*2 BEAM, R. GIBSON and Before JOHN MORRIS SHEPPARD Judges, Circuit
ARNOLD,* Judge. District
* ap- ARNOLD, Judge ARNOLD was case was S. United The HONORABLE MORRIS submitted. Appeals. Judge pointed Eighth District of Circuit Court for the Western District States Arkansas, sitting by designation. Since this ARNOLD, contract; MORRIS SHEPPARD execution of the a second earnest $15,000 Judge. money deposit District September 9, 1986; and the balance due of appeal This is an of a for slan- closing, specified which was as October against der of title Marvin Mueller as coun- *3 1986. The sale acknowledged re- in terdefendant and favor of James Abdnor ceipt $5,000 (The of the initial deposit. of thе Small Business Administration disappeared; event, check has any in it was (“SBA”). The court reverses the cashed.) never The trial court found that of the to damages only. district court1 as parties sometime after signed both had Mr. Weaver wrote on the contract that the con- I. tract was “Extended for Possession.” The guaranteed In SBA loan to Man- trial court further found alleged that this co, guaran- Inc. The collateral for the SBA extension by was neither authorized Mr. parcels tee was in two land Miller Coun- Westbrook nor executed in accordance with Missouri, ty, collectively known as requirements. SBA property. By April, “Max Allen’s Zoo” that, The trial September, court found in default, the loan was in and SBA 1986, Mr. Mueller failed to tender the addi- prepared guarantee to foreclose on its and money required tional earnest by the con- June, 1985, acquire In collateral. tract. testimony His was that Mr. Weaver appraised large parcel Hendren James had told him that the parcel smaller still $293,250 $66,000. parcel at and the small at acquired needed by to be SBA and that the June, 1986, Joyce appraised In Hilton money deposit second earnest did not need $140,297 large parcel par- at and the small acquired parcel. to be made SBA until $19,400. July, cel at In SBA foreclos- Based on representations Mr. Weaver’s large parcel ed on the and listed it for sale. on, the deal was still Mr. Mueller No takers were found at an auction in expended $1,000 upkeep in late 1986and August, 1986. $10,000 paid the first half of 1987. He December, (which SBA not purchased
Mr. was proper- Mueller had SBA April, 1987) $5,000 cashed until and summer, past. During ties in the Cor- March, Septem- 1987. Sometime Weaver, SBA, between employee nelius ber, 1986, March, 1987, Mr. Westbrook approached buying Marvin Mueller about told Mr. Weaver to tell Mr. Mueller that property. Mr. Mueller looked at both expired the contract had of Mr. because parcels, evidently believing that SBA had Mueller’s failure to tender the additional time, both; foreclosed on at the Mr. Weav- money, earnest but Mr. Weaver did not do evidently er believed that as well. In Au- July, until In so at least June or gust, signed Mr. Mueller a contract June, 1987, Mr. Mueller а second submitted purchase on which the was proposed large purchase contract for of the only “Legal Description described as parcel. July, rejected In SBA AKA Govern Max Allen’s Zoo.” The trial August, offer. In Mr. Mueller re- legal description court found that no was original corded his sale contract with the attached to the sale contract. The contract clerk, county creating a cloud on the thus signed Darryl was on behalf of SBA property. title of the SBA Westbrook, supervisor. Mr. Weaver’s The trial court found that when the contract October, 1987, sued SBA Mr. Mueller signed, Mr. Mueller believed that it of con- in federal district court for breach parcels that, related to both unknown tract, counterclaimed for slander Mueller, Mr. Westbrook believed quiet title title. A trial and for bench larger November, 1989, that the contract related May, and in was held parcel. judgment. court entered its the trial complaint,
The terms of the contract called for an As to the of contract breach money deposit no contract had initial earnеst on the trial court held that (E.D.Mo.1991). published 1. The district court’s decision was reliance on expenditures in reasonable of the mutual mistake existed because ever whether the trial representations; being sold. SBA’s to the land parties as that the sale contract correctly held court held that even if a further trial court “false”; the standard of whether formed, SBA had contract had been slander of Missouri law for proof under right to rescind because waived its of the evidence by preponderance immediately advise it did not evidence; convincing by clear and contract. The trial expiration of the improperly con- trial court whether the assurances court further found damages; regarding SBA’s sidered to Mr. Mueller that given by Mr. Weaver court’s whether the trial in force were not was