In this first-impression case, a Fairfax Circuit Court applies a two-year statute of limitations to a claim for slander of title and dismisses as time-barred a woman’s claim against Wells Fargo based on her husband’s alleged forgery of her signature on deeds of trust when he refinanced their home prior to his death.
Plaintiff Ann Koz and her husband Joe Koz owned a home in Alexandria as tenants by the entirety. The couple became estranged in 2001. In 2006, Joe arranged to refinance the home and executed two notes for an amount totaling $810,000 and two deeds of trust purporting to secure the notes with the property. It is alleged the closing documents were notarized without Joe Koz or Ann Koz present. Both deeds were recorded in the Fairfax County Land Records Office in June 2006. Ann’s signature does not appear on the notes but does appear on the deeds of trust. She alleges her signature was forged on the deeds of trust. She says she became aware of the refinance and alleged forgery in June 2006 when she received an escrow refund check.
She claims Joe assured her she would not be responsible for the loans because her named did not appear on the notes. Joe Koz died in April 2010 and Ann Koz continued to pay on the loans until obtaining counsel in August 2010. She filed her complaint Dec. 20, 2010, seeking equitable relief and damages under various theories including slander of title.
In Virginia, there is no controlling authority indicating which statute of limitations applies to slander of title actions. Two courts have addressed the issue, but neither has reached a definitive conclusion. Various courts around the country apply the statute of limitations period for defamation. At common law, slander was regarded as distinct from personal defamation.
The present case involves allegations of “falsehoods which are not personally defamatory, and yet cause pecuniary loss.” This court finds that slander of title is better categorized as a form of interference with economic relations, and the one-year statute of limitations for defamation is not applicable.
A third option is the five-year statute of limitations applicable to injury to property under Va. Code § 8.01-243(B). For purposes of this statute, the appropriate test is whether the injury flowed from conduct directed at the property, rather than conduct directed at the person. Conduct which does not alter the condition or availability for use of the property is, by definition, directed at the person, and does not constitute injury to property.
Here, plaintiff’s property remains in the same condition and available for the same use as it was before the deeds of trust were recorded. The only change has been to the equity she holds in the property. The Supreme Court of Virginia has never held that a loss of equity in real property amounts to injury to property.
This court is of the opinion the Supreme Court of Virginia would not expand the case law to reach this conclusion. As such a pecuniary loss is a personal injury, the five-year statute of limitations does not apply.
The court concludes Va. Code § 8.01-248 prescribes a two-year statute of limitations for slander of title.
The deed of trust was recorded in June 2006 and discovered by plaintiff several weeks later. Unless the alleged conduct qualifies as a continuing tort, plaintiff is barred from bringing this action.
In Virginia, a cause of action accrues from the date the injury is sustained and not when the resulting damage is discovered, unless otherwise prescribed by statute. There is a distinction between continued tortious behavior and continued harm resulting from a single tortious act, to which the statute of limitations will attach at the time of injury.
Although the deeds of trust remain in the county land records, this is merely the continuing effect of a single act. Plaintiff’s claim is not for a true continuing tort. Under the general rule that the statute of limitations attaches at the time of the injury, the statute of limitations attached to plaintiff’s slander of title claim at the time the deeds of trust were recorded, because her injury, int eh form of damages to the equity she held in the property, was sustained at that moment.
This court concludes the cause of action accrued upon the recording of the deeds of trust and the limitation period commenced on that date. It follows that the cause of action for slander of title is barred and dismissed.
Koz v. Wells Fargo Home Mtge. (Maxfield) No. CL 2010-17795, Aug. 4, 2011; Fairfax Cir.Ct.; James B. Kinsel for plaintiff, Mary C. Zinsner for Wells Fargo, Jennifer K. Mammen for CitiMortgage Inc., Garth M. Wainman for Excel Title Corp. VLW 011-8-179, 6 pp.