Judge: Joel R Wohlfeil, Case: 37-2023-00023335-CU-OR-CTL, Date: 2023-08-31 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - August 28, 2023

08/31/2023  09:00:00 AM  C-73 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Joel R. Wohlfeil

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Civil - Unlimited  Other Real Property Motion Hearing (Civil) 37-2023-00023335-CU-OR-CTL ENL INVESTMENTS LLC VS SELAK [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion to Expunge Lis Pendens, 07/26/2023

The Motion (ROA # 12) of Defendants Tracy Selak and Joseph Selak ('Defendants') for an order expunging the Notice of Pendency of Action ('Lis Pendens') recorded by Plaintiff ENL INVESTMENTS, LLC ('Plaintiff'), and for an order for attorney fees and costs, is DENIED.

Plaintiff's cross-request for an award of attorney fees is GRANTED in the reasonable amount of $2,400.00.

Defendants' Request (ROA # 26) for judicial notice is GRANTED IN PART and DENID IN PART. The Court takes judicial notice of Exh's 'D,' 'F' and 'I' and the dates only on which Exh's 'B,' 'C,' 'E,' 'G' and 'H' were filed with the Court; otherwise, the Request is DENIED.

The Court must expunge a lis pendens where: (a) the action does not involve a 'real property claim' (Code Civ. Proc. 405.31); or (b) the claimant has not demonstrated the 'probable validity' of the claim (Code Civ. Proc. 405.32). Code Civ. Proc. 405.30.

Unlike most other motions, the burden of proof is on the party opposing the Motion to expunge. Edmon & Karnow, Cal. Prac. Guide: Civ. Pro. Before Trial (The Rutter Group 2023) at ¶ 9:430 (citing Code Civ.

Proc. 405.32).

Plaintiff bears the burden of establishing the existence of a 'real property claim' and that it is 'probably valid.' Id. Opposition Papers, Potential Service Defect The reply argues the declaration of Edward Forrester filed in support of Plaintiff's opposition was not filed and served in a timely manner and should be disregarded. This declaration was filed and served via electronic service on August 22, 2023, which is seven Court days before this hearing. Thus, service is defective by a period of two court days. Code Civ. Proc. 1005(b). However, the Court exercises its discretion to 'prescribe a shorter time.' Id. at (c). The opposition memorandum contains the same information such that the delay did not prejudice Defendants' ability to prepare their reply brief.

Notice of Pendency, Potential Service Defect Defendants mistakenly cite Code of Civil Procedure section 405.20 in support of the following argument: 'Plaintiffs claim is void or invalid because Plaintiff failed to send a copy by registered or certified mail, Calendar No.: Event ID:  TENTATIVE RULINGS

3000193 CASE NUMBER: CASE TITLE:  ENL INVESTMENTS LLC VS SELAK [IMAGED]  37-2023-00023335-CU-OR-CTL return receipt requested to all known addresses of all parties against whom the claim is adverse and to the record owners of the property affected by the claim at the addresses shown in the county assessor's records.' Moving Brief at page 10, lines 4 - 8.

It appears Defendants intended to cite section 405.22, which states, in relevant part: 'Except in actions subject to Section 405.6, the claimant shall, prior to recordation of the notice, cause a copy of the notice to be mailed, by registered or certified mail, return receipt requested, to all known addresses of the parties to whom the real property claim is adverse and to all owners of record of the real property affected by the real property claim as shown by the latest county assessment roll ....

Immediately following recordation, a copy of the notice shall also be filed with the court in which the action is pending. Service shall also be made immediately and in the same manner upon each adverse party later joined in the action.' Defendants' argument is not persuasive for two reasons.

First, the proof of service that accompanies the recorded notice of pendency of action (ROA # 8) appears to indicate that proper service was effectuated.

Second, section 405.22 does not support expungement as the remedy for non-compliance.

Defendants fail to provide any other authority supporting expungement.

Real Property Claim 'Real property claim' means a cause of action 'which would, if meritorious, affect (a) title to, or the right to possession of, specific real property or (b) the use of an easement identified in the pleading, other than an easement obtained pursuant to statute by any regulated public utility.' Code Civ. Proc. 405.4.