still the contract on insuf- consequential damages was based as the could not serve basis authorized and *4 ficient evidence. The trial estoppel against SBA. for an although that Mr. further found court A. property listed the Mueller had himself $1,000 in associated sale and had incurred Mr. Mueller The trial court found that profits prove failed to lost expenses, he had $1,000 upkeep of paid expenses in had Holding certainty. to a reasonable and quarter the in the last of 1986 on Mr. Weaver’s as- Mr. Mueller’s reliance first half of 1987. The trial court also the however, reasonable, 1987, surances was by May, Mr. Mueller had found that acted to his detriment that Mr. Mueller had $15,000 properly that could not sent assurances, the trial as a result of those applied other debt. All of these Mr. Mueller was entitled cоurt found that held, in expenditures, the trial court were $1,000 expenses and the to recover the on Mr. assurances that a reliance Weaver’s $15,000 paid he had to SBA. Mr. re- contract still existed. Mueller’s reasonable, held, the trial court liance was counterclaim, court the trial As to SBA’s light “longstanding business rela- knew at the time he found that Mr. Mueller tionship” Mr. Mueller and Mr. between August, contract that it recorded the Weaver. found, fur- expired. The trial court had ther, had acted with mal- that Mr. Mueller argues that he could published a document iсe and had malice, required as not have acted with upon large the title of the placed a cloud title,2 found, if, slander of as the trial court court further found that parcel. The trial Mr. assurances upon his reliance Weaver’s prospective by that land to a a sale SBA of argues by late was reasonable. SBA account of the re- buyer through on fell his July, Mr. Mueller knew that sec contract, cording Mueller’s which of Mr. proposed rejected. contract had been ond buyer by prospective was discovered argues that Mr. Mueller’s own SBA further The trial court during a title search. testimony he at the time admits that knew $100,- approximately damages awarded that “SBA he recorded his sale contract SBA, profits, on lost lost 000 to based “in it invalid” and that he did so considered interest, expenses. Only the counter- stop” efforts to sell the order to SBA’s this court. claim is before replies property to others. Mr. Mueller good-faith that he had
that he had a belief by property, an interest in the as evidenced II. of his the fact that SBA still appeal issues оn There are five —whether money. finding Mr. the trial court’s Mueller “An action for slander recording his sale con- acted with malice malicious intent. To cannot exist without a tract its was inconsistent with malice, the evidence existence of reimbursement infer the Mr. Mueller was entitled to Bank, “(1) Co. Mercantile of title are: Franklin 2. elements of slander false; (2) Long, they (citing (Mo.App.1987) must be mali- Butts v. 94 Mo. words must be ciously published; (3) they pecu- (1902)). result in must App. 68 S.W. niary Tongay injury plaintiff." v. loss or support a payment ... must reasonable inference to lack оf money, earnest Mr. representation that the not was with Weaver did not do so until at least June or excuse, legal justification out but was July, By August, 1987.4 any rate, Mr. innocently or ignorantly not made.” Ton Mueller knew that the contract had ex- Bank, gay v. Franklin Co. Mercantile 735 pired. Mr. Mueller filed the contract with (Mo.App.1987) (citing S.W.2d Long the Recorder of August 19, Deeds on Rucker, 572,149 166 Mo.App. S.W. The court found that filing date, (1912)). may “Such inference rest on Mueller was aware that the contract was a foundation circumstantial evidence and Hence, invalid.5 thеre is no inconsistency proof probable of a lack of cause would between the conclusions expendi- that the support an representa inference that the tures were reasonable at they the time innocently tion stupidi made out of made, were and that the recording was ty ignorance but was known to be malicious recorded, at the time it was be- false.” Id. The court concluded that Mr. cause between payments and the re- Mueller acted maliciously on the based cording, if any contraсt had findings (1) that he had been notified of the existed, had validity. lost its expiration that his *5 postdated check and his second offer to
