Judge Holly J. Fujie, Case 22STCV05247 2022-08-31 Tentative Ruling

This action arises out of a dispute concerning real property (the “Property”). The currently operative first amended complaint (the “FAC”) alleges: (1) quiet title; and (2) action to cancel recorded lis pendens.

The relevant allegations of the FAC are as follows: On or about July 9, 2015, the trustee for the bankruptcy estate (the “Trustee”) of Morad Javedanfar (“Javedanfar”) filed a lawsuit against MBN Real Estate Investments, LLC (“MBN”). (FAC ¶ 5.) The Trustee’s lawsuit against MBN alleged that Javedanfar had fraudulently transferred fractional interests related to three properties, including the Property. (Id.) The Trustee recorded a lis pendens against the Property in connection to the fraudulent transfer lawsuit. (FAC ¶ 7.) Despite the Trustee’s allegations, MBN does not own a fractional interest in the Property; rather, MBN is one of four members of a limited liability company that owns the Property. (FAC ¶ 6.) As a result, although Plaintiff has not been accused of participating in a fraudulent transfer, its interest in the Property has been clouded by the lis pendens. (FAC ¶ 7.)

Moving Defendant purchased the Trustee’s fraudulent transfer claim against MBN. (FAC ¶ 8.) Moving Defendant obtained a judgment against MBN in the fraudulent transfer action, which required it to refrain from transferring its interest in the Property. (FAC ¶ 9.) Moving Defendant has not removed the lis pendens from the Property. (FAC ¶ 8.)

Moving Defendant filed a demurrer (the “Demurrer”) to the FAC on the grounds that the FAC fails to allege sufficient to state a cause of action and Plaintiff failed to join the Trustee as a defendant.

The Court notes that Moving Defendant has made requests for judicial notice in the body of the Demurrer. California Rules of Court (“CRC”), rule 3.1113(l) requires requests for judicial notice to be made in a separate document listing the specific items for which notice is requested. (CRC, r. 3.1113(l).) As they are not in compliance with CRC Rule 3.1113(l), the Court declines to rule on Moving Defendant’s requests.

A demurrer tests the sufficiency of a complaint as a matter of law. (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1358.) The court accepts as true all material factual allegations and affords them a liberal construction, but it does not consider conclusions of fact or law, opinions, speculation, or allegations contrary to law or judicially noticed facts. (Shea Homes Limited Partnership v. County of Alameda (2003) 110 Cal.App.4th 1246, 1254.) With respect to a demurrer, the complaint must be construed liberally by drawing reasonable inferences from the facts pleaded. (Rodas v. Spiegel (2001) 87 Cal.App.4th 513, 517.) A demurrer will be sustained without leave to amend if there exists no reasonable possibility that the defect can be cured by amendment. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

Under California Code of Civil Procedure (“CCP”) section 761.020, to state a cause of action for quiet title, the plaintiff must allege in a verified pleading: (1) the legal description and common designation or street address of the property; (2) the plaintiff's title or interest and the basis; (3) the defendants asserting adverse claim or antagonistic property interest; (4) the date as of which the determination is sought; and (5) a prayer for determination of title. (CCP § 761.020.)

The FAC does not sufficiently allege a quiet title claim. The FAC is not a verified pleading and does not allege a legal description of the Property, the nature or basis of Plaintiff’s title or interest, or a date as of which the determination of title is sought.[1] The Court therefore SUSTAINS the Demurrer with 20 days leave to amend.[2]

Under Civil Code section 3412, a written instrument, with respect to which there is a reasonable apprehension that if left outstanding it may cause serious injury to a person against whom it is void or voidable, may, upon his application, be so adjudged, and ordered to be delivered up or canceled. (U.S. Bank National Association v. Naifeh (2016) 1 Cal.App.5th 767, 788.) To prevail on a claim to cancel an instrument, a plaintiff must prove: (1) the instrument is void or voidable due to, for example, fraud; and (2) there is a reasonable apprehension of serious injury including pecuniary loss or the prejudicial alteration of one's position. (Id.) In a suit to remove a cloud the complaint must state facts, not mere conclusions, showing the apparent validity of the instrument designated, and point out the reason for asserting that it is actually invalid. (M.F. Farming Co. v. Couch Distributing Co. (2012) 207 Cal.App.4th 180, 200.)

The FAC does not allege sufficient facts to show that the lis pendens is void or voidable. The Court therefore SUSTAINS the Demurrer to the second cause of action with 20 days leave to amend.

Should Plaintiff file an amended pleading that does not cure these defects and it is successfully challenged by a meritorious demurrer on these same grounds, the Court will consider sustaining said demurrer without granting further leave to amend.

In consideration of the current COVID-19 pandemic situation, the Court¿strongly¿encourages that appearances on all proceedings, including this one, be made by LACourtConnect if the parties do not submit on the tentative.¿¿If you instead intend to make an appearance in person at Court on this matter, you must send an email by 2 p.m. on the last Court day before the scheduled date of the hearing to¿SMC_DEPT56@lacourt.org¿stating your intention to appear in person.¿ The Court will then inform you by close of business that day of the time your hearing will be held. The time set for the hearing may be at any time during that scheduled hearing day, or it may be necessary to schedule the hearing for another date if the Court is unable to accommodate all personal appearances set on that date.¿ This rule is necessary to ensure that adequate precautions can be taken for proper social distancing.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

[1] While it is not required that a complaint for quiet title allege that the plaintiff recorded a lis pendens, the Court notes that a plaintiff is required to file a lis pendens immediately after filing a quiet title complaint. (See CCP §§ 761.010, subd. (b), 761.020.)

[2] With respect to the arguments about the necessity of joining the Trustee, the Court notes that neither Plaintiff nor Moving Defendant has cited to authority to support their respective decisions.