## Facts

- Vicky Lynn Karen and LaMar Carlson, former romantic partners, formed VLK, LLC to buy distressed houses in Washington, D.C. and resell them for profit.
- After Karen and Carlson ended their relationship, Carlson began dating Joan Alderman, who owned Havilah Real Property Services, LLC, a competing distressed-property business in D.C.
- Karen believed Carlson and Alderman were diverting opportunities away from VLK and to Havilah, including by using VLK money to help Havilah purchase properties.
- VLK (and/or Karen) sued Carlson, Alderman, and Havilah in Maryland, alleging, among other things, that Carlson wrongfully transferred $10,000 from VLK to Havilah for property purchases.
- In connection with that Maryland lawsuit, VLK filed notices of lis pendens against 51 properties owned by Havilah in the District of Columbia. A lis pendens is recorded in land records to give notice of litigation affecting property; its presence makes sales difficult because buyers fear title risk.
- After the lis pendens were recorded, Havilah contended that it could not sell properties subject to the notices. Havilah later focused its interference claim on 31 of the 51 properties.
- Evidence at trial showed Havilah had been selling its properties successfully before the filings, actively marketed the 31 properties, generated real buyer interest, and had contracts for several sales before the notices; after the filings, contracts collapsed and Havilah was unable to sell the properties while the notices remained.
- The Maryland litigation ended with Karen/VLK losing against Alderman and Havilah, while prevailing against Carlson for breach of fiduciary duty to VLK. After the Maryland case ended, the lis pendens were released.
- Havilah then sued VLK and Karen in D.C. Superior Court for (1) malicious prosecution based on the prior civil proceeding and (2) tortious interference with contract and/or prospective economic advantage based on allegedly improper lis pendens filings.
- The trial court granted summary judgment for VLK/Karen on malicious prosecution for failure to show “special injury,” but sent tortious interference to a jury. The jury found for Havilah and awarded $602,942 in damages, tied largely to the change in value of the encumbered properties during the lis pendens period.
- Both sides appealed: VLK/Karen challenged liability and damages on tortious interference (including a claim of absolute privilege), and Havilah challenged the dismissal of malicious prosecution.

## Issues

1. Whether recording a notice of lis pendens in connection with real-property litigation is protected by an absolute privilege or only a conditional privilege against a tortious-interference claim.
2. Whether the recording of multiple lis pendens notices that disrupt property sales constitutes the “special injury” required for malicious prosecution of a civil proceeding under District of Columbia law.
3. Whether the evidence supported the jury’s findings on intentional interference and the damages measure, including recovery based on diminished fair market value during the pendency of the lis pendens.

## Decision

- The D.C. Court of Appeals held that filing a lis pendens is protected by a conditional (qualified) privilege, not an absolute privilege, when asserted as a defense to tortious interference.
- The court affirmed the tortious-interference judgment, concluding that the conditional privilege can be lost when the lis pendens is tied to litigation pursued without good faith or for an improper purpose, and that the record permitted the jury to find wrongful interference.
- The court affirmed summary judgment for VLK/Karen on malicious prosecution, holding that the economic and transactional harms caused by the lis pendens did not satisfy D.C.’s “special injury” requirement for malicious prosecution of a civil action.
- The court upheld the $602,942 damages award, including the use of a diminution-in-value approach for the period the properties were clouded by the notices.

## Legal Principles

- In the District of Columbia, a lis pendens filed in connection with litigation affecting real property is protected by a conditional privilege as to tortious-interference claims; it is not automatically immune from tort liability.
- The conditional privilege may be forfeited if the lis pendens is recorded or maintained in bad faith, without probable cause, or for a purpose other than providing legitimate notice of a property-related dispute.
- Malicious prosecution of a civil proceeding in D.C. requires “special injury” beyond the ordinary consequences of being sued; business losses and inability to complete transactions caused by lis pendens filings do not meet that narrow requirement, even when many properties are affected.
- For tortious interference involving real estate rendered difficult to sell by wrongful lis pendens, consequential damages may be proved through competent evidence, including the change in fair market value between the time of recording and the time of release.

## Conclusion

The D.C. Court of Appeals affirmed a jury verdict awarding Havilah $602,942 for tortious interference based on allegedly bad-faith lis pendens filings, holding that lis pendens are only conditionally privileged and may support liability when used improperly, while also affirming that the same filings do not constitute the “special injury” needed to pursue malicious prosecution of a civil case in the District of Columbia.


Havilah Real Property Services, LLC v. VLK, LLC, 108 A.3d 334 (2015)