Facts

In 2009, Valentine and Christine Rutherford accepted a loan from Gary Holt, through his commercial leasing company, U.S. Lease Financing Inc. They placed their Ojai commercial property as security. The Rutherford's defaulted on the loan. Holt and his company foreclosed on the Ojai property. After foreclosure, but during unlawful detainer proceedings, the Rutherfords produced documents showing their trust owned the property, but it did not appear in the chain of title because the Rutherfords attached the wrong legal description. The judge ruled a new trial was required to determine ownership of title but gave half of the property to the Rutherfords and half to Holt and U.S. Lease Financing for purposes of the unlawful detainer.
Holt and U.S. Leasing sued the Rutherfords for quiet title but the trial court ruled that the unlawful detainer action had already determined the issue of title. Holt and U.S. Lease Financing dismissed their action so that they could appeal the decision.
Holt and U.S. Leasing then sold the property. Therefore, the appellate court held the appeal was moot because the property had been sold. The Rutherfords' filed a lawsuit against Holt and U.S. Leasing in response.

PLAINTIFF'S CONTENTIONS: Plaintiffs contended that defendants' sale of the property constituted slander of title and that Holt's previous lawsuit for quiet title constituted a malicious prosecution.

DEFENDANTS' CONTENTIONS: Defendants contended that their claims in the previous lawsuit were legitimate and that plaintiffs' claims fell outside the statute of limitations. Defendants filed a counterclaim, contending they were entitled to the $181,000 outstanding balance on one of the notes.

Result

The judge found plaintiffs' claims failed because Holt's prior lawsuit for quiet title and related causes of action was legitimate and found for defendants on their counterclaim. Defendants were awarded the $181,000 balance, plus accrued interest. The total award amounted to $322,204.20.