Judge Gail Killefer, Case Number: MOTIONS, Date: 2024-10-14 Tentative Ruling

Judge: Gail Killefer, Case: MOTIONS, Date: 2024-10-14 Tentative Ruling

Case Number: MOTIONS Hearing Date: October 14, 2024 Dept: 37

HEARING DATE: Monday, October 14, 2024

CASE NUMBER: BC597238

CASE NAME: Anait Akopyan, et al. v. Hovannes Yesayan, et al.

MOVING PARTY: Non-party the Bank of New York Mellon FKA The Bank of New York as Trustee for the Certificateholders CWALT, Inc. Alternative Loan Trust 2005-56 Mortgage Pass-Through Certificates, Series 2005056 (“BNYM”)

OPPOSING PARTY: Defendant WFG National Title Insurance Company

TRIAL DATE: N/A

PROOF OF SERVICE: OK

PROCEEDING: Motion to Intervene and Expunge Lis Pendens

OPPOSITION: None

SUPP. OPP.: 4 October 2024

REPLY: None

SUPP. REPLY: 4 October 2024

RECOMMENDATION: BNYM’s motion to intervene and expunge lis pendens is granted. The court awards BNYM $1,980.00 in attorney’s fees for 6.0 hours of work, plus $60.00 in cost against Cross-Complainant Novastar.

Background

This action arises in connection with property located at 4628 Kingswell Avenue, Los Angeles, California, 90027. Anait Akopyan and Vartan Akopyan (“Plaintiffs”) bring this action seeking to redress “fraudulent and wrongfully recorded deeds of trust” and other documents on the Property even though the Property was never in foreclosure.

Various Defendants filed cross-complaints, including Novastar, LLC (“Novastar”). On April 5, 2017, Novastar filed a cross-complaint in this action seeking monetary damages. Novastar’s Cross-Complaint named Konstantine Kabilafkas and K-Astron Ventures, Inc. as Cross-Defendants. Novastar's Cross-Complaint named Konstantine Kabilafkas and K-Astron Ventures Inc, dba Konstant Closings as Cross-Defendants. The Cross-Complaint alleges the following causes of action: (1) quiet title, (2) fraud, (3) conversion, (4) breach of escrow contract, (5) escrow negligence, (6) breach of escrow fiduciary duty, (7) breach of broker contract, (8) broker negligence, (9) breach of broker fiduciary duty, and (10) negligence of notary public.

On June 10, 2019, the Plaintiffs filed a Notice of Stay of Proceeding due to Bankruptcy. On April 9, 2020, the Plaintiffs and Novastar filed a notice of settlement.

On June 20, 2022, default was entered as to the remaining Cross-Defendants: Tamara Dadyan aka Tammey Dadyan; Konstantine Kabilafkas, K-Astron Ventures, Inc., and Arthur Ayvazyan.

Cross-Defendant Novastar moved for default judgment against the remaining Defendants and on November 29, 2022, the court granted default judgment. Novastar was awarded damages in the amount of $637,500.00 in actual losses, Prejudgment Interest in the sum of $399,790.20, and $8,265.00 in LASC 3.214(a) Attorney Fees, and $43,475.46 in costs incurred pursuant to California Civil Code of Procedure 1033.5, for a Total Judgment amount Jointly and Severally, against the above Cross-Defendants in the sum of $1,089,030.66.

Non-Party, the Bank of New York Mellon FKA The Bank of New York as Trustee for the Certificateholders CWALT, Inc. Alternative Loan Trust 2005-56 Mortgage Pass-Through Certificates, Series 2005056 (“BNYM”) moves to intervene and expunge the lis pendens recorded on May 28, 2019. After the hearing, the court allowed the Parties to submit supplemental briefs. The matter is now again before the court.

