Judge Holly J. Fujie, Case Number: 23STCV31795, Date: 2024-08-22 Tentative Ruling

DEPARTMENT 56 JUDGE HOLLY J. FUJIE, LAW AND MOTION RULINGS. The court makes every effort to post tentative rulings by 5.00 pm of the court day before the hearing. The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)], and are also available in the courtroom on the day of the hearing [see CRC 3.1308(b)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) call Dept 56 by 8:30 a.m. on the day of the hearing (213/633-0656) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no telephone call is necessary and all parties should appear at the hearing in person or by Court Call. Court reporters are not provided, and parties who want a record of motions and other proceedings must hire a privately retained certified court reporter.

MOVING PARTY: Defendants Pacific Crest Realty Advisors, LLC (the “Receiver”) and Sidney Constantinescu (“Constantinescu”) (collectively, “Defendants”)

The Court has considered the moving papers. No opposition has been filed. Any opposition was required to have been filed and served at least nine court days prior to the hearing. (Code Civ. Proc., § 1005, subd. (b).)

This case arises from a purchase agreement pertaining to the property located at 3500 West Manchester Boulevard, Unit 421, Inglewood, California (“Property”). Plaintiffs Anonymity Assets LLC (“Anonymity”) and Victoria Green (“Green”) (collectively, “Plaintiffs”) filed a complaint against Defendants asserting a sole cause of action for breach of contract (specific performance).

On May 3, 2024, Defendants filed a Motion for Leave to File Cross-Complaint. On May 30, 2024, Defendants filed a Motion to Expunge Lis Pendens and Recover Costs and Fees. Plaintiffs did not file an opposition to either motion.

“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…The claimant shall have the burden of proof under Sections 405.31 and 405.32.” (C.C.P. §405.30.) The “claimant” is the “party to an action who asserts a real property claim and records a notice of the pendency of the action.” (C.C.P. §405.1.)

A lis pendens must be removed for being improper on account of (a) the¿pleading on which the notice is based¿not containing a real property claim, assuming the allegations to be true, or¿(b) the claimant not being able to establish by a preponderance of the evidence the probable validity of the real property claim.¿ (C.C.P. §§ 405.31, 405.32; Ziello v. Superior Court¿(1995) 36 Cal.App.4th¿321, 331-32; Urez Corp. v. Superior Court¿(1987) 190 Cal.App.3d 1141, 1149.)¿¿¿

A real property claim means the causes of action, if proven, would affect either: (a) title to or the right to possession of specific real property, or (b) the use of an easement identified in the pleading.¿ (C.C.P. § 405.4.)¿ In determining whether a real property claim has been asserted, the Court engages in a demurrer-like analysis.¿ (Park 100 Investment Group II, LLC v. Ryan¿(2009) 180 Cal.App.4th 795, 808.) ¿¿

The Complaint seeks specific performance of the sale contract, thus seeking ownership of the property at issue. Therefore, the claim affects title, clearing the first prong of the analysis.

A party must show likelihood of prevailing on the merits by admissible evidence. (Burger v. Superior Court¿(1984) 151 Cal.App.3d 1013, 1019.) The standard by which the claimant must establish their chance of prevailing is a preponderance of the evidence. (Ziello v. Superior Court, supra.)

By way of background, Receiver is the Court-appointed receiver in the case entitled Sound Equity High Income Debt Fund, LLC v. Top Flight Investments LLC et al., No. 21STCV13141 (L.A. Super. Ct.) (the “Receivership Action”). (Declaration of Sidney Constantinescu in Support of Motion to Expunge Lis Pendens [“Constantinescu Decl.”], ¶ 2.) The subject Property is among the properties that are part of the receivership. (Id., ¶ 5.)

When the Receiver started carrying out its duties, Constantinescu, its principal, found out that Green was living at the Property. Green claimed to have an agreement with Top Flights Investments LLC that allowed her to purchase the Property. Green, however, could not provide this agreement and refused to pay rent. As a result, Receiver filed an unlawful detainer action against her. (Id., ¶¶ 6-8.)

Shortly before trial of the unlawful detainer action, Green and Receiver executed a Settlement, Release and Property Purchase Agreement pursuant to which Green was to purchase the Property for the price of $650,000.00. (Id., ¶ 9; Exh. 2.) Subsequently, however, Green informed Receiver that she had assigned her right to purchase the Property to Anonymity, which would make the $100,000.00 deposit. (Id., ¶ 20; Exh. 6.)

