Defending Against Apocalyptic Hysteria And Other Frivolous Real Estate Claims

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End of the Word

Harold Camping’s claim that the world would end on May 21, 2011 has come to pass as just another frivolous claim about real estate.  Granted, it’s a mighty big frivolous claim, seeing as the whole earth was involved.  While it didn’t exactly lead me to prepare for the rapture, it did make me think about how to best deal with frivolous claims, albeit of the more mundane type.

Knowing the difference between a legitimate and a frivolous claim is a lawyer’s job.  And when your client is slapped with a frivolous claim, it’s good to know what to do about it.  Over the years, I’ve seen a number of frivolous claims concerning real estate.  For instance, there was the time when a shareholder in a real estate holding company recorded a Notice of Lis Pendens against the company’s property.  The problem was that the shareholder owned shares in the company–He didn’t own an interest in the property.  Therefore, he had no right to record a Notice of Lis Pendens.

The problem with frivolous claims against real estate is that they tend to tie the property up.  As long as the claim persists, it can be difficult to sell the property, or even to get work done on the property.  That’s why it’s important to take quick, decisive action.

Here are some of the steps that I consider taking when faced with a frivolous real estate claim:

Be Reasonable. Explain the Law. I tend to see the best in people until proven wrong.  So, it might just be that the frivolous claim is a mistake.  Maybe the other side’s lawyer is not a real estate expert.  While that isn’t an excuse, it might be an easy situation to fix.  I start by writing a letter explaining the law, and asking that the frivolous claim be dismissed.

Serve A Sanctions Notice. Courts don’t take kindly to frivolous claims.  Both clients, and their lawyers, can be sanctioned for asserting them.  Sanctions can include attorneys’ fees.  But, you have to follow the appropriate procedure to seek sanctions. Your sanctions notice must set forth the claims you deem frivolous.  It has to be sufficiently clear to put the other side on notice of the reasons that their claim lacks merit.

Assert a “Slander of Title” Counterclaim. A slander of title claim can be asserted any time someone makes and publishes a false statement concerning real property.  Publication can happen by recording a false lien.  In Minnesota, a slander of title claim allows the recovery of attorneys’ fees as special damages.

Bring a Motion to Dismiss or for Summary Judgment. If all else fails, it may be necessary to bring a motion to have the frivolous claim dismissed.  And when you do, you’ll be prepared to request your attorneys’ fees as a sanction, or as special damages for slander of title.

These strategies will leave your client in the best possible position, while leaving your adversary feeling as “bewildered” and “mystified” as Harold Camping on Sunday morning.