Motion to Intervene and Expunge Lis Pendens

I. Legal Standard

A. Leave to Intervene

CCP § 387(d)’s mandatory intervention provision permits intervention upon timely application by a nonparty when either “[a] provision of law confers an unconditional right to intervene or “[t]he person seeking intervention claims an interest relating to the property or transaction that is the subject of the action and that person is so situated that the disposition of the action may impair or impede that person's ability to protect that interest, unless that person's interest is adequately represented by one or more of the existing parties.”¿¿

CCP § 387(d)(2)’s permissive intervention provision allows the court, upon timely application, discretion to “permit a nonparty to intervene in the action or proceeding if the person has an interest in the matter in litigation, or in the success of either of the parties, or an interest against both.” To establish a direct and immediate interest in the litigation for purposes of permissive intervention, a non-party seeking intervention must show that he or she stands to gain or lose by direct operation of the judgment, even if no specific interest in the property or transaction at issue exists.¿ (Simpson Redwood Co. v. State of California (1987) 196 Cal.App.3d 1192, 1201.)¿¿

CCP § 387(c) provides that a nonparty “shall petition the court for leave to intervene by noticed motion or by ex parte application. The petition shall include a copy of the proposed complaint in intervention or answer in intervention and set forth the grounds upon which intervention rests.”¿

B. Expunge Lis Pendens

Pursuant to CCP § 405.32, “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.” “Unlike other motions, the burden is on the party opposing the motion to expunge—i.e., the claimant-plaintiff—to establish the probable validity of the underlying claim.” (Howard S. Wright Construction Co. v. Superior Court (2003) 106 Cal.App.4th 314, 319.) “[T]he plaintiff must at least establish a prima facie case. If the defendant makes an appearance, the court must then consider the relative merits of the positions of the respective parties and make a determination of the probable outcome of the litigation.” (Ibid.) “[O]nly ‘a preponderance of the evidence’ will save a lis pendens once a motion to expunge has been properly made.” (Burger v. Superior Court (1984) 151 Cal.App.3d 1013, 1019.) “If the claimant does plead a real property claim, but the claim pleaded has no evidentiary merit, the lis pendens must be expunged upon motion under [section] 405.32. By expressly distinguishing the concepts of pleading and evidence in this fashion, the statute makes clear that factual merit is also necessary to the maintenance of a lis pendens.” (Palmer v. Zaklama (2003) 109 Cal.App.4th 1367, 1377–78.)

II. Request for Judicial Notice

The court may take judicial notice of “official acts of the legislative, executive, and judicial departments of the United States and of any state of the United States,” “[r]ecords of (1) any court of this state or (2) any court of record of the United States or of any state of the United States,” and “[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” (Evid. Code, § 452, subds. (c), (d), and (h).) “Taking judicial notice of a document is not the same as accepting the truth of its contents or accepting a particular interpretation of its meaning.” (Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374.)

Non-party BNYM requests judicial notice of the following:

1) Exhibit 1: Deed of Trust recorded on July 26, 2005, in the Official Records of Los Angeles County as Document No. 05 1764907.

2) Exhibit 2: Assignment of Deed of Trust recorded on February 13, 2012, in the Official Records of Los Angeles County as Document No. 20120241115.

3) Exhibit 3: Notice of Default and Election to Sell Under Deed of Trust recorded on August 30, 2023, in the Official Records of Los Angeles County as Document No. 20230578449.

4) Exhibit 4: Notice of Pendency of Action (Lis Pendens) recorded on May 28, 2019, in the Official Records of Los Angeles County as Document No. 20190487356.

5) Exhibit 5: Abstract of Judgment recorded on May 14, 2019, in the Official Records of Los Angeles County as Document No. 20190440494.

6) Exhibit 6: Novastar, LLC’s Judgment in Support of its Default Prove-up [C.C.P. §585(d)] filed in the above entitled action on November 29, 2022.

BNYM’s request for judicial notice is granted.

III. Discussion

Non-party BNYM asserts that it is the first position mortgage lien (the “Deed of Trust”) recorded against the real property located at 14952 Cobalt St., Sylmar, CA 91342 (the “Sylmar Property”) in the Official Records of the County of Los Angeles on July 26, 2005. (RJN, Ex. 1). The Sylmar Property was used to secure a loan in the principal amount of $700,000.00. The Deed of Trust was subsequently assigned to BNYM. (RJN, Ex. 2.) Tamara Dadyan and Greta Akopyan (the “Borrowers”) defaulted on the loan and BNYM recorded a Notice of Default with Election to Sell Under Deed of Trust on August 30, 2023. (RJN, Ex. 3.) However, due to a Lis Pendens recorded by Novastar, LLC on May 28, 2019, a cloud on the title is present, and BNYM is unable to proceed with the foreclosure. (Witcher Decl., ¶ 6.)

