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expunging the notice of pendency of action where the court dismissed the complaint
Summary of this case from Barefield v. HSBC Holdings PLCOpinion
No. C 09-0030 PJH.
March 27, 2009
ORDER GRANTING MOTION TO EXPUNGE; AND DISMISSING ACTION WITH PREJUDICE
Before the court is defendant Saxon Mortgage Services, Inc.'s ("Saxon") motion to expunge the notice of pendency of action recorded on Janneth Castro's ("plaintiff") real property or, in the alternative, to require plaintiff to post a bond as a condition of maintaining the notice of pendency of action. Plaintiff did not oppose the motion. Nor did she file a statement of non-opposition pursuant to Civil Local Rule 7-3. Also before the court is Saxon's request for an order dismissing this action with prejudice, which plaintiff did not oppose. Because the court finds that oral argument is unnecessary and would not be helpful, the hearing date of April 1, 2009 is VACATED pursuant to Civil Local Rule 7-1(b). For the reasons stated below, the court GRANTS Saxon's motion to expunge and DISMISSES this action with prejudice.
BACKGROUND
This action arises out of the initiation of a non-judicial foreclosure sale of real property purchased by plaintiff. Plaintiff is a resident of Alameda County, California and the owner of real property located at 2058-2060 B Street, Hayward, California 94541 (the "property"). Compl. ¶ 6. Defendant Old Republic Default Management Services ("Old Republic") is the trustee pursuant to the deed of trust recorded on July 7, 2006. Id. ¶ 2, Exh. 1. Defendant Saxon is a business entity unknown to plaintiff. Id. Apparently, Saxon is the servicer of plaintiff's loan.
At some unknown time, plaintiff defaulted on the payments due on her loan. Compl., Exh. 1. On November 25, 2008, a non-judicial foreclosure was initiated when a Notice of Trustee's Sale was recorded by Old Republic. Id. On December 9, 2008, plaintiff commenced the instant action against Saxon, Old Republic and various unnamed defendants in the Superior Court of California, County of Alameda, generally alleging that Saxon has improperly initiated, or directed Old Republic to initiate, a trustee's sale of the property. Compl. ¶¶ 2-3, 7-8. Specifically, plaintiff's complaint alleges three causes of action, asserting that defendants violated: (1) the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. ("FDCPA"); (2) California's Rosenthal Fair Debt Collection Practices Act, Cal. Civ. Code § 1788 et seq. ("RFDCPA"); (3) the Real Estate Settlement Procedures Act, 12 U.S.C. § 2601 et seq. ("RESPA"); (4) the Home Ownership and Equity Protection Act of 1994, 15 U.S.C. § 1639 ("HOEPA"); (5) the Truth in Lending Act, 15 U.S.C. § 1601 ("TILA"), Regulation Z, 12 C.F.R. § 226; (6) the Federal Trade Commission Act, 15 U.S.C. § 41 et seq. ("FTC Act"); and (7) the Federal Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 et seq. ("RICO").
On January 2, 2009, a notice of pendency of action ("lis pendens") was recorded on the property in the Official Records of Alameda County, California as Instrument No. 2009000721, giving notice that this action "affects title and the right to possession of" the property. Exh. 1, attached to Saxon's Mtn. to Expunge Notice of Pendency of Action or Require a Bond. On January 6, 2009, this action was removed on the basis of federal question jurisdiction. Saxon moved for dismissal on January 13, 2009. On February 17, 2009, Saxon filed the instant motion, seeking an order expunging the lis pendens notice or, in the alternative, requiring plaintiff to post a bond as a condition of maintaining the lis pendens.
Although Saxon did not ask this court to take judicial notice of this document, the court will nonetheless do so given that it is a matter of public record and its accuracy is not subject to reasonable dispute. See Fed.R.Evid. 201(b); W. Fed. Sav. v. Heflin, 797 F.Supp. 790, 792 (N.D. Cal. 1992).
On February 24, 2009, the court issued an Order dismissing plaintiff's first through third causes of action for failure to state a claim upon which relief may be granted. The court ordered plaintiff to either file an amended complaint or a statement indicating that she abandoned her remaining claims no later than March 18, 2009. The court also cautioned plaintiff that "[i]f the first amended complaint is either filed untimely or lacks a cognizable claim, this action will be dismissed with prejudice." To date, plaintiff has not filed an amended complaint or a statement indicating that she abandons her remaining claims.
