Judge: Anne Richardson, Case: 24STCV09433, Date: 2024-10-23 Tentative Ruling

Case Number: 24STCV09433    Hearing Date: October 23, 2024    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

I. Background

A. Pleadings

Plaintiff Brent Claunch (Claunch) sues Defendants AT&C Investment, LLC (AT&C), Auxin Operative, LLC, Aaron Mamann (Mamann), Rebecca Lopez (Lopez), and Does 1-10, inclusive pursuant to an April 15, 2024 Complaint alleging causes of action for (1) Foreclosure of Mechanic’s Lien; (2) Work, Labor, and Material; (3) Breach of Oral Contract; (4) Quantum Meruit.

The claims arise from the following. AT&C is the owner of a warehouse property located at 1357 East 16th Street, Los Angeles, California 90021 (the Property). The Property is leased to Defendant Auxin Operative, a business operated by Defendants Lopez and Mamann. Claunch alleges that on January 7, 2022, the Defendants hired Claunch to perform electrical work at the Property but in October 2023, the Defendants told Claunch to cease work. Claunch alleges that he is owed $92,967.00 for the work he performed at the Property.   

On July 26, 2024, AT&C filed a Cross-Complaint asserting that it did not hire Claunch to perform any work at the Property, but that Claunch may have been hired by Cross-Defendants Auxin Operative, Lopez, and Mamann. AT&C asserts that if Claunch’s allegations are found to be true, the Cross-Defendants should be held liable and indemnify AT&C.

B. Motion Before the Court

On April 30, 2024, Claunch filed a Notice of Lis Pendens on the Property, citing a mechanic’s lien.

On August 27, 2024, AT&C filed the instant amended motion to expunge the Lis Pendens and mechanic’s lien.

On September 25, 2024, Claunch filed an opposition to the motion.

On October 1, 2024, Claunch filed an ex parte application for an order continuing the hearing date set for this motion because Claunch obtained new evidence relevant to the motion.

On October 2, 2024, the Court granted the application.

On October 11, 2024, Claunch filed a supplemental memorandum in support of his opposition to the motion.

On October 16, 2024, AT&C filed a reply.

II. Motion

A. Evidentiary Objections

Claunch’s evidentiary objections to the Declaration of Edward W. Suh and the exhibits attached thereto are not ruled on as they are not material to disposition of the ruling.

B. Legal Standard

A lis pendens is a recorded instrument titled Notice of Pending Action that is recorded in the office of the county recorder where land is located and gives constructive notice of a pending lawsuit affecting title to described real property. (Gale v. Superior Court (2004) 122 Cal.App.4th 1388, 1395.)  

“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.” (Code Civ. Proc., § 405.20.) Anyone having an interest in the property affected by a lis pendens, whether or not a party to the pending lawsuit, may move to expunge the lis pendens any time after it is recorded. (Code Civ. Proc., § 405.30.) 

A lis pendens may be expunged on any of the following grounds: (1) defects in the statutory service and filing requirements; (2) the complaint does not contain a real property claim; (3) the claimant cannot prove the probable validity of the real property claim by a preponderance of the evidence; and (4) “adequate relief” can be “secured to the claimant by the giving of an undertaking.” (Code Civ. Proc., §§ 405.23, 405.31, 405.32, 405.33; McKnight v. Superior Court (Faber) (1985) 170 Cal.App.3d 291, 303 [recognizing defective servicing and filing requirements as grounds for expungement].) 

The motion may be made even while an appeal is pending. (Peery v. Superior Court (1981) 29 Cal.3d 837, 842.) On a motion to expunge a lis pendens after judgment against the claimant and while an appeal is pending, the trial court must grant the motion unless it finds it more likely than not that the appellate court will reverse the judgment. (Amalgamated Bank v. Superior Court (2007) 149 Cal.App.4th 1003, 1015.) 

C. Analysis

Civil Code section 8200 requires that before recording a lien claim, a claimant must serve preliminary notice within 20 days of beginning work. (Civ. Code §§ 8200 subds. (a) and (d), 8204 subd. (a).) Additionally, Civil Code section 8412 states that claimant may not enforce a lien unless the lien is recorded within ninety (90) days of completing the work. (Civ. Code § 8412 subd. (a).)

AT&C argues that Claunch did not serve the statutorily required preliminary notice, and that AT&C was not aware that Claunch had performed any work at the property until December 2023. (Sheng Decl. ¶¶ 4-5.) AT&C further argues that the work was completed on September 28, 2023, thus requiring that the lien be recorded by December 27, 2023, however the mechanic’s lien was not recorded until January 25, 2024. (Mot. pp. 2:23-3:2.) AT&C thus argues that because the mechanic’s lien is invalid, the lis pendens is invalid. (Mot. p. 3:3:17.)