BNYM asserts that on May 14, 2010, Novastar recorded an Abstract of Judgment against Borrower Greta Akopyan (in the total amount of $2,310.00). (RJN, Ex. 5.) After recording the Judgment Lien, Novastar recorded a notice of pendency of action against the Sympar Property on May 29, 2019. (RJN, Ex. 4.) Subsequently, on November 29, 2022, a monetary judgment for $1,089,030.66 was entered in favor of Novastar and against the Borrowers and other defaulted cross-defendants. (RJN, Ex. 6.)

BNYM asserts it is the senior lienholder of the Sylmar Property and this action does not affect its right to foreclose on the property. After this action was dismissed, BNYM tried to convince Novastar to withdraw the Lis Pendens on January 29, 2024, February 8, 2024, February 15, 2024, February 27, 2024, and April 19, 2024. (Witcher Decl., ¶ 8, Ex. A.) BNYM’s counsel asserts that on April 25, 2024, Novastar represented that it would withdraw the Lis Pendens, but no action was taken. (Id.) Instead, Novastar demanded that BNYM pay the judgment lien, despite not being a party to this action. (Id., ¶¶ 13-15, Ex. B.)

A. Motion to Intervene

BNYM asserts it has an unconditional right to intervene because it has an interest as the senior lien holder and current beneficiary of the Deed of Trust in the Sylmar Property. (CPP, § 405.30.) BNYM asserts there is no party currently representing the interests of BNYM in this action who has the same interest in expunging the Lis Pendens. While the enforceability and validity of the Deed of Trust is uncontested, BMYM’s ability to foreclose on the Sylmar Property is directly impeded by the Lis Pendens, thus justifying intervention.

Based on the facts before the court, the court agrees that BNYM’s intervention is necessary and the court grants BNYM’s motion to intervene.

B. Motion to Expunge Lis Pendens

BNYM asserts that expunging the lis pendens is proper because this action has been dismissed, Novastar obtained default judgment only for monetary relief, and there is no present claim for real property. Novastar sought quiet title as to the Property known as 4628 Kingswell Avenue, Los Angeles, CA, but not the Sylmar Property. (Cross-Compl., ¶¶ 2, 35, 97-104.) Novastar was able to obtain monetary relief and the action was dismissed, meaning that there are currently no pending claims affecting title or right of possession. “The history of lis pendens legislation shows a legislative intent to restrict the common law notion of constructive notice.” (BGJ Associates, LLC v. Superior Court (1999) 75 Cal.App.4th 952, 966.) “Its effect is that anyone acquiring an interest in the property after the action was filed will be bound by the judgment.” (Id.) Thus, BNYM contends that Novastar's maintenance of a judgment or judgment lien on the Sylmar Property does not support a continued encumbrance of the Sylmar Property with notice of pendency of action, since no action is pending.

BNYM further maintains that Novastar does not have a real property claim because the action has been dismissed and there is no action that affects the title or right of possession as to the Sylmar Property. The judgment lien and unrecorded judgment obtained by Novastar are purely monetary and Novastar does not assert any interest or claim against title or possession of the Sylmar Property as required by CCP §§ 405.31 and 405.32.

[A]llegations of equitable remedies, even if colorable, will not support a lis pendens if, ultimately, those allegations act only as a collateral means to collect money damages. It must be borne in mind that the true purpose of the lis pendens statute is to provide notice of pending litigation and not to make plaintiffs secured creditors of defendants nor to provide plaintiffs with additional leverage for negotiating purposes.

(Urez Corp. v. Superior Court (1987) 190 Cal.App.3d 1141, 1149.) Therefore, the fact that Novastar may look to the Sylmar Property to collect on its monetary judgment is not sufficient to support a lis pendens because there is no claim for title or possession of real property. “[A]n action for money damages alone will not support a lis pendens.” (Id., at p. 1145.) “The issue is simply whether the action as pleaded is one that affects title or possession of the subject property.” (Id., at p. 1149.)

Novastar failed to oppose this motion and show that its interest in the Sylmar Property is not limited to enforcing a monetary judgment but extends to the title or right of possession of the Sylmar Property. “The party opposing a motion to expunge a lis pendens has the burden to show that a real property claim has been alleged and has probable validity based upon a preponderance of the evidence.” (Nunn v. JPMorgan Chase Bank, N.A.¿(2021) 64 Cal.App.5th 346, 363 citing CCP, §§ 405.32, 405.30.)