DISCUSSION
A. Legal Standard
Pursuant to California Code of Civil Procedure § 405.20, "[a] party to an action who asserts a real property claim may record a notice of pendency of action [lis pendens] in which that real property claim is alleged." See also Kirkeby v. Superior Court of Orange County, 33 Cal.4th 642, 647 (2004). The purpose of a lis pendens notice is to provide constructive notice of a pending claim that may affect title or right to possession of the real property described in the lis pendens notice. See La Paglia v. Superior Court, 215 Cal.App.3d 1322, 1326 (1989) (setting forth the history and purpose of lis pendens statutes), abrogated on other grounds by Lewis v. Superior Court, 19 Cal.4th 1232, 1258 (1999); Kirkeby, 33 Cal.4th at 647. "Its effect is that anyone acquiring an interest in the property after the action was filed will be bound by the judgment." BGJ Associates, LLC v. Superior Court, 75 Cal.App.4th 952, 966 (1999).
Section 405.20 provides:
A party to an action who asserts a real property claim may record a notice of pendency of action in which that real property claim is alleged. The notice may be recorded in the office of the recorder of each county in which all or part of the real property is situated. The notice shall contain the names of all parties to the action and a description of the property affected by the action.
Cal. Code Civ.Proc. § 405.20.
"`While the lis pendens statute was designed to give notice to third parties and not to aid plaintiffs in pursuing claims, the practical effect of a recorded lis pendens is to render a defendant's property unmarketable and unsuitable as security for a loan. The financial pressure exerted on the property owner may be considerable, forcing him to settle not due to the merits of the suit but to rid himself of the cloud upon his title. The potential for abuse is obvious.'" Kirkeby, 33 Cal.4th at 651 (quoting La Paglia, 215 Cal.App.3d at 1326); see also Amalgamated Bank v. Superior Court, 149 Cal.App.4th 1003, 1011 (2007) (A lis pendens notice "acts as a cloud against the property, effectively preventing sale or encumbrance until the litigation is resolved or the lis pendens is expunged."). "Because of the effect of a lis pendens, `[t]he history of the lis pendens legislation indicates a legislative intent to restrict rather than broaden the application of the remedy.'" Kirkeby, 33 Cal.4th at 651 (quoting Urez Corp. v. Superior Court, 190 Cal.App.3d 1141, 1145 (1987)).
A property owner may remove an improperly recorded lis pendens by bringing a motion to expunge. Kirkeby, 33 Cal.4th at 647 (citing Cal. Code Civ.Proc. § 405.30). There are several statutory bases for expungement of a lis pendens, including that the claimant's (party recording the notice of lis pendens) pleadings, on which the lis pendens is based, do not contain a real property claim. See Cal. Code Civ.Proc. § 405.31 ("the court shall order the notice expunged if the court finds that the pleading on which the notice is based does not contain a real property claim"); see also Kirkeby, 33 Cal.4th at 647 (if claimant's pleading does not properly plead a real property claim, the lis pendens must be expunged); Gale v. Superior Court, 122 Cal.App.4th 1388, 1398 (2004) (unless a pleading sets forth a real property claim, a notice of lis pendens must be expunged, regardless of any bond).
Section 405.30 provides, in part: "At any time after notice of pendency of action has been recorded, any party, or any nonparty with an interest in the real property affected thereby, may apply to the court in which the action is pending to expunge the notice." Cal. Code Civ. Proc. § 405.30.
The question of whether a pleading states a real property claim is tested by a "demurrer-like analysis" that centers on the adequacy of the pleading. Kirkeby, 33 Cal.4th at 647-48. Put simply, if a claimant properly pleads a real property claim, she can file a notice of lis pendens; if she doesn't, she can't.Gale, 122 Cal.App.4th at 1395. "[W]hen a motion to expunge is brought, the burden is on the party opposing the motion to show the existence of a real property claim." Kirkeby, 33 Cal.4th at 647 (citing Cal. Code Civ.Proc. § 405.30). In addition to alleging a real property claim, the claimant has the burden of establishing the probable validity of that claim. Section 405.32 states that "the court shall order that the notice be expunged if the court finds that the claimant has not established by a preponderance of the evidence the probable validity of the real property claim." Cal. Code Civ.Proc. § 405.32.
B. Analysis
The court grants Saxon's motion to expunge the lis pendens notice. As set forth in this court's February 24, 2009 Order, plaintiff's complaint does not allege sufficient facts to state a cognizable claim for relief. Plaintiff did not file an amended complaint correcting the complaint's deficiencies. Nor did she file an opposition to the instant motion. As such, plaintiff has failed to sustain her burden to properly plead a real property claim and to establish the probable validity of that claim. The lis pendens notice must therefore be expunged.
CONCLUSION
For the reasons stated above, the court hereby GRANTS Saxon's motion and orders the lis pendens notice expunged. IT IS FURTHER ORDERED that this action is DISMISSED with prejudice. Plaintiff failed to file a timely amended complaint as ordered by the court. Plaintiff had adequate warning that dismissal would result from non-compliance with the court's order. The Clerk shall close the file.