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Lone v. Brown

Decided: March 11, 1985.

ROBERT LONE AND ELIZABETH LONE, PLAINTIFFS-RESPONDENTS,
v.
KEITH P. BROWN, DEFENDANT-APPELLANT



J. H. Coleman and Simpson. The opinion of the court was delivered by Coleman, J.h., J.A.D.

Coleman

The fundamental questions presented for determination in this appeal are whether the filing of (1) a notice of lis pendens on May 15, 1981, (2) a notice of appeal on June 17, 1981, or (3) a notice of lis pendens on June 17, 1981 can give rise to a slander of title cause of action. The trial court granted plaintiffs summary judgment on liability finding that defendant had slandered plaintiffs' title. In a nonjury trial, the judge later awarded plaintiffs compensatory damages. We now hold that the filing of each of the foregoing documents was absolutely privileged. Consequently, defendant was immune from liability for slander of title. The judgment for plaintiffs is reversed.

The facts essential to our determination are not in serious dispute. On April 6, 1981 Brown contracted to purchase a home from the Lones which is located at 241 Summit Drive, Boonton Township, N.J. for $90,000. Title was scheduled to close on June 2, 1981. Brown deposited $500 on the signing of the contract. The contract obligated him to make an additional $8,500 deposit by April 26, 1981. Brown was obligated to make immediate application for an $80,000 purchase money mortgage.

The contract also provided that if Brown did not make application for the mortgage immediately, or if the additional $8,500 deposit had not been made by April 26, 1981, or if the mortgage commitment was not obtained within 45 days, either party was free to void the contract. On April 29, 1981 plaintiffs exercised their option and voided the contract because Brown had neither made application for a mortgage nor made the additional deposit. The Lones then contracted to sell the home to Herbert Seiler for $88,000; he agreed to a May 15, 1981 closing. Seiler did not require a mortgage.

On May 11, 1981 Brown filed a complaint in Chancery for specific performance of the contract. On May 15, 1981 Brown filed a notice of lis pendens and served same upon Seiler's attorney. On June 5, 1981 the Chancery judge granted the Lones summary judgment and dismissed the complaint for specific performance. The lis pendens notice was also discharged.

Brown filed a notice of appeal and another notice of lis pendens on June 17, 1981. On August 20, 1981 the Appellate Division denied the Lones' applications for summary affirmance and to require Brown to file a supersedeas bond. At or about the same time, Seiler notified the Lones that he was no longer interested in purchasing the home. He exercised his option and voided the contract. On January 26, 1982 the Appellate Division affirmed the decision of the Chancery Division. The second lis pendens was also discharged.

Shortly after the Appellate Division denied summary affirmance on August 20, 1981, counsel for the parties commenced negotiations for an amendment to the contract to permit Brown to purchase the property for the same $90,000. The parties did not come to agreement on the amendment, however, until the day before the Appellate Division's decision. Consequently, on January 25, 1982 the parties executed an addendum to the April 6, 1981 contract. That addendum provided that neither the execution of the addendum nor the closing of title and delivery

of the deed would constitute "a waiver of any claims or rights which each may have against the other for any matter arising prior to the date of closing. . . ." They also agreed that the addendum would not moot the pending appeal. Brown took title to the property on or about February 1, 1982.

On September 21, 1982 the Lones instituted the present action against Brown alleging that Brown had wrongfully instituted the action for specific performance and filed a lis pendens which prevented the Lones from selling the property to Seiler for $88,000. Plaintiffs also alleged that Brown breached the contract between June 2, 1981, the originally scheduled closing date, and February 1, 1982, when Brown took title. Plaintiffs sought damages for the alleged breach of contract and for the alleged wrongful prevention of Seiler from closing title. Partial summary judgment was granted plaintiffs on August 30, 1983 based on the papers filed. No oral or written opinion was given explaining the reasons therefor despite the requirement of R. 2:5-1(b). The order granting partial summary judgment provided:

Following the entry of partial summary judgment, the trial judge conducted a nonjury trial to determine the damages to be awarded plaintiffs. He found that plaintiffs were entitled to compensatory damages and cost of suit in the sum of $14,985.38 inclusive of prejudgment interest. The damages accrued from May 15, 1981, when the first lis pendens was filed and the date title was scheduled to close with Seiler. In the damages trial, the judge ...


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