purchase property the rejected by B. SBA, presented before he the contract for The trial court found that because Mr. filing to the County Miller Recorder of Mueller filed the August sale contract in he Deeds.3 oppor The trial court had the best expired knew that it had “and was there- tunity to assess credibility the of the wit fore false” as a slander of title. Mr. Muel- nesses, Mueller, including Mr. and the trial argues ler nothing in the contract it- findings court’s may of fact nоt be dis self was false.6 goes He into some detail clearly turbed unless erroneous. Fed. contending m that an 52(a). affirmation of his Upon thorough R.Civ.P. a review of signature record, on the by notary contract made a the the court is of the view that the public findings false, did not make of the trial court the contract clearly are not Furthermore, erroneous. since the based on the affirmation tri was of his findings, al signature court’s the court in was correct acknowledgment was not an its conclusion that Mr. Mueller’s behavior notary prеsent that the had been when the was sufficient to find that he filed the argues was executed. SBA probable contract without cause. in order to be a false document under Mis- law, souri only the contract need have had is, moreover, Such a conclusion not incon- potential upon the to cast doubt who owned sistent the with conclusion that Mr. Mueller property. the SBA thus contends that the reasonably expended $16,000 in reliance on contract, being record, gave filed of the representations the agent, of SBA’s Mr. impression that Mr. Mueller had an interest timing Weaver. The important here. in property. replies the Mr. Mueller By the middle of Mr. Mueller had the contract itself was not denominated a spent property on the that he lien, trust, thought a deed of or a note of buying. he was kind expenditure and that it was not seems reasonable evident from the face of because he then believed that he still had a the document that deal. While Mr. its terms had not been Weav- supervisor er’s complied instructed him to tell He argues with. further that the Mueller that expired the contract had requirement due in that a law document create (Finding 33), argues 3. of Fact # 6.Mr. Mueller that the sale contract in (Conclusion 10). of Law # the real records acted aas sort of lis pendens prospective buyers that would alert 24) (Con- (Finding Id. at property, of Fact # and 558 the fact that the or the was sue, 6). clusion of Law # actually “in honest contention." He did not however, until two after recorded months he the (Conclusion 5. Id. at 559 of Law # sale contract. in the and would be a hindrance transfer question the goes uрon a cloud The trial court did not property.”).9 its the not to falseness. damages and in the contract that the words need find are an element “False words” false, finding correct were and was in itself Similarly, recordation of title.7
slander
falsity
element was satisfied.
a claim
states
“false” instrument
equated
The trial court
of title.8
slander
C.
rejected Mr.
invalidity, and
falsity with
trial
argues that
the words
that because
argument
Mueller’s
“preponder
use a
court
incorrect to
the falsehood
not false
contract were
in the
the slandеr of title
in
ance” standard
The court Green-
not met.
element
the correct stan
contends that
of title claim claim. He
a slander
suggested that
lake
higher
convincing.” The
dard is “clear and
wrongful interfer
thought of as
be
should
standard, however,
in
apply
does not
right
free
“Plaintiff had
with title.
ence
case,
in
action
ordinary defamation
proper
sell,
or incumber
ly to
transfer
individual, specifically, a
brought by an
mentioned,
right has been
ty
[and]
public figure.10 Tradi
public
or a
maliciously
official
obstructed
wrongfully and
tionally
a standard fоr fact
used as
by defendants’ action
with
interfered
cases,
standard is
used
equity
also
statement on
alleged false
placing the
disfavored,
action is
the cause of
Co. where
Investment
public record.” Greenlake
inhibiting
(Mo.
possibility of
e.g., to
Swarthout,
avoid
figures
public
iss
public
Here,
court’s rea
discussion
the district
App.1942).
sound,
considerations are
ues.11 These
absent
because
soning
appear
would
case,
however. While
slander of title
when known a
recording an invalid
*6
discussing with
filing a
there
no Missouri cases
invalid,
same effect as
are
has the
to be
proof
of
for slan
particularity the standard
v. Pete &
Sanders
false contract. See
title,
Approved Instruc
844,
Missouri
Inc.,
845 der of
769
Garage,
S.W.2d
Sons
(“MAI”)
recognize that the
seem to
(“It
question
not
tions
a
(Mo.App.1989)
only
convincing
applies
clear
standard
was techni
and
not the
or
whether
[instrument]
figure
public
involving public
in cases
a
effective,
it would have
but whether
cally
3.05,
Although
MAI
3.06.
creating
on the title
official.12 See
a cloud
the effect
928,
requires
Golden,
against public figure
(Mo.App.
or offiсial
ice
Euge
S.W.2d
932
v.
551
7.
Torts,
allege
"convincing clarity’’);
Sec-
1977)
"false words ...
Restatement of
(plaintiff must
ond,
580B,
(1977) ("There
pecu
maliciously
j,
in his
which resulted
at 229
§
uttered
comment
Rucker, Mo.App.
loss") (citing Long
166
niary
572,
proof
v.
in the
has
no indication
fault
(1912)); Tongay Franklin
v.
