36 N.E.3d 1074
Ind. Ct. App.2015Background
- Michael and Doreen Bixeman own a house in the Hunter’s Run subdivision subject to a Declaration and Rules requiring written leases, a minimum initial six‑month term, and that a copy of the lease (including a tenant's acknowledgment of receipt of the Declaration) be provided to the association at least 15 days before the lease start.
- In October 2012 the Bixemans rented their house effective October 1, did not provide 15 days’ notice, and the lease lacked the tenant acknowledgment clause.
- Hunter’s Run sent a demand and scheduled a hearing with seven days’ notice; the Bixemans could not attend and were not allowed to appear by phone. After not receiving what it deemed adequate written evidence, Hunter’s Run imposed a $250 sanction, which went unpaid and resulted in a $2,525 lien being recorded against the property.
- The Bixemans sued to release the lien and alleged slander of title; Hunter’s Run counterclaimed to enforce and foreclose the lien. The trial court initially ordered the sanction paid and the lien released, later declaring the sanction invalid but calling the slander claim moot.
- On appeal the court addressed (1) whether the association followed the sanction procedures in the Declaration and (2) whether recording the lien with knowledge of its invalidity constituted slander of title.
Issues
| Issue | Plaintiff's Argument (Bixeman) | Defendant's Argument (Hunter’s Run) | Held |
|---|---|---|---|
| Validity of sanction under Declaration’s procedures | Association failed to follow the required notice/hearing/minutes, so sanction is invalid | Substantial compliance or reliance on counsel excuses deviation | Held: Sanction invalid — Declaration terms are binding; substantial compliance not enough for omitted essential steps |
| Whether lien recordation supports slander of title | Recording lien after being told it was invalid was malicious and caused pecuniary loss (legal fees, inability to market) | Lien was recorded as enforcement of sanction; release moots any tort claim | Held: Recording the invalid lien with knowledge was malicious; slander of title survives lien release; summary judgment for Bixemans on liability for slander of title |
| Damages for slander of title (including attorney fees) | Entitled to damages and attorney fees under applicable statute | No specific dispute on entitlement but trial court made no findings | Held: Case remanded to determine damages and attorney fees; trial court to enter findings |
| Whether ‘‘substantial compliance’’ doctrine applies | N/A | Substantial compliance should cure defects in procedure | Held: Doctrine inapplicable where the Declaration imposes essential procedural conditions (e.g., required waiting periods); cannot ignore agreed process |
Key Cases Cited
- Villas W. II of Willowridge Homeowners Ass’n, Inc. v. McGlothin, 885 N.E.2d 1274 (Ind. 2008) (restrictive covenants treated as contract between grantor and grantee)
- Gibson v. Neu, 867 N.E.2d 188 (Ind. Ct. App. 2007) (explaining substantial‑compliance test)
- Dove v. Rose Acre Farms, Inc., 434 N.E.2d 931 (Ind. Ct. App. 1982) (substantial compliance formulation cited)
- Walsh & Kelly, Inc. v. Int’l Contractors, Inc., 943 N.E.2d 394 (Ind. Ct. App. 2011) (refusal to release an invalid lien after notice can establish malice for slander of title)
- Display Fixtures Co. v. R. L. Hatcher, Inc., 438 N.E.2d 26 (Ind. Ct. App. 1982) (elements of slander of title: false statement, malice, pecuniary loss)
- Holland v. Steele, 961 N.E.2d 516 (Ind. Ct. App. 2012) (malice defined as knowledge of falsity or reckless disregard)
- Keilbach v. McCullough, 669 N.E.2d 1052 (Ind. Ct. App. 1996) (attorney fees are proper measure of damages in slander of title contexts)
- Drenter v. Duitz, 883 N.E.2d 1194 (Ind. Ct. App. 2008) (enforcement of subdivision covenants requires following covenant procedures)