5 Grounds for Lis Pendens Expungement – A Simple Guide

What is a Lis Pendens?

In essence, a lis pendens is a notice of pending litigation against a piece of real property. A lis pendens means a “notice of the pendency of an action in which a real property claim is alleged.” See Code Civ. Proc. § 405.2. A party who asserts a claim against real property may record the lis pendens in the recorder’s office of the county in which the property is located, See Code Civ. Proc. § 405.20. Notably, when properly recorded, the lis pendens provides constructive knowledge of the pending action to potential buyers, grantees, and creditors on the property. See Amalgamated Bank v. Superior Court (2007) 149 Cal.App.4th 1003, 1011. Due to the importance of this area of law, we’ve provided a lis pendens form.

What Is an “Action” Which Allows Recordation of a Lis Pendens?

An “action” for purposes of the lis pendens statute is typically an action in the state court in which the property sits. However, the lis pendens may also be recorded under state law in the case an action is pending in federal court of the state in which the property sits. See Code Civ. Proc. § 405.5.

Further, in California, a lis pendens may not be filed pursuant to an action currently pending in another state’s state courts; this remains true even if the action pertains to real property within California. Formula Inc. v. Superior Court (2008) 168 Cal.App.4th 1455, 1463-1466.

Even further, an arbitration proceeding is not considered an action allowing a lis pendens to be recorded. Manhattan Loft, LLC v. Mercury Liquors, Inc. (2009) 173 Cal.App.4th 1040, 1054. However, if a party files a motion to compel arbitration along with a motion to stay the pending litigation to allow the arbitration to continue, the party may file a lis pendens along with the motions so long as the underlying arbitration is asserting a real property claim. Manhattan Loft, LLC v. Mercury Liquors, Inc. (2009) 173 Cal.App.4th 1040, 1054.

No matter where the “action” is filed, it must assert a real property claim. There are numerous real property claims which may justify the recordation of a lis pendens. An action to set aside a fraudulent conveyance when the action is to recover specific real property qualifies as a real property claim. Kirkeby v. Superior Court of Orange County (2004) 33 Cal. 4th 642, 651-52. A separate property claim may qualify for a lis pendens recordation when the title to the property is held by the spouses as joint tenants. Kane v. Huntley Financial (1983) 164 Cal.App3d 1092, 1096.

There are also claims where recording a lis pendens is mandatory. For example, recording a lis pendens is required in an action to quiet titleCarr v. Rosien (2015) 238 Cal.App.4th 845, 850-51. A lis pendens recordation is also mandatory in an action for a partition of real property. See Code Civ. Proc. §§ 872.250, 872.320, subd.(b). A lis pendens recordation is also required in an action against an estate that is formed on a rejected claim. See Cal. Prob. Code § 9354, subd. (b). These are only three of a bevy of actions where the recording of a lis pendens is mandatory. As such, it would serve a litigant well to contact an experienced real estate attorney to determine whether a lis pendens recordation is required in their case.

How Does a Recorded Lis Pendens Affect My Property?

In practice, the recording of a lis pendens clouds title to the property described in the notice of pendency of action and discourages a sale or encumbrance on the property until the litigation described in the notice is resolved or the lis pendens is expunged. See Malcolm v. Superior Court (1981) 29 Cal. 3d 518, 523 n.2. Luckily, a recorded lis pendens likely would not prevent a homeowner from claiming a homestead exemption in chapter 7 bankruptcy. Given all of this, an owner of a piece of real property subject to a lis pendens notice will likely encounter trouble selling or refinancing the property.

Property owners sometimes contend that a lis pendens has been recorded fraudulently in an attempt to coerce a property owner into settling an otherwise meritless lawsuit in order to remove the cloud on their property’s title. See BGJ Associates, LLC v. Superior Court (1999) 75 Cal.App.4th 952, 968-70Hilberg v. Superior Court (1989) 215 Cal.App.3d 539, 542McKinght v. Superior Court (1985) 170 Cal.App.3d 291, 302Safeco Title Ins. Co. v. Moskopoulos (1981) 116 Cal.App.658, 667-68Allied Eastern Financial v. Goheen Enterprises (1968) 165 Cal.App.2d 131, 132-134. Given the deleterious effects of a properly recorded lis pendens, the question becomes how to get rid of an improperly recorded lis pendens clouding title to your property.

How Does a Real Property Owner Expunge a Lis Pendens?

