we conclude the trial court did not err in sustaining the City's demurrer to Finch's
complaint without leave to amend, and we affirm the judgment.
II
BACKGROUND
A
According to the allegations in the complaint, in 1996 Brown Field Aviation
Ventures leased space at Brown Field Airport from the City under a long-term, master
lease agreement. Brown Field Aviation Ventures subleased the space to Bearden
Aviation, Inc. (Bearden), and Bearden subleased it to Finch. Finch occupied the space
with three airplane hangars. Lancair Corporation (Lancair) later purchased Bearden's
leasehold.
1 All further statutory references are to the Government Code unless otherwise stated. 2
In 2005 the City amended and restated the master lease. Section 6.9, subdivision
(a) (Section 6.9(a)) of the lease provided: "Any and all improvements, trade fixtures,
structures, and installations or additions to the premises now existing or constructed on
the premises by LESSEE shall at lease expiration or termination be deemed to be part of
the premises and shall become, at the CITY'S option, CITY'S property, free of all liens
and claims except otherwise provided in this lease."
In 2010 in the context of an unrelated dispute between a third-party lessee and a
third-party sublessee over the ownership of a hangar on the third-party lessee's leasehold,
the City's airport development coordinator stated in a letter that "the improvements on the
leasehold are the property of the [third-party lessee] until the expiration or termination of
the lease, at which point they become the property of the City." Three years later, Finch
attempted to enter a new lease directly with the City and remove its hangars from
Lancair's leasehold; however, Lancair claimed to own and control the hangars. Lancair
based its position on the airport development director's letter.
Finch subsequently filed a complaint against Lancair alleging causes of action for
quiet title, declaratory relief, intentional interference with economic advantage,
conversion, and retaliatory eviction. Lancair responded by filing an unlawful detainer
complaint. The court consolidated the two actions, and following a bench trial, issued a
judgment in favor of Finch on Finch's quiet title and declaratory relief causes of action,
against Finch on Finch's other causes of action, and in favor of Lancair on Lancair's
unlawful detainer cause of action. Of relevance here, the court found, notwithstanding
Section 6.9(a), Finch's hangers were removable trade fixtures and belonged to Finch.
3
Although both parties filed a motion for attorney fees, the court denied the
motions, finding neither party prevailed sufficiently to warrant an attorney fee award.
Under the doctrine of tort of another, Finch filed this action for slander of title to recoup
the attorney fees and other expenditures it incurred as a result of the litigation with
Lancair.
B
The City demurred to the complaint on the ground it failed to state a cause of
action. (Code Civ. Proc., § 430.10, subd. (e).) Among other arguments, the City asserted
it is absolutely immune from liability under section 818.8. The City also asserted the
allegations in the complaint did not support a cause of action for slander of title.2 The
court found the City was immune from liability under section 818.8 and related section
822.2, and it sustained the City's demurrer without leave to amend.
III
DISCUSSION
The standards for reviewing a judgment of dismissal following the sustaining of a
demurrer without leave to amend are well settled. " ' "We treat the demurrer as admitting
all material facts properly pleaded, but not contentions, deductions or conclusions of fact
or law. [Citation.] We also consider matters which may be judicially noticed."
2 The City raised this issue for the first time in its reply brief below. Finch objected to the tactic and requested the court either disregard the issue or provide Finch an opportunity to fully respond. The court did not allow additional briefing nor did it address the issue in its ruling. Nonetheless, both parties have fully briefed the issue on appeal. 4
[Citation.] Further, we give the complaint a reasonable interpretation, reading it as a
whole and its parts in their context. [Citation.] When a demurrer is sustained, we
determine whether the complaint states facts sufficient to constitute a cause of action.
[Citation.] And when it is sustained without leave to amend, we decide whether there is a
reasonable possibility that the defect can be cured by amendment: if it can be, the trial
court has abused its discretion and we reverse; if not, there has been no abuse of
discretion and we affirm. [Citations.] The burden of proving such reasonable possibility
is squarely on the plaintiff.' " (Simonelli v. City of Carmel-By-The-Sea (2015) 240
Finch contends the court erred in finding the immunities in sections 818.8 and
822.2 applied to Finch's slander of title cause of actions. We agree.
Section 818.8 provides, "A public entity is not liable for an injury caused by
misrepresentation by an employee of the public entity, whether or not such
misrepresentation be negligent or intentional." Section 822.2 provides, "A public
employee acting in the scope of his employment is not liable for an injury caused by his
misrepresentation, whether or not such misrepresentation be negligent or intentional,
unless he is guilty of actual fraud, corruption or actual malice."
The Senate Legislative Committee's comments to section 818.8 explain, "This
section provides public entities with an absolute immunity from liability for negligent or
intentional misrepresentation. A similar immunity is provided public employees by
Section 822.2, except that an employee may be held liable if he is guilty of actual fraud,
5
corruption or actual malice." (Legis. Com. com., 32 pt.1 West's Ann. Cal. Gov. Code,
(2012 ed.) foll. § 818.8, p. 346.)
