Editor: David Reiss
Brooklyn Law School

April 6, 2013

Minnesota District Court Denies Plaintiffs’ Quiet Title Claim Because of Default; Plaintiffs Fail to Sufficiently Allege Slander of Title Claim

By Justin Rothman

In Novak v. JP Morgan Chase Bank, CIV. 12-589 DSD/LIB, 2012 WL 3638513 (D. Minn. Aug. 23, 2012), the United States District Court of Minnesota granted the defendants’ motion to dismiss the plaintiffs’ claims.

In the case at hand, each plaintiff executed a promissory note and mortgage of real property in Minnesota. Thereafter, each plaintiff defaulted. Each defendant either initiated foreclosure-by-advertisement proceedings against a particular plaintiff or threatened such proceedings in accordance with the respective mortgages. Every mortgage in this case states that the lender or its successors or assignees “may require immediate payment in full of all sums secured by the mortgage and may invoke the power of sale” when a mortgagor defaults under the mortgage. The mortgages are in various stages of default, ranging from potential foreclosure to completed sheriff’s sale. Plaintiffs’ sought to quiet title and also claimed slander of title. The court dismissed each of these claims in turn.

First the court denied the plaintiffs’ quiet title claim. The court reasoned, “actions to quiet title and determine adverse claims are equitable actions,” and a “plaintiff who seeks equity must come into court with clean hands.” The court found that plaintiffs in the present action came to the court with “unclean hands” because they had each defaulted on their respective mortgage loans by failing to make promised payments. The plaintiffs wanted to make their respective mortgages invalid after defaulting. The court concluded that the plaintiffs in this case sought equitable relief “from an outcome of their own creation.”

The court then considered the plaintiffs’ slander of title claim. To state a claim of slander of title, a plaintiff must allege facts that show: (1) That there was a false statement concerning the real property owned by the plaintiff; (2) that the false statement was published to others; (3) that the false statement was published maliciously; and (4) that the publication of the false statement concerning title to the property caused the plaintiff pecuniary loss in the form of special damages. The court stated that the plaintiffs failed to “allege facts from which the court could infer that defendants made a false statement, that defendants acted with malice or that plaintiffs suffered any pecuniary damages from the publication of amounts due on their mortgages.” Thus, the claim was dismissed.

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