S.W. 1051
ordinary
149
the un-
case must meet
defamation
766,
(Mo.
Bank,
770
Mercantile
convincing proof
Co.
‘clear and
usual standard of
687,
Long, Mo.App.
(citing
94
App.1987)
Butts
required
Supreme
to
Court has held
be
754,
(1902)).
755
68 S.W.
disregard
showing knowledge
as
or reckless
by
public
a
a
falsity
in an action
official
932;
Invest-
Euge,
at
S.W.2d
Greenlake
551
public figure.”).
697,
Swarthout, 161
699
S.W.2d
Co. v.
ment
(Mo.App.1942).
al., Treatise on Con-
D. Rotunda et
11. 3 Ronald
protests
know
that he could not
9. Mr. Mueller
§
and Procedure
20.-
Law: Substance
stitutional
until the court
the contract
invalid
Gertz,
341,
whether
33(c)
(1986);
94
see
418 U.S.
Greenlake also
it was not. But
ruled that
had
suggests
("The
requires
First Amendment
S.Ct. at 3007
filing
liability
will attach
pro-
protect
some falsehood in order
that we
unless
or fraudulent
instrument
false
matters.”).
speech that
tect
ordinary person from the
clearly apparent
so infirm that it
that it is
of the instrument
face
merely require
jurisdictions
from other
12. Cases
S.W.2d at 669.
the title. See 161
not affect
could
elements of slander
that the essential
See,
by
preponderance
323,
proved
of evidence.
Inc.,
a
Welch,
U.S.
418
v. Robert
10. See Gertz
Trust,
Banking
673
e.g.,
&
(1974)
Bar Harbor
2997, 3008,
Fischer
342,
law attaches duties and liabilities and
D.
therefore is
hearsay.
not
See McCor
Evidence,
mick on
249 at 101.
partic
In
§
trial,
put
At
on evidence to
ular, evidence
profits
of lost
based on a
support its claim
damages.
for
SBA of
subject
contract is not
to the hearsay rule
(Exh. U)
fered a contract
correspon
and
because such evidence concerns the exist
discussing
dence
changes in the contract’s
ence of the contractual terms rather than
terms and
attorney
conditions from an
an assertion of their
Wig
“truth.”
6See
prospective
(Exh.
buyer, Jack Jordan
W
more,
(set
Evidence
1770 at 259-60 n. 1
§
Z).
and
The deal with Mr. Jordan fell
ting forth the text of United States Fideli
through when a title sеarch revealed that
ty
Guaranty
Davis,
and
Co. v.
3 Ariz.App.
Mr. Mueller’s contract had been recorded.
259, 261,
(1966)).
413 P.2d
SBA also offered a contract
it
between
addition, various
e.g.,
communications —
person
eventually bought
prop
who
conversations, letters,
telegram
s —rele
erty in order to show the difference be
making
vant to the
of the contract are also
original
tween the amount offered
hearsay.
See id. at
413 P.2d at
prospect and the
received when the
amount
590. The contracts and the letters from
(Exh. BBB).
finally
sold
To
attorney
Jordan’s
were therefore not hear
part
expenses
show
of its transaction
say
they
when
are offered to show the
sale,
the actual
SBA also offered an auc making of the
potential
contract and the
(Exh. EEE).
trial,
tion contract
At
loss of benefit to SBA.
challenged
Mueller
the admission of the
contracts and the two letters from Mr.
E.
attorney, objecting
Jordan’s
they
were
brief,
In his
Mr. Mueller makes an ob-
(T.
202-03,
211-12,
lique
sufficiency
reference to the
*7
SBA defended the contracts and letters as
damages
evidence of
due to the loss of the
803(6).
records under
business
Fed.R.Evid.
argument,
Jordan contract. At oral
defen-
hearsay
The
rule excludes out-
very briefly argued
dant
that because a
prove
of-court assertions used to
the truth
financing contingency existed in the Jordan
acts,
of the facts
asserted
them. Verbal
X,
see Exhs. W and
and because
however,
hearsay
they
are not
because
are
prove
did not
SBA
that Jordan in fact had
prove
not assertions and not adduced to
the
financing,
prove
SBA failed to
the
truth of the matter.
2
Strоng
See John W.
fully
Jordan contract was a
valid contract.
al.,
Evidence,
et McCormick on
249 at
agreement
therefore,
The
could not
the ar-
§
(4th
1992);
Wigmore,
101
ed.
6
H.