In opposition, Claunch argues that he was not required to provide preliminary notice because he was a director contractor with AT&C. He argues that AT&C was aware of the work being done at the property because the improvements were clearly visible from the outside, AT&C knew of and allowed Auxin to make improvements to the Property necessary to run a cannabis business, and Claunch spoke with various individuals who purported to be the owner’s agent. (Claunch ¶¶ 2-7.) Claunch further argues that he completed work at the property on November 3, 2023, and thus the lis pendens filed on January 25, 2024 is timely. (Claunch Decl. ¶ 8.)

In Claunch’s supplemental brief to his opposition, he argues that the lease agreement between AT&C and Auxin explicitly states that Auxin intended to convert the Property into a cannabis grow, and that AT&C thus knew that this conversion would require electrical upgrades. (Supp. Opp. p. 3:5-9.) Additionally, Claunch argues that the lease agreement required Auxin to provide invoices to AT&C of all improvements done at the property. (Supp. Opp. p. 4:6-8.) Lastly, Claunch asserts that AT&C knew of the electrical improvements being done at the Property because there was a permit pulled for electrical work at the Property which was submitted by a company called Q3 Builders that lists AT&C as the owner of the building. (Supp. Opp. pp. 4:19-5:3.)

In its reply, AT&C again asserts that it had no knowledge of Claunch’s work at the property. The ‘agents’ Claunch mentions have no affiliation with and are not employed by AT&C. (Reply p. 2:1-3.) AT&C believes that these individuals are agents of the business owner (i.e. Auxin’s agents) not agents of the building owner. (Reply p. 1:2-4; Add’l. Sheng Decl. ¶ 3.) AT&C argues that Claunch’s claim—that AT&C must have been aware of the electrical work because it knew Auxin was operating a cannabis grow on the Property—is illogical because the lease agreement began in December 2017, more than four years before Claunch's work at the Property. (Reply pp. 2:22-3:2.) Additionally, AT&C asserts that despite the requirement in the lease agreement, Auxin never provided it with any invoices for electrical work. (Reply p. 3:9-13; Addtl. Sheng Decl. ¶ 4.) Finally, AT&C asserts that it has no knowledge of Q3 Builders and the electrical permit was neither submitted by nor signed by a representative of AT&C. (Reply p. 3:14-20; Addtl. Sheng Decl. ¶ 6.)

Here, there is no evidence of a contractual relationship between Claunch and AT&C. There is also no evidence that Claunch’s labor was “provided at the request of or agreed to by the owner.” (Civ. Code § 8404 subd. (a).) Claunch’s arguments about the terms of the lease agreement do not lend themselves to an understanding that AT&C had actual knowledge of the electrical work completed by Claunch at the Property, or that the work was “not only contemplated and intended but contracted” for the operation of the property for “storage and cultivation” which was specified in the lease. (Cf. Los Banos Gravel Co. v. Freeman (1976) 58 Cal.App.3d 785, 797.) Thus, because Claunch was not AT&C’s direct contractor, the preliminary notice required by Civil Code section 8200 was a “necessary prerequisite to the validity of [his] lien claim.” (Civ. Code §§ 8200 subds. (a) and (d).)

Accordingly, the mechanic’s lien and related lis pendens are both invalid. Because the lack of preliminary notice is determinative on this issue, the Court does not reach the question of whether the lis pendens was filed within ninety (90) days of Claunch’s last day of work at the Property.

D. Request for Attorneys’ Fees

The court shall direct that the party prevailing on any motion under this chapter be awarded the reasonable attorney’s fees and costs of making or opposing the motion unless the court finds that the other party acted with substantial justification or that other circumstances make the imposition of attorney’s fees and costs unjust. (Code Civ. Proc., § 405.38.) 

AT&C’s counsel requests attorneys’ fees and costs in the total amount of $6,324.29. The request is based upon counsel’s rate of $450.00/hour for 13.0 total hours of work as follows: (1) 8.0 hours in preparing the motion, related declarations, and evidence (2) 3.0 hours to review the opposition and prepare a reply, (3) 2.0 hours to attend the hearing, (4) $461.17 in court fees, and (5) $13.12 in filing fees for the reply. (Suh Decl. ¶ 5.)

The Court finds that $450/hour is reasonable. The time expended is also reasonable. Thus, AT&C’s request for attorneys’ fees is GRANTED in the total amount of $6,324.29.

III. Conclusion

AT&C Investment, LLC’s Motion to Expunge Lis Pendens and Mechanics Lien is GRANTED.

AT&C Investment, LLC’s Request for Attorneys’ Fees is GRANTED in the amount of $6,324.29.