked standing. M&H Glass filed opposition. The court sustained the demurrers without leave to amend as to the first through fourth causes of action against Rimar and American Title.

DISCUSSION

Standard of Review

When reviewing a demurrer sustained without leave to amend, we first review the trial court's ruling de novo to determine whether the plaintiff has alleged sufficient facts to state a cause of action. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) We treat the pleadings as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. (Ibid.) If there is a reasonable possibility that the defect can be cured by amendment, the trial court has abused its discretion and we reverse. (Hendy v. Losse (1991) 54 Cal.3d 723, 742; Blank, at p. 318.) The ruling will be affirmed if it is proper on any of the grounds stated in the demurrer, whether or not the trial court relied on any of those grounds. (Carman v. Alvord (1982) 31 Cal.3d 318, 324.)

Litigation Privilege

A publication made in any legislative, judicial or other official proceeding authorized by law is absolutely privileged. (§ 47, subd. (b).) This includes a publication made during the initiation or course of an official proceeding. (Ibid.). The privilege applies to "any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that have some connection or logical relation to the action. [Citations.]" (Silberg v. Anderson (1990) 50 Cal.3d 205, 212.) The litigation privilege has been held to immunize defendants from liability based on the torts such as abuse of process, intentional inducement of breach of contract and intentional interference with prospective economic advantage. (Id. at pp. 215-216.)

The privilege applies even if the publication is made outside the courtroom and no function of the court or its officers is involved. (Moore v. Conliffe (1994) 7 Cal.4th 634, 641.) It is intended to "afford litigants and witnesses [citation] the utmost freedom of access to the courts without fear of being harassed subsequently by derivative tort actions." (Silberg v. Anderson, supra, 50 Cal.3d at p. 213.)

As we said in Knoell v. Petrovich (1999) 76 Cal.App.4th 164, "[t]he privilege has been broadly construed to apply to demand letters and prelitigation communications by an attorney. [Citation.] 'Although originally enacted with reference to defamation actions alone [citation], the privilege has been extended to any communication, whether or not it is a publication, and to all torts other than malicious prosecution. [Citations.]'" (Id. at pp. 169-170.) It also applies to prelitigation communications which have "some relation" to an anticipated lawsuit. (Hagberg v. Cailfornia Federal Bank (2004) 32 Cal.4th 350, 361; Rubin v. Green (1993) 4 Cal.4th, 1187, 1194-1195.)

We look first to the sequence of events to determine if Rimar and American Title's alleged slander bore a relationship to an anticipated lawsuit. In May 2000, Rimar and the Waitsmans entered into a sales contract and opened escrow with American Title. At this time the lack of the express easement in the Glass/Waitsman deed was discovered.

M&H Glass alleged that "[the] publications began in or about May 2000 and are continuing."

On July 2, 2000, M&H Glass and Rimar executed reciprocal deeds. On July 20, 2000, the Waitsmans or Rimar allegedly "threatened to and/or directed American Title to destroy the Easement Grant Deed." On August 15, 2000, M&H Glass filed a quiet title action (Glass I). Two years later, on June 13, 2002, M&H Glass filed the slander of title action (Glass II).

There was a direct relationship between the statements of Rimar and American Title and the Glass I lawsuit. Just three months elapsed from the date the Waitsmans and Rimar entered into the sales contract, the defect in title was discovered and M&H Glass filed its quiet title action. Only six weeks elapsed between the date the reciprocal easement grant deeds were executed and the filing of Glass I. M&H Glass was certainly aware that if there was no easement across Lot 2, the value of Lot 1 would be significantly reduced. M&H Glass's sale of Lot 1 to the Nehmes was pending as was the Waitsmans' sale to Rimar of Lot 2. M&H Glass likely needed a quick resolution. Indeed, M&H Glass stated in its complaint that the reciprocal easement grant deeds were executed "to avoid unnecessary, costly litigation . . . ."

Rimar, too, must have wanted a determination of whether an easement burdened its property. It is likely Rimar and American Title would have expressed this concern to third parties, especially since Rimar was in the process of buying the lot that was allegedly burdened. We conclude that Rimar and American Title made these statements in anticipation that M&H Glass would file a lawsuit to establish the existence of an easement over Lot 2. Their statements fell within the scope of the litigation privilege and M&H Glass's lawsuit is therefore barred.

Slander of Title

We also observe that M&H Glass failed to allege facts sufficient to state a claim for slander of title. The elements of this tort are "publication, falsity, absence of privilege, and disparagement of another's land which is relied upon by a third party and which results in a pecuniary loss." (Appel v. Burman (1984) 159 Cal.App.3d 1209, 1214.) Setting aside consideration of the first three elements, M&H Glass did not allege facts to show that a third party relied on the statements or that it suffered a monetary loss as a result. M&H Glass does not name a single individual who heard these statements, relied on them or allege facts to show it suffered pecuniary loss. To the contrary, M&H Glass successfully sold Lot 1 to the Nehmes.

M&H Glass alleged that Rimar and American Title "knew or reasonably should have known that their conduct would force [M&H Glass] to repeat or 'republish' the slander, which would injure the vendibility of Lot 1." M&H Glass was not "forced" to repeat these statements; it was required to repeat them. By law, it was obligated to disclose to potential buyers that questions had arisen about access to the property and litigation was pending concerning the existence of the easement.

The trial court properly sustained respondents' demurrers without leave to amend.

The judgment is affirmed. Costs on appeal are awarded to respondents.

NOT TO BE PUBLISHED.

COFFEE, J.

We concur:

GILBERT, P.J.

PERREN, J.

Kent M. Kellegrew, Judge

Superior Court County of Ventura

______________________________

Ron S. Kaufman and Nina B. Ries for M&H Glass Enterprises and Ephram T. Nehme and Odette Nehme, Plaintiffs and Appellants.

Norman, Dowler, Sawyer, Israel, Walker & Barton, Richard M. Norman and Matthew P. Guasco for Ronald B. Tischler and Paul N. Frimmer, as trustees of the Rimar Trust, Richard Carpenter and Mary Carpenter, Defendants and Respondents.

Luce, Forward, Hamilton & Scripps and David R. Krause-Leemon for American Title Company, Defendant and Respondent.

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^[1] All further statutory references are to the Civil Code unless otherwise stated.