On July 31, 2023, Receiver, Green, and Anonymity all executed a “Holding Escrow Agreement” that required a successful close of the sale on August 7, 2023, or Anonymity’s $100,000.00 deposit would be released to the Receiver. (Id., ¶ 21; Exh. 7.) The transaction, however, did not close on the designated date, as Anonymity failed to sign the closing documents and failed to deposit the balance of the purchase price for the Property. (Id., ¶ 26.)

On October 2, 2023, upon motion of Receiver, the Court supervising the Receivership Action (the “Receivership Court”) issued an order granting Receiver’s motion to disburse the $100,000 nonrefundable deposit made by Anonymity pursuant to the Holding Escrow Agreement. (Id., ¶ 29; Exh. 12.) The Receivership Court found the following: “the funds necessary to close the sale were not transferred by the deadline set forth in the Holding Escrow Agreement”; “Anonymity, Green’s assignee, has not paid the purchase price under the Residential Purchase Agreement to the Receiver. [Cite.] Accordingly, Green has not closed the sale by August 7, 2023, the date agreed to by Anonymity and Receiver”; and “[T]he Receiver is entitled to the $100,000 deposit made by Anonymity.” (Id.) The nonrefundable $100,000.00 deposit was then released to Receiver. (Id., ¶ 30.)

Thus, Receiver continued to market the Property for sale, and subsequently received and accepted an offer from a third party. The Receivership Court approved the sale on December 18, 2023. (Id., ¶ 31; Exh. 13.) On December 29, 2023, Anonymity and Green filed this lawsuit. (12/29/2023 Complaint.) Then, on January 2, 2024, Anonymity recorded a lis pendens against the Property. (Constantinescu Decl., ¶ 32; Exh. 17.)

Defendants now bring this motion to expunge lis pendens, arguing that it should be granted because (1) collateral estoppel bars Anonymity’s claim for breach of contract; (2) Anonymity’s lawsuit violates a court injunction; and (3) Anonymity cannot show that it is more likely than not to succeed on the merits.

The Court notes that the Receivership Court’s October 2, 2023 Order discussed above has a collateral estoppel effect on Plaintiffs’ present claim.

Moreover, “[a] buyer seeking specific performance of a contract for the sale of real property has the burden of both pleading and proving that he was ready, willing, and able to perform the contract.” (Am-Cal Inv. Co. v. Sharlyn Ests., Inc. (1967) 255 Cal.App.2d 526, 539.) Since no opposition was filed, Anonymity has not provided any evidence that it was willing and able to perform on the contract. Based on Constantinescu's declaration, on the other hand, and on the Receivership Court’s finding in the Receivership Action, Anonymity did not fund the sale and thus failed to close escrow on the agreed date. (Constantinescu Decl., ¶¶ 26, 32; Exh. 17.) As Plaintiff has provided no admissible evidence that it was ready or able to complete the sale, Plaintiff has failed to provide evidence that its claim for specific performance has a likelihood of prevailing on the merits.

C.C.P. §405.38 provides that, “[t]he court shall direct that the party prevailing on [a motion to expunge lis pendens] 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.”

Defendants request attorneys’ fees and costs, pursuant to C.C.P. §405.38. Defendants’ request, however, is improperly presented to the Court, since Defendant’s motion and supporting declaration are bereft of information to serve as basis for the Court’s determination of reasonable attorneys’ fees and costs. In particular, Constantinescu’s declaration fails to specify the applicable billing rate or the hours each lawyer spent on making the motion. Based on the foregoing, Defendants’ request for attorneys’ fees and costs is DENIED.

Defendants filed a Motion for Leave to File Cross-Complaint for the express purpose of seeking expungement of the lis pendens recorded by Plaintiffs against the Property. (Notice of Motion, p. 1; Declaration of Sidney Constantinescu in Support of Motion for Leave to File Cross-Complaint, Exh. A.)

Since the Court grants the Motion to Expunge Lis Pendens, the Motion for Leave to File Cross-Complaint is MOOT.

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.

Hon. Holly J. Fujie

Judge of the Superior Court