Expungement is a remedy meant to curb abusive lis pendens recordings. See Elder v. Carlisle Ins. Co. (1987) 193 Cal.App.3d 1313, 1317-18Trapasso v. Superior Court (1977) 73 Cal.App.3d 561, 569Stewart Development Co. v. Superior Court (1980) 108 Cal.App.3d 266, 273.

After the lis pendens is recorded, any party to the underlying action or a nonparty who has an interest in the real property subject to the notice may apply to court for an expungement of the lis pendens. See Code. Civ. Proc. § 405.30Palmer v. Zaklama (2003) 109 Cal.App.4th 1367, 1378.

There are five grounds for lis pendens expungement.

1 – The Underlying Action Does Not Involve a Real Property Claim

In order to expunge a recorded lis pendens, the court will first determine whether the action underlying the recording involves a claim to real property. See Code Civ. Proc. § 405.31. If the action underlying the lis pendens does not involve a claim to real property, the court will immediately expunge the lis pendens without a motion to do so by either party. Kirkeby v. Superior Court of Orange County (2004) 33 Cal. 4th 642, 649-50.

2 – “Void or Invalid” Lis Pendens Recording

A lis pendens may be expunged if it is “void or invalid.” A lis pendens is void or invalid in the requirements of service or recording of the affidavit of service are not satisfied. See Code Civ. Proc. § 405.23Rey Sanchez Investments v. Superior Court (2016) 244 Cal.App.4th 259; Biddle v. Superior Court (1985) 170 Cal.App.3d 135, 138.

3 – Claimant Has Not Shown Probable Validity of Underlying Claim

The claimant who filed the lis pendens has the burden of proof to show by a preponderance of the evidence that the underlying claim against the real property subject to the lis pendens is valid. See Code Civ. Proc. §§ 405.30, 405.32.

As one court explained:

Unlike most other motions, when a motion to expunge is brought, the burden is on the party opposing the motion to show the existence of a real property claim. Cal.Civ.Proc.Code § 405.30 (2006) Section 405.32 requires a “judicial evaluation of the merits” of a claimant’s case. Id. Pursuant to that section, the court is required to expunge a lis pendens if the court finds, after evaluating the merits, that the claimant has not established by a preponderance of the evidence the probable validity of the real property claim.

Dickey v. Auer,  2006 WL 1409623, at *3 (E.D. Cal., May 19, 2006, No. 2:05-CV-2373MCEGGH).

Accordingly, the court is to weigh the evidence submitted and determine whether it is more probable than not that the claimant who filed the lis pendens will prevail on the underlying real property claim. See Mix v. Superior Court (2004) 124 Cal.App. 987, 994-95. If a claimant is unable to bear its burden of proof, then the lis pendens will be expunged.

4- Monetary Judgment is Adequate to Satisfy the Real Property Claim

Even if a claimant who records a lis pendens pursuant to a real property claim and the claimant has proven a probable validity of the underlying claim by a preponderance of the evidence, the lis pendens may still be expunged upon a showing that monetary relief stemming from the alleged claims would be adequate. If monetary relief may be deemed adequate, the lis pendens is unnecessary and may be expunged. Even so, the recording is only conditionally expunged if the party moving for the expungement provides an undertaking that will inemnify the claimant in the event the claimant does indeed prevail on the underlying claim after the conditional expungement. See Code Civ. Proc. § 405.33.

5 – Claimant Fails to File an Undertaking

 [A]t any time after a [lis pendens] has been recorded, and regardless of whether a motion to expunge has been filed, the court may, upon motion by any person with an interest in the property, require the claimant to give the moving party an undertaking as a condition of maintaining the [lis pendens] in the record title.

Code Civ. Proc. § 405.34.

An undertaking required pursuant to this section shall be of such nature and in such amount as the court may determine to be just. In its order requiring an undertaking, the court shall set a return date for the claimant to show compliance and if the claimant fails to show compliance on the return date, the court shall order the [lis pendens] expunged without further notice or hearing.

Code Civ. Proc. § 405.34.

Contact an Experienced Real Estate Attorney in California Today

Given the intricacies of a potential lis pendens expungement, it would serve a potential litigant well to contact an experienced real estate attorney to discuss the specifics of their case. Contact Talkov Law’s experienced real estate attorneys either online or at (844) 4-TALKOV (825568)  for a comprehensive evaluation of your situation.

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