IN THE SUPREME COURT OF THE STATE OF MONTANA 

JACK PAULSON and BUD GRANT, 

Plaintiffs and Appellants, 

-vsROBERT J. LEE and DOROTHY MARIE 

LEE, husband and wife, LOUIS CROPP 

and IRENE CROHN, husband ans wife, 

ELMER SPRUNGER and MARIE SPRUNGER, 

husband and wife, and ROBERT RELLER, 

Defendants and Respondents. 

APPEAL FROM: District Court of the Eleventh Judicial District, 

In and for the County of Flathead, 

The Honorable Leif Erickson, 7udge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Richard DeJana, Kalispell, Montana 

For Respondent: 

Keller & German; Robert S. Keller, Kalispell, 

Monta~a 

---.- -.-- - - - - - - - 

Submitted on Briefs: Aug. 13, 1987 

Decided: November 10, 1987 

Filed: blov 10 1987 

.- --- - - - .---- .- - Clerk 
Mr. Justice Fred J. Weber delivered the Opinion of the Court. 

In this action for slander of title, the District Court 

for the Eleventh Judicial District, Flathead County, granted 

the defendants a directed verdict. Plaintiffs Paulson and 

Grant appealed, and the defendants cross-appealed. Our 

determination of the cross-appeal renders consideration of 

the other issues unnecessary. We vacate the judgment of the 

District Court which granted a. directed verdict and direct 

the District Court to enter summary judgment for the 

defendants. 

The issues are: 

1. Did the District Court err when it ruled that the 

judge's order in - Lee was the law of this case? 

2. Does an action to stop the construction, sale, or 

lease of a four-unit dwelling affect the title or right of 

possession of real property within the meaning of 

5 70-19-102, MCA? 

3. Did the District Court err when it denied the de-. 

fense of privilege in filing notice of the pendency of the 

action (lis pendens) ? 

With the exception of Mr. Keller, all parties to the 

present case also were parties to the case of Lee v. Flathead 

County (Mont. 1985), 704 P.2d 1060, 42 St.Rep. 1258. In - Lee 

Mr. Paulson and Mr. Grant were involved in the construction 

of a four-unit structure in a neighborhood where the Lees, 

the Crohns, and the Sprungers all lived. Mr. and Mrs. 

Sprunger lived adjacent to the construction. The neighbors 

became concerned about the construction project and hired Mr. 

Keller as their lawyer. Mr. Keller prepared a complaint 

which alleged that the building was being constructed in 

violation of subdivisiorl regulations. In count one the 

complaint requested mandamus to compel county officials to 
"enforce the prohibition against sale, lease or transfer of 

any unit of said building." In addition the complaint sought 

to enjoin construction and to enjoin county officials from 

granting subdivision approval-. We are concerned here only 

with count one. At the time of filing the complaint in - Lee, 

Mr. Keller filed a notice of lis pendens. The District Court 

then granted summary judgment to the defendants in - Lee as to 

count one. As a part of that judgment the court concluded 

that the notice of lis pendens was improperly filed and 

ordered it rernoved. Subsequent to that summary judgment and 

prior to our decision on appeal, the legislature amended 5 

76-3-204, MCA. In the appeal of - Lee, this Court held that 

the amendment controlled and that Paulson and Grant no longer 

were required to comply with subdivision regulations. We 

therefore affirmed the summary judgment of the District Court 

as to count one and affirmed the removal of the lis pendens. 

Mr. Paulson and Mr. Grant, defendants in the first 

action, then brought this action for slander of title. They 

sought damages caused by the filing of the notice of lis 

pendens. The defendants moved for summary judgment on the 

grounds that the publication of lis pendens was privileged. 

The District Court, in an order dated March 6, 1987, denied 

summary judgment. 

During the trial, after the plaintiffs had called various witnesses, the defendants moved for a directed verdict. 

The District Court granted a directed verdict for the defen-- 

<?ants because of the failure of the plaintiffs to establish 

direct evidence of malice, an essential element in a slander 

of title action. Plaintiffs Paulson and Grant appeal. 

Defendants cross-appeal, contending that the District Court's 

refusal. to grant summary judgment was error. 
3. 

Did the District Court err when it ruled that the 

judge's order in - Lee was the law of this case? 

In a memorandum supporting the Narch 6, 1987, order 

denying defendants' motion for summary judgment, the District 

Court noted that the trial court j.n the previous case of - Lee 

found that the lis pendens was not privileged because it had 

been improperly filed. The District Court in the present 

case then concluded that such prior determination by the 

District Court in - Lee became the "law of the case" so that 

the issue could not be relitigated. 

In this Court's opinion in - Lee, 704 P.2d at 1063, we 

stated: 

The appellants also argue that the trial court 

erred in granting the respondents' motion to remove 

the notice - - of L 

lis sendens. The trial court found 

that the lis pendens was improperly filed. In view 

of our decision on the first issue, we affirm the 

removal of lis pendens. 

Our decision was based upon a statute enacted after the 

District Court decision. Because of that statute, the notice 

of lis pendens properly was removed. However, we did not 

rule on whether the notice was properly filed originally. 