C. The Court’s Jurisdiction to Expunge the Lis Pendens

Novastar assigned its Judgment to third party WFG National Title Insurance Company (“WFG”) which asserts that this court lacks jurisdiction to expunge the lis pendens after a judgment has been entered in this action. WFG fails to cite any authority for the proposition that this court lacks jurisdiction to expunge the Lis Pendens. CCP § 405.30 states:

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. However, a person who is not a party to the action shall obtain leave to intervene from the court at or before the time the party brings the motion to expunge the notice. Evidence or declarations may be filed with the motion to expunge the notice. The court may permit evidence to be received in the form of oral testimony, and may make any orders it deems just to provide for discovery by any party affected by a motion to expunge the notice. The claimant shall have the burden of proof under Sections 405.31 and 405.32.

(Id. [bold and italics added].)

Pursuant to section 405.30, BNYM may petition the court to intervene and expunge the Lis Pendens. “Decisions on motions to expunge lis pendens fall into that class of trial court orders which are expressly not appealable; intermediate appellate courts only reach them via petitions for writ of mandate.” (Mix v. Superior Court (2004) 124 Cal.App.4th 987, 996 (Mix) [italics original]; see also CCP, § 405.39.) “Mix therefore held that a trial court confronted with an expungement motion after judgment against the claimant may deny the motion only if the court believes that its own decision will be reversed on appeal.” (Amalgamated Bank v. Superior Court (2007) 149 Cal.App.4th 1003, 1013.) Even on appeal, the trial court generally retains jurisdiction to expunge a lis pendens “unless the trial court is willing to find that the probabilities are that its own decision will be reversed on appeal.” (Mix, at p. 996.) The appellate court may only prevent the expungement of a lis pendens by issuing a stay. (Ibid.; CRC, rule 8.486.)

As Section 405.30 gives BNYM the right to petition the court for expungement of a lis pendens at any time, the court retains jurisdiction to consider the petition. Moreover, despite a judgment existing in this action, WFG fails to cite any case law or facts showing that the judgment in this action would be affected if the Lis Pendens is expunged given that BNYM is the senior lien holder. WFG also fails to cite any case law or statute holding that upon judgment or dismissal of the underlying action, the lis pendens is automatically expunged by operation of law, thus rendering BNYM’s motion moot.

Based on the above, the court grants BNYM’s Motion to expunge the Lis Pendens.

D. BNYM’s Request for Attorney’s Fees

A prevailing party on a motion to expunge a lis pendens is entitled to recover “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.” (CCP § 405.38.) For purposes of attorneys’ fees and costs, a court’s ruling on a motion made pursuant to CCP §§ 405.31 and 405.32 necessarily decides who is the “prevailing party” since such motions place in issue whether the lis pendens was proper. The award of attorney’s fees is only against the losing party, not the losing party’s counsel. (Doyle v. Superior Court (1991) 226 Cal.App.3d 1355, 1359.)

BNYM’s counsel seeks attorney’s fees in the sum of $7,821 for 23.7 hours of work billed at a rate of $330 per hour. (Witcher Decl., ¶¶ 16, 17.) BNYM’s counsel, Rachel C. Witcher, has been practicing law since 2012. Given her experience, the court finds that Witcher’s billing rate of $330.00 per hour is reasonable. Witcher asserts she spent 9.0 hours trying to resolve the matter informally, 9.7 in filing this Motion, and anticipates spending 5.0 hours in preparing an opposition, drafting a reply, and preparing for and attending the hearing on this Motion. (Id., ¶¶ 17, 18.)

While the court recognized that Witcher sent numerous emails to WFG’s counsel in an attempt to get the matter resolved, having reviewed the emails, the court finds that the 9.0 hours billed is excessive. Moreover, given Witcher’s experience, the 9.7 hours billed in drafting and filing this Motion is excessive. Lastly, the Motion is unopposed, and no reply has been filed.

The court awards BNYM $1,980.00 in attorney’s fees for 6.0 hours of work, plus $60.00 in cost against WFG.

Conclusion

BNYM’s motion to intervene and expunge lis pendens is granted. The court awards BNYM $1,980.00 in attorney’s fees for 6.0 hours of work, plus $60.00 in cost against Cross-Complainant Novastar. BNYM to give notice.