Judge: Carolyn M. Caietti, Case: 37-2021-00001675-CU-FR-CTL, Date: 2024-01-05 Tentative Ruling
SUPERIOR COURT OF CALIFORNIA,
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HALL OF JUSTICE
TENTATIVE RULINGS - January 04, 2024
01/05/2024 10:30:00 AM C-70 COUNTY OF SAN DIEGO
JUDICIAL OFFICER:Carolyn Caietti
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Civil - Unlimited Fraud Motion Hearing (Civil) 37-2021-00001675-CU-FR-CTL MIKE'S LIMITED INVESTMENTS LLC VS ONTIVEROS [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion to Expunge Lis Pendens, 12/08/2023
Defendants Felipe Ontiveros and Norma Valverde's Motion to Expunge Lis Pendens and for Attorney Fees and Costs is DENIED.
Preliminary Matters The Court previously ordered this case to arbitration. On August 29, 2023, the Court approved the parties' stipulation to return the case back to the Superior Court. (ROA 88.) The Court has jurisdiction to hear the matter.
Plaintiff's opposition request for judicial notice (ROA 117) Nos. 1-3 and 5-7 are granted. No. 4 is denied as the exhibit is not provided. (Cal. Rules of Ct., rules 3.1113(l), 3.1306(c).) Defendants' reply request for judicial notice (ROA 125) is granted.
Defendants' reply objections to the Declaration of Jaimie Griffin (ROA 127) are overruled.
Defendants' reply objections to the Declaration of Edgardo Masanes (ROA 128) are overruled.
Defendants' reply objections to the Declaration of Michael Wickware (ROA 129) are overruled.
Defendants' reply objections to Plaintiff's request for judicial notice (ROA 131) are overruled.
The Court considered the 'amended' declarations of Felipe Ontiveros and Norma Valverde (ROA 102, 103).
The Court also considered Plaintiff's late opposition.
Discussion '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...' (C.C.P., § 405.30.) There are several grounds to expunge a lis pendens. Here, the motion focuses on the failure to establish the probable validity of the real property claim. For this ground, the burden is on the plaintiff-claimant to Calendar No.: Event ID: TENTATIVE RULINGS
2993822 33 CASE NUMBER: CASE TITLE: MIKE'S LIMITED INVESTMENTS LLC VS ONTIVEROS [IMAGED] 37-2021-00001675-CU-FR-CTL establish, by a preponderance of the evidence, the probable validity of the real property claim. (C.C.P., §§ 405.30, 405.32, 481.190 ['A claim has 'probable validity' where it is more likely than not that the plaintiff will obtain a judgment against the defendant on that claim.'].) This requires the judge to consider the merits of the plaintiff's claim. (Kirkeby v Superior Court (2004) 33 Cal.4th 642, 651; Howard S. Wright Constr. Co. v Superior Court (2003) 106 Cal.App.4th 314, 319 (plaintiff must 'at least' establish a prima facie case); see also, Amalgamated Bank v Superior Court (2007) 149 Cal.App.4th 1003, 1012 (the trial court may need to conduct a 'minitrial').) A court must grant the motion to expunge the lis pendens when, although a real property claim has been pleaded, it lacks evidentiary merit. (Park 100 Inv. Group II v Ryan (2009) 180 Cal.App.4th 795, 813.) Here, Plaintiff met its burden. The FAC asserts causes of action for specific performance, declaratory relief, breach of contract and fraud. To prevail on a cause of action for breach of contract, the plaintiff must prove: (i) the contract; (ii) the plaintiff's performance of the contract or excuse for nonperformance; (iii) the defendant's breach; and (iv) resulting damage to the plaintiff. (Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186.) Here, it is undisputed the parties entered into a written agreement for the purchase of a 3-unit residential income property. (Amended Decl. of Norma Valverde, at Ex. 1.) The agreement was amended several times throughout the transaction. (Id., at Ex. 8, 18, 21, 22.) The original closing date was on November 20, 2020.
As provided by Plaintiff, during escrow, it hired and paid for contractors to make substantial repairs to the property to qualify for FHA financing, which was allowed under Amendment 2. (Valverde Decl., at Ex. 18 ['Buyer to have option of closing with FHA financing.'].) The extent of the required repairs, the length of time needed to complete the FHA appraisal process and lack of cooperation from Defendants, among other reasons such as COVID-19 restrictions, delayed the transaction from closing on November 20.
(ROA 112 – Declaration of Michael Wickware, at ¶¶ 5-9.) Notwithstanding, and without yet providing evidence of clear and marketable title three days before closing as also required by Amendment 2, a day later, the seller made a demand for Plaintiff to close in three days and ordered all FHA work to stop.
(Wickware Decl., at ¶¶ 10-16.) Plaintiff objected to seller's demand to close. (Valverde Decl., at Ex. 24 (citing amount of repair work to be completed, COVID-19 restrictions, the Thanksgiving holiday, time to conduct an FHA inspection, Seller's failure to provide necessary tenant estoppels and proof of clear and marketable title).) Timeliness provisions are strictly enforced unless there is a waiver by the party for whose benefit they are made. (Galdjie v. Darwish (2003) 113 Cal.App.4th 1331, 1339, 1342 (affirming the trial court's ruling time provisions were waived when, after stating 'that time would not be extended' past a date certain, the seller 'stayed in communication with respondent and approv[ed] and assist[ed] his efforts to locate a willing lender' and did not reestablish time conditions by giving notice the deal must close by a date certain).) Plaintiff provided evidence of a waiver of the term to close on November 20. Thereafter, Defendants expressed a desire to continue the transaction by permitting Plaintiff's workers to come back on the property and for the FHA repair work to resume. (Wickware Decl., at ¶¶ 19-21.) While the FHA repairs were being completed the parties continued to exchange additional offers to one another to further modify the agreement, although none of the additional written offers were accepted by all parties. (See, Valverde Decl., at Ex. 26, ¶ 86.) After the repairs were finished, the FHA appraisal was completed and the FHA loan documents were received in escrow, Defendants sent a notice to cancel the transaction immediately without making a demand to close as required by the parties' agreement. (Ex. 1.) Plaintiff objected to Defendants' attempt to cancel the transaction. As of January 9, 2021, all documents were signed by Plaintiff to fund the loan and close escrow under the agreement. (Wickware Decl., at ¶ 30.) Defendants' refused to close on the transaction. (Id., at ¶ 31.) This is evidence Defendants' breached the agreement.
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2993822 33 CASE NUMBER: CASE TITLE: MIKE'S LIMITED INVESTMENTS LLC VS ONTIVEROS [IMAGED] 37-2021-00001675-CU-FR-CTL The facts are hotly disputed and open to dual interpretation of what happened. A jury might readily find in favor of Defendants' interpretation of the facts. But collectively, there is evidence showing it is more likely than not that Plaintiff will obtain a judgment against Defendants on their breach of contract claim, and accordingly, the specific performance and declaratory relief claims. Thus, the Court will not order the lis pendens expunged. Accordingly, Defendants' request for attorney fees and costs is also denied.
Plaintiff's request for attorney fees and costs is also denied. Substantial justification existed for bringing this motion. (C.C.P., § 405.38.) For these reasons, the motion is DENIED.
If the tentative ruling is confirmed without modification, the minute order will be the Court's final order.
Defendants are ordered to serve written notice of the Court's final order on all appearing parties by January 9, 2024, unless all parties submit on the Court's tentative ruling or waive notice at the hearing.
Plaintiff is reminded to comply with Department 70's Policies and Procedures and to provide courtesy copies of all motion paperwork.
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