HAVILAH REAL PROPERTY SERVICES, LLC v. VLK, LLC
108 A.3d 334
| D.C. | 2015Background
- VLK (Karen and VLK, LLC) and Havilah (Alderman) were rival real-estate purchasers; a personal relationship between Carlson and Alderman factored into the dispute.
- VLK filed a Maryland suit alleging conspiracy and interference; in that suit VLK recorded lis pendens on 51 Havilah-owned D.C. properties; later jury in Maryland found for Havilah/Alderman but found Carlson liable to VLK for breach of fiduciary duty.
- Havilah sued VLK in D.C. Superior Court claiming malicious prosecution and tortious interference with contract/prospective advantage based on 31 lis pendens recorded in D.C.; trial court granted summary judgment on malicious prosecution but let tortious interference proceed.
- At trial the jury found for Havilah on tortious interference and awarded $602,942; VLK appealed arguing lis pendens are absolutely privileged and other evidentiary/damages errors; Havilah cross-appealed the malicious prosecution dismissal.
- The D.C. Court of Appeals considered whether a lis pendens is absolutely or conditionally privileged in tortious-interference claims and whether multiple lis pendens constitute the “special injury” element for malicious prosecution.
Issues
| Issue | Plaintiff's Argument (Havilah) | Defendant's Argument (VLK) | Held |
|---|---|---|---|
| Whether filing lis pendens is absolutely privileged against tortious-interference claims | Lis pendens should not be actionable when filed in connection with litigation; majority rule supports absolute privilege | Lis pendens are absolutely privileged; public policy and analogy to absolute privilege for judicial publications support bar to suit | Conditionally privileged: privilege applies only if underlying litigation was pursued in good faith; bad-faith litigation removes the privilege |
| Whether the jury had sufficient evidence of intentional interference and business expectancies | Havilah: evidence (marketing, contracts, agents, experts) showed prospective sales and that lis pendens halted deals | VLK: no proof of specific relationships or knowledge, damages speculative | Sufficient evidence existed for jury to find Havilah had commercially reasonable expectancies and VLK knew of and intentionally interfered |
| Proper measure of damages for wrongful lis pendens | Havilah: entitled to consequential damages, including diminution in fair market value during pendency | VLK: fair-market diminution speculative; cannot assume all properties would have sold | Court approved fair-market-value diminution method (difference between value at filing and at release) as consistent with Restatement and precedent |
| Whether filing 31 lis pendens satisfies "special injury" for malicious prosecution as a matter of law | Havilah: multiple lis pendens caused economic injury beyond ordinary suits and should qualify as special injury | VLK: lis pendens are routine in property suits; losses are incidental; no special injury | Filing lis pendens (even 31) does not as a matter of law constitute the narrow D.C. "special injury" required for malicious prosecution; summary judgment proper |
Key Cases Cited
- Ammerman v. Newman, 384 A.2d 637 (D.C. 1978) (defines D.C. "special injury" rule and policy favoring access to courts)
- Sorrells v. Garfinckel’s, Brooks Brothers, Miller & Rhoads, Inc., 565 A.2d 285 (D.C. 1989) (adopts Restatement approach to improper interference and the importance of motive)
- Oparaugo v. Watts, 884 A.2d 63 (D.C. 2005) (questions of good faith in litigation are factual for the jury)
- Carr v. Brown, 395 A.2d 79 (D.C. 1978) (protects commercially reasonable business expectancies from unjustified interference)
- Westfield Dev. Co. v. Rifle Inv. Assocs., 786 P.2d 1112 (Colo. 1990) (adopts conditional-privilege approach grounded in the Restatement)
- Albertson v. Raboff, 295 P.2d 405 (Cal. 1956) (leading case adopting absolute privilege for lis pendens filings)
- Askari v. R & R Land Co., 225 Cal. Rptr. 285 (Cal. Ct. App. 1986) (endorses diminution-in-value damages for wrongful lis pendens)