Our decision on appeal was an affirmation of the result with 

regard to the lis pendens but not an affj-rmation of the 

reasoning of the District Court. As a result, the conclusion 

of the District Court that the notice was improperly filed no 

longer remained the law of the case. Our decision on appeal 

became the law of the case. We conclude that the District 

Court erred when it held that the trial judge's order in - Lee 

was the law of the present case With regard to the improper 

filing of the notice of lis pendens. 
Does an action to stop the construction, sale, or lease 

of a four-unit dwelling affect the title or right of possession of real property within the meaning of s 70-19-102, MCA? 

Section 70-19-102, MCA, reads: 

(1) In an action affecting the title or right 

of possession of real property . . . the plaintiff . . . and the defendant . . . may file in the 

office of the clerk and recorder of the county in 

which the property is situated a notice of the 

pendency of the action containing the names of the 

parties and the object of the action or defense and 

a description of the property in that county affected thereby. 

(2) From the time of filing of such notice 

only shall a purchaser or encumbrancer of the 

property affected thereby be deemed to have constructive notice of the pendency of the action and 

only of its pendency against parties designated by 

their real names. 

Plaintiffs urge this Court to rule that the party filing a 

notice of lis pendens must claim a right to the title or 

possession of the subject property. 

The language of the statute, however, does not suggest 

such a strict application, but, rather, demands only that. the 

action affect title or right of possession of real property. 

We believe this non-restrictive view reflects the purpose of 

the notice. As evident by subsection (2) of 5 70-19-102, 

MCA, one vital purpose of the notice is to notify subsequent 

purchasers and encumbrancers of pending litigation. This 

provision protects the claimant should the claimant receive a 

favorable judgment. This was a principal concern for the 

defendants when they filed the 1984 action. A second purpose 

of the notice i.s to alert third parties interested in the 

subject property, thereby protecting them from litigation 

attyendant tc the property. See Fox v. Clarys 1Mont. 1987), 
738 P.2d 104, 106, 44 St.Rep. 1004, 1007. We hold that the 

defendants were not required to show an actual claim to title 

or possession of the subject property. 

Even though the plaintiffs in - Lee asserted no claim to 

the property, they asked generally for an injunction against 

the construction, sale, or lease of the property. Had the 

District Court ordered such an injunction, certainly the 

title and right of possession would have been affected. 

The plaintiffs in - Lee sought to enforce the subdivision 

regulations which would have placed certain building restrictions on the structure being constructed.. Thus, the regulations would place a limitation on the owners' right to build 

on their property. The Colorado Supreme Court construed a 

substantially similar notice statute in Eammersley v. District Court (Colo. 1980), 610 P.2d 94. The plaintiff in that 

case brought an action against an adjacent landowner and 

sought to enforce protective covenants which limited construction within the subdivision. He also filed notice of 

lis pendens. After discussing the policy supporting lis 

pendens historically, the court went on to determine whether 

the notice was authorized in that particular situation as 

"affecting the title to real property." 

The instant case involves the extent of limitations 

on the rights of an owner of a lot in a subdivision 

to construct a residence on that property. Those 

rights are incidents of the owner's title. Although the present litigation does not seek to 

change ownership in any way, it does involve a 

determination of certain rights incident to ownership and in that sense affects title to real property. It will promote the finality of litigation 

and economy of judicial resources, will harm no 

legitimate interest of the owner, and will be fully 

consistent with the language of C.R.C.P.lOS(f) to 

hold that the instant case is one affecting title 

to real property within the meaning of that rule. 

WE adopt that construction. 
Harnrnersley, 610 P.2d at 96-97. We adopt that construction as 

well and conclude that the relief which the defendants sought 

would have affected title or right of possession of the 

subject property. Therefore, under the facts of this case, 

we hold that the notice of lis pendens was authorized by 

§ 70-19-102, KCA. 

I11 

Did the District Court err when it denied the defense of 

privilege in filing notice of the pendency of the action (lis 

pendens) ? 

The District Court in its order and rationale stated, 

[Ilt is the rule of this case that where the underlying action does not affect title or possession, 

as opposed to use, of real property a lis pendens 

is not permitted by statute and is not privileged. 

Were this not the rule, a groundless lis pendens 

could be filed with impunity in a simple money 

judgment action or in any action where title to or 

right to possession of [the property] is not actually affected. 

As we have already stated, however, the underlying action did. 

affect title to or possession of the subject property, thus 

the notice was permitted. Because the notice was authorized, 

it was privileged and not subject to a slander of title 

action. See Hauptman v. Edwards, Inc. (l976), 170 Mont. 310, 

317, 553 P.2d 975, 979; Alhertson v. Raboff (Cal. 1956), 295 

P.2d 405, 409. We hold that the District Court improperly 

denied the defense of privilege in filing the notice of lis 

pendens. 

We vacate the judgment of the District Court which 

granted a directed verdict, and we reverse the District 

Court's denial of the defendants' motion for summary judg- 
ment . Be dj.rect entry of summary judgment for the 

defendants. 

We Concur: / 

&cap+ Justices