Judge: Joel L. Lofton, Case: 23AHCV01455, Date: 2024-03-04 Tentative Ruling
Case Number: 23AHCV01455 Hearing Date: March 4, 2024 Dept: X
Tentative Ruling
Judge Joel L. Lofton, Department X
HEARING DATE: March 4, 2024 TRIAL DATE: No date set.
CASE: T’S AND SONS’ LLC v. CLEAR POINT CAPITAL, LLC, and DOES 1-10, inclusive.
CASE NO.: 23AHCV01455
MOTION TO EXPUNGE LIS PENDENS
MOVING PARTY: Defendant Clear Point Capital, LLC
RESPONDING PARTY: Plaintiff T’s and Sons’ LLC
SERVICE: Filed February 13, 2024
OPPOSITION: Served February 26, 2024
REPLY: No reply filed.
RELIEF REQUESTED
Defendant moves to expunge lis pendens recorded against the Subject Property.
BACKGROUND
This case arises out of Plaintiffs T’s and Sons’ LLC’s (“Plaintiff”) claim that Defendant Clear Point Capital, LLC (“Defendant”) breached an agreement to sell property located at 309 Oaklawn Avenue, South Pasadena, California (“Subject Property”) to Plaintiff. Plaintiff filed its complaint on June 27, 2023.
TENTATIVE RULING
Defendant’s motion to expunge lis pendens for the Subject Property is GRANTED.
REQUESTS FOR JUDICIAL NOTICE
Defendant’s request for judicial notice is GRANTED as to Exhibit B pursuant to Evidence Code section 452, subdivision (c).
LEGAL STANDARD
“A party who asserts a claim to real property can record a notice of lis pendens, which serves as notice to prospective purchasers, encumbrancers and transferees that there is litigation pending that affects the property.” (J & A Mash & Barrel, LLC v. Superior Court of Fresno County (2022) 74 Cal.App.5th 1, 15 (“J & A Mash”.) “ ‘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,’ commonly known as a lis pendens. (§ 405.20.) Such a party is a “ ‘[c]laimant’ ” for purposes of the lis pendens statute. (§ 405.1.) Once recorded, any party with an interest in the property can move to expunge the lis pendens pursuant to the procedure set forth in section 405.30.” (Id. at p. 16.)
DISCUSSION
Defendant moves to expunge lis pendens recorded against the Subject Property. On June 27, 2023, Plaintiff filed the present action alleging two causes of action for specific performance and breach of contract. On June 28, 2023, Plaintiff recorded a lis pendens for the Subject Property. (RJN Exhibit B.) Defendant specifically bases the present motion on the grounds that Plaintiff is not able to establish probable validity of its claims.
“A comment to section 405.30 identifies four bases upon which expungement may be sought: (1) the lis pendens is void and invalid (§ 405.23), (2) the action as pleaded does not contain a real property claim (§ 405.31), (3) the claimant fails to establish the probable validity of the claim (§ 405.32), and (4) monetary relief provides an adequate remedy (§ 405.33).” (J & A Mash, supra, 74 Cal.Ap.5th at p. 16.)
Defendant provides that in April of 2023, it initially entered into escrow to purchase the Subject Property wholesale with the intent of selling it to another buyer. (Williams Decl. ¶ 2.) Defendant provides that on April 16, 2023, it received an all-cash offer with no contingencies from Plaintiff’s managing member for a purchase price of $1,900,000.00. (Id. ¶ 4.) Defendant accepted the offer on April 17, 2023. (Id. ¶ 7.) Afterwards, Plaintiff, in accordance with the agreement, provided a verification of funds showing sufficient funds in Plaintiff’s bank account for the purchase. (Id. ¶ 8.) However, afterwards, Plaintiff provided another verification of funds that demonstrated that it did not have sufficient funds to make the cash payment. (Id. ¶ 9.)
Escrow was initially set to close on May 5, 2023, but the deadline was extended twice with a final date set for June 20, 2023. (Williams Decl. ¶ 10.) Defendant provides it performed under the contract by executing closing documents. (Id. ¶ 11.) Defendant provides that Plaintiff was never able to close escrow because it did not have sufficient cash and was not able to obtain financing. (Id. ¶ 13.) Defendant provides that on June 20, 2023, it sent Plaintiff a demand to close escrow within three days or face cancellation of the agreement. (Id. ¶ 15.) After the three-day period elapse without close of escrow, Defendant cancelled the agreement. (Id. ¶ 16.)
The essential elements of a breach of contract are: (1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) the defendant’s breach, and (4) the resulting damages to the plaintiff. (Green Valley Landowners Assn. v. City of Vallejo (2015) 241 Cal.App.4th. 425, 433.)
“[T]he court is required to expunge a lis pendens ‘if the court finds that the claimant has not established by a preponderance of the evidence the probable validity of the real property claim.’ ” (Kirkeby v. Superior Court (2004) 33 Cal.4th 642, 651.) “Unlike other motions, nonmoving parties must demonstrate the existence or probable validity of their real property claims. [Citation.] Probable validity ‘means that it is more likely than not that the claimant will obtain a judgment against the defendant on the claim.’ ” (§ 405.3.) (De Martini v. Superior Court of San Mateo County (2024) 317 Cal.Rptr.3d 441, 448.)
Here, Plaintiff bears the burden to establish probable validity. Thus, although Defendant’s exhibits set the groundwork for this court, Plaintiff ultimately must demonstrate that it is “more likely than not” that it will obtain judgment. In opposition, Plaintiff broadly contends that it did not breach because it was always able to pay the agreed-upon price and that Defendant was actually the party who breached the agreement.
Plaintiff’s arguments, however, fail. Plaintiff bears the burden here, and in support of its opposition, Plaintiff attaches no exhibits or evidence. Plaintiff’s only evidentiary support is the declaration of Mahammed Taufiq, who provides that he did have funds sufficient to purchase the property. (Taufiq Decl. ¶ 5.) However, that is not sufficient to establish “that it is more likely than not that the claimant will obtain a judgment against the defendant on the claim.” (Code Civ. Proc. § 405.3.)
Code of Civil Procedure section 405.38 provides: “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.” “Trial courts should liberally impose these sanctions upon any who file fraudulent transfer actions and record notices of lis pendens before uncovering credible evidence of fraud.” (Huntington World, Inc. v. Superior Court (1994) 22 Cal.App.4th 67, 74.)
Here, because Defendant has not requested sanctions, the court finds it would be unjust to impose sanctions without notice of this issue.
CONCLUSION
Defendant’s motion to expunge lis pendens for the Subject Property is GRANTED.
Moving party to give notice
Dated: March 4, 2024 ___________________________________
Joel L. Lofton
Judge of the Superior Court
Parties who intend to submit on this tentative must
send an email to the court indicating their
intention to submit.
alhdeptx@lacourt.org