John
gument runs, support
of dam-
(James
Evidence
1770 at 259
H. Chad
ages.
provides
§
Mueller
no law on this
1976).
bourn rev. ed.
The Federal
point,
Rules of
asserting
other than
failed
SBA
Evidence “exclude from
the
damages.13
entire
to sustain its burden as to
category
parts
27, 1987,
of ‘verbal acts’ and
August
‘verbal
court found
SBA
Co.,
(2d Cir.1974);
Jasperson
Pub.
entered
$238,000;
prevented
persuaded by
the court
or
property for
also
the
the malicious and unwarranted interference
failed to close
found that the contract
be-
Tri-Continental Leas-
party.”
aof
third
filing
Mueller contract
cause
Neidhardt,
ing Co. v.
540 S.W.2d
216
Deeds.14
the
the Recorder of
On
ba-
with
(Mo.App.1976) (quoting United States v.
findings,
the court concluded
sis of these
Co.,
Newbury Mfg.
36
605
pecuniary
its
loss.15
that SBA established
Tri-Continental,
(D.Mass.1941)).
Under
There are no Missouri slander
questions:
Missouri courts ask two
did
aspect
this
cases that bear on
of title
plaintiffs actively
affirmatively
take
interference
damages,
but tortious
law
breach;
so, (2)
steps to induce the
and if
title,
slander of
contract is similar to
with
performed
would the contracts have been
relevant
and cases of this latter sort offer
plaintiffs’
absent
interference?
In that
damages,
guidance.16 Any
whether based
case,
plaintiff’s
claim failed the but-for
expectancy,17
must be
on a contract
test because the evidence showed that de-
and,
certainty,
if
proved with reasonable
fendant had decided
to breach
contract was ill-fated even ab
the Jordan
anyway, and the interference could not be
interference,
not have sus
would
sent
characterized as a but-for cause.
damages,
have sustained
tained
or would
S.W.2d at 216.
Liability
different amount.
them some
manifestly unjust
It is
to find dam
theory cannot
a tortious interference
under
ages speculative
wrong
where the
com
conjecture,
predicated upon speculation,
be
plained
speculative.
of itself makes them
guesswork,
no fact essential to
sub
Murray,
In Mills v.
(Mo.App.
mined due to the actions of Mr. Mueller. case, entirely possi-
In our it is of course discouraged ble that Mr. Mueller’s actions seeking financing. Mr. Jordan from MOORE, Appellant, Derrick D. event, Mr. Mueller’s tort would have damages the event that caused the INDUSTRIES, COLUMBIA PICTURES speculative. nothing But there is in this INC., corporation; a Delaware MCA record from which the trial court could Records, Inc., corporation; a California provid- conclude that Mr. Mueller’s actions La’Face, Inc., corporation; a California prospective ed such a disincentive to the Kenny Edmonds, Antonio Reid and purchaser that he the search for abandoned Babyface, Ap also known as L.A. and is, true, a loan. There a letter in pellees. evidence to the effect that Mr. Jordan dis- financing continued his effort to obtain be- No. 91-2844. contract; cause Mr. Mueller filed his Appeals, United States Court of objected
this statement is and was Eighth Circuit. to as such.18 11, 1992. Submitted Feb. circumstances, In these we are un Aug. Decided say plaintiff that the made out a able Rehearing Rehearing and En Banc ability case on Mr. submissible Jordan’s 9, 1992. Denied Oct. perform his an essential element pre case. The trial court cannot SBA’s perform, purchaser’s ability sume a nor ability
could the court infer from though say proof why 18. Even Business Administra- when considered as Mr. Jor Small *9 might money go through pursuant tion lend to the con- dan felt he could not action, with trans Jordan, quite pos- tract executed Jack for it is thus considered for the truth of asserted, might pay sible that Mr. Jordan have tо the matter above-quoted portion not as a verbal act. The having SBA without the land because of the of this letter is Thus, lacking guarantees trustworthi contract. we feel that until statement [Mueller] resolved, generally with Mr. ness associated with the various ex Mueller can be rule, steps ceptions United States v. Mr. Jordan can take no further toward Moore, (5th Cir.1984), purchase property. of this 748 F.2d Washburn, (letter receipt possession Esq. of a letter does not Exh. Z from William F. mere Westbrook, therein from the to Darrell W. dated October inoculate assertions contained hearsay properly part excep rule under the business records This letter was admitted as . tion, 803(6) negotiations but is hear- Fed.R.Evid.