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This case, Sumner Hill Homeowners Assoc., Inc. v. Rio Mesa Holdings, LLC (2012) 205 Cal.App.4th 999, involved two issues: whether homeowners had private access rights to the San Joaquin River, which turned on whether a portion of that river is “navigable” within the purview of the Harbors & Navigation Code, and whether a plaintiff claiming slander of title must prove damages beyond the mere payment of its attorneys’ fees.
Sumner Hill was a gated community located on part of the former Peck Ranch overlooking the San Joaquin River (“River”). Killkelly Road was located adjacent to Sumner Hill and within the same subdivision. In creating the Sumner Hill Subdivision, the former owner of the Peck Ranch (“Peck”) recorded a subdivision map which dedicated the subdivision’s streets and easements for public use (“1985 Map”). While it was Peck’s intention to give the Sumner Hill residents some right to access the River, he never formally did so. The residents of Sumner Hill, believing they had the right, used Killkelly Road to privately access the River for fifteen years, installing a locked gate and performing road maintenance. In 2003, Rio Mesa purchased the remainder of the Peck Ranch, asserted ownership rights in Killkelly Road, and eventually barred access to the Sumner Hill residents.
Sumner Hill filed suit in Madera County Superior Court seeking to quiet title to Killkelly Road and claiming damages for slander of title. Rio Mesa filed a cross-complaint, also to quiet title. The dispute turned on whether the portion of the River accessed by Killkelly Road constituted “navigable waters” and was therefore required to allow for public access. Under section 105 of the Harbors & Navigation Code, the portion of the River declared to be “navigable” did not include the Killkelly Road access point. Sumner Hill cited an 1856 California Supreme Court case (American River Water Co. v. Amsden) which held that where the legislature makes a finding that a portion of a river is navigable, the remainder of the river is by legislative implication “non-navigable.” According to Sumner Hill, the point where Killkelly Road accessed the River was therefore non-navigable. Rio Mesa, on the other hand, argued in favor of factual navigability, which is found if a small boat or canoe can be floated on the river. Based on this test, the trial court found that the River was in fact factually navigable.
The Court of Appeal, Fifth Appellate District, was left with two options: follow the 1856 Supreme Court authority which would lead to a bizarre finding that a factually navigable river was nonetheless non-navigable, or disregard the Supreme Court authority to make what it may have felt was the correct finding. Instead, in a punt worthy of Ray Guy[i], the court decided that Rio Mesa was barred from challenging the 1985 Map based on expiration of the 90-day statute of limitations. The court then urged the legislature or Supreme Court to clarify the issue of which standard of navigability – factual or statutory – should control.
The Important Issue Actually Decided
After finding that Sumner Hill should have prevailed on each of their claims, the court addressed a very important question: whether a plaintiff asserting a claim for slander of title must prove actual damages, i.e., pecuniary damage to the salability of the property, or may rely solely on its attorneys’ fees and costs to establish damages. The court held that while the slander of title cause of action is primarily intended as a means of “protection from injury to the salability of property” and that damages may be awarded for “loss of a particular sale, impaired marketability or depreciation in value,” a plaintiff is not required to prove any of these damages and that its payment of attorneys’ fees and costs alone constitutes pecuniary damages.
Comment: Damages issues such as this one are very important in real property cases. In some cases, a defendant may be found liable but ultimately prevail because the plaintiff is unable to prove actual damages.
Sumner Hill Homeowners Assoc., Inc. v. Rio Mesa Holdings, LLC (2012) 205 Cal.App.4th 999
[i] Ray Guy was an NFL punter who won three Super bowls with the Oakland/Los Angeles Raiders between 1973-86. He remains the only punter to be selected in the first round of the NFL draft. After one of his punts hit the giant video screen at the Louisiana Superdome during the 1976 Pro Bowl, the NFC team pulled the ball to have it tested for helium, which test came back negative. Although nominated to the Pro Football Hall of Fame in 1994, he has yet to be inducted which is considered to be a travesty by some in this law firm.