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Chicago Title & Trust v. Levine: Attorney Liable for Slander of Title

An Illinois appellate court has considered whether an attorney could be sued for slander of title when the attorney placed a lien on property in direct violation of a court order.

In 1993, Susan Fasse ("Fasse") filed a lawsuit in Georgia seeking to dissolve her common-law marriage to Thomas Cassidy ("Cassidy"). David Levine ("Attorney") was the attorney who represented Cassidy in the lawsuit. One issue in the lawsuit was the ownership of a farm ("Farm") located in Illinois that was held in a trust for which Chicago Title ("Trustee") served as trustee and the beneficial interest was held by Television Cablecasting, Inc. ("TCI"). TCI was a corporation whose shares were owned by Cassidy. There was a standing order in the lawsuit that the parties were not allowed to encumber any of the property which belonged to the other parties involved with the litigation.

In May 1995, the Attorney filed an attorney's lien against the Farm for $40,000, the alleged amount of fees he had incurred. A week later, a jury awarded to Fasse all of Cassidy's stock in TCI. Part of the award also required Cassidy to satisfy all liens on the Farm. The Attorney then sent a $40,000 bill to Cassidy. The Trustee filed a lawsuit against the Attorney for slander of title and sought a declaration that the lien filed against the property was invalid. The Attorney filed a counterclaim against the Trustee, alleging that a subsequent transfer of the beneficial interest by Fasse from TCI to another trust was fraudulent. The trial court ruled in favor of the Trustee, declaring the lien invalid and rejecting the Attorney's counterclaim. A jury trial was held on the slander of title allegations, and the jury awarded the Trustee its attorney fees and also punitive damages of $30,000. The Attorney appealed.

The Appellate Court of Illinois, Third District, affirmed the ruling of the trial court. An action for slander of title requires a showing that a party made a "false and malicious publication" which disparaged another's title to property and caused damage to the titleholder. To prove that a party acted with malice (a requirement), a party must show that another acted with knowledge that the disparaging statements were false or were made with reckless disregard of the truth or falsity of the statements.

The court found that the Attorney had acted with reckless disregard for the truth when he filed the lien. First, the Attorney admitted that he performed no research into the Illinois Attorney's Lien Act ("Act"). Testimony at trial stated that a minimum amount of research would have revealed that the lien was invalid. Second, the Attorney failed to follow any of the procedural requirements set forth in the Act, such as identifying who his client was and who the lien was being asserted against or itemizing the amount of his lien. A backdated client representation agreement signed by Cassidy purported to identify the Trustee as the Attorney's client, yet the Attorney never performed any work on behalf of the Trustee. Finally, the Attorney directly violated a court order not to encumber property held by either party by filing the lien only a week before the Georgia case was decided by a jury. All of the this led the court to conclude that the Attorney had acted with malice, and so affirmed the award in favor of the Trustee. The court also affirmed the dismissal of the counterclaim, as the Attorney had filed a separate lawsuit in Georgia on this issue and so the court did not need to consider that issue.

Chicago Title & Trust v. Levine, 789 N.E.2d 769 (Ill. App. Ct. 2002).