For purposes of these applying sections, "misrepresentation" narrowly refers to
causes of action that are forms of the common law tort of deceit (codified in Civ. Code,
§ 1709) and involve interferences with financial or commercial interests. (Johnson v.
State of California (1968) 69 Cal.2d 782, 800; City of Costa Mesa v. D'Alessio
Investments, LLC (2013) 214 Cal.App.4th 358, 383 (Costa Mesa); Curcini v. County of
Alameda (2008) 164 Cal.App.4th 629, 649.) California law generally recognizes four
forms of deceit: intentional misrepresentation, negligent misrepresentation, concealment,
and failure to perform a promise. (Civ. Code, §§ 1572, 1710; Schonfeld v. City of Vallejo
(1975) 50 Cal.App.3d 401, 408, disapproved of on another point by Morehart v. County
of Santa Barbara (1994) 7 Cal.4th 725, 743.) Courts have assumed the immunities in
sections 818.8 and 822.2 apply to all four forms of deceit. (Costa Mesa, supra, at p. 383;
Michael J. v. Los Angeles County Dept. of Adoptions (1988) 201 Cal.App.3d 859, 867–
868.)
Regardless, slander of title is not a form of deceit. It is a form of the separate
common law tort of disparagement, also sometimes referred to as injurious falsehood.3
3 Among the differences between deceit and disparagement, deceit involves a false or misleading communication to the plaintiff that induces the plaintiff to act while disparagement involves a false or misleading communication to a third party that induces the third party to act. (3 Dobbs, et. al., The Law of Torts (2d ed. 2016) § 656, pp. 615– 616; Rest.2d Torts, § 623A, com. e.) "What [further] distinguishes a claim of disparagement is that an injurious falsehood has been directed specifically at the plaintiff's business or product, derogating that business or product and thereby causing 6
(Compare Rest.2d Torts, § 525 with Rest.2d Torts, §§ 623A, 624; see 3 Dobbs et al., The
Law of Torts, supra, § 656, p. 617; see also Hartford, supra, 59 Cal.4th 277, 289–290.)
Consequently, the immunities in sections 818.8 and 822.2 do not apply to slander of title.
(See Costa Mesa, supra, 214 Cal.App.4th at p. 383.)
B
The absence of an applicable immunity does not end our inquiry as the City
alternatively asserts the complaint fails to adequately allege a slander of title cause of
action. We agree.
The Supreme Court has recently determined a viable disparagement claim, which
necessarily includes a slander of title claim, requires the existence of a "misleading
statement that (1) specifically refers to the plaintiff's product or business and (2) clearly
derogates that product or business. Each requirement must be satisfied by express
mention or by clear implication." (Hartford, supra, 59 Cal.4th at p. 284.) Neither
requirement is satisfied here.
According to the allegations in Finch's complaint, the statement at issue here was
contained in a letter to a specific third-party sublessee and opined the improvements on a
specific third-party lessee's leasehold were the property of the third-party lessee until the
lease expired, at which time the improvements would become the City's property. The
statement did not expressly mention Finch or Finch's property. In addition, because the
statement expressly referred to improvements on a specific third-party lessee's leasehold,
that plaintiff special damages." (Hartford Casualty Ins. Co. v. Swift Distribution, Inc. (2014) 59 Cal.4th 277, 294 (Hartford).) 7
not Lancair's leasehold, the statement did not clearly implicate Finch or Finch's property.
Lancair's unsuccessfully attempt to use the statement by analogy against Finch and
Finch's property is not sufficient to satisfy the specific reference and clear derogation
requirements established in the Hartford case. As Finch has not established it can cure
the pleading defect, we conclude the court did not err by sustaining the City's demurrer to
Finch's complaint without leave to amend.
IV
DISPOSITION
The judgment is affirmed. The City is awarded its costs on appeal.
MCCONNELL, P. J.
WE CONCUR:
HUFFMAN, J.
AARON, J.
8
AI Brief
AI-generated · verify before citing
Holding. The court held that while Government Code sections 818.8 and 822.2 do not provide immunity for slander of title claims, the plaintiff failed to state a viable cause of action because the alleged statement did not specifically refer to or derogate the plaintiff's property.
Issues
Do the immunities in Government Code sections 818.8 and 822.2 apply to a slander of title cause of action?
Did the plaintiff adequately allege a cause of action for slander of title?
Did the trial court err in sustaining the City's demurrer without leave to amend?
Disposition. affirmed
Quotations verified verbatim against the opinion
“We conclude the immunities in sections 818.8 and 822.2 do not apply to a slander of title cause of action.”
“We further conclude Finch did not otherwise adequately allege a slander of title cause of action nor did Finch demonstrate it could cure the pleading deficiencies by amendment.”
“The statement did not expressly mention Finch or Finch's property.”