The Complaint includes a claim to quiet title that alleges as follows: 'The Plaintiff has, through agreement and action, obtained rightful ownership and title of the Subject Property.' Complaint at ¶ 28.

This is a real property claim supporting a notice of pendency of action. See, e.g., Code Civ. Proc.

761.010(b) ('Immediately upon commencement of the [quiet title] action, the plaintiff shall file a notice of the pendency of the action ....').

Probable Validity of Real Property Claim ''Probable validity,' with respect to a real property claim, means 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.

The standard on a motion to expunge a notice of lis pendens is equivalent to the probable validity standard applicable under the attachment law. Howard S. Wright Construction Co. v. Superior Court (2003) 106 Cal. App. 4th 314, 319.

Plaintiff must at least establish a prima facie case. Id. 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. Id. The 'probable validity' standard in the lis pendens statute can be analogized to the evaluation of Plaintiff's 'likelihood of success' for issuance of a preliminary injunction. Id. at 320.

The Court treats a verified complaint as evidence for purposes of addressing a motion to expunge. See Burger v. Superior Court (1984) 151 Cal. App. 3d 1013, 1019.

Calendar No.: Event ID:  TENTATIVE RULINGS

3000193 CASE NUMBER: CASE TITLE:  ENL INVESTMENTS LLC VS SELAK [IMAGED]  37-2023-00023335-CU-OR-CTL '...[W]e conclude that a plaintiff may rely on a verified complaint to oppose a motion to expunge a lis pendens.' Coppinger v. Superior Court (1982) 134 Cal. App. 3d 883, 889.

Defendants argue the written agreement does not confer an ownership interest because Plaintiff failed to comply with statutory 'requirements' set forth in Probate Code section 11604.5.

The Court has reviewed this code section and it appears to apply: 'This section applies when distribution from a decedent's estate is made to a transferee for value who acquires any interest of a beneficiary in exchange for cash or other consideration.' Id. at (a).

The agreement attached to the Complaint appears to acquire the interest of a beneficiary for value.

Subsection (d)(1) provides: 'A written agreement is effective only if all of the following conditions are met: ...¶ ... The executed written agreement is filed with the court not later than 30 days following the date of its execution or, if administration of the decedent's estate has not commenced, then within 30 days of issuance of the letters of administration or letters testamentary, but in no event later than 15 days prior to the hearing on the petition for final distribution ....' It appears Plaintiff has not complied with this requirement such that the agreement is not 'effective.' In the absence of an enforceable agreement, Plaintiff cannot establish itself as a both a bona fide purchaser or a bona fide encumbrancer and is not likely to prevail.

Defendants also argue Plaintiff cannot establish an adverse possession claim. A claimant, founding title on adverse possession, must establish five elements: (1) possession must be by actual occupation under such circumstances as to constitute reasonable notice to the owner; (2) possession must be hostile to the owner's title; (3) the holder must claim the property as his or her own, either under color of title, or claim of right; (4) possession must be continuous and uninterrupted for five years; and (5) the possessor must pay all of the taxes levied and assessed upon the property during the period. Estate of Williams (1977) 73 Cal. App. 3d 141, 146.

The evidence submitted by Plaintiff consists of the verified Complaint (with the attached written agreement) and the declaration of Edward Forrester, the sole member of ENL Investments. This evidence establishes all elements of the claim for adverse possession. This includes hostile, open and continuous possession since 2017 under a claim of right, given the purported agreement. This also includes payment of the mortgage, taxes and insurance. Thus, Plaintiff has demonstrated the probable validity of the claim for adverse possession and the Motion to expunge is denied on this basis.

Undertaking in Lieu of Notice of Pendency Defendants' moving memorandum briefly references Code of Civil Procedure section 405.33, which states, in part: 'In proceedings under this chapter, the court shall order that the notice be expunged if the court finds that the real property claim has probable validity, but adequate relief can be secured to the claimant by the giving of an undertaking. The expungement order shall be conditioned upon the giving of the undertaking of such nature and in such amount as will indemnify the claimant for all damages proximately resulting from the expungement which the claimant may incur if the claimant prevails upon the real property claim. In its order conditionally expunging the notice, the court shall set a return date for the moving party to show fulfillment of the condition, and if the moving party fails to show fulfillment of the condition on the return day, the court shall deny the motion to expunge without further notice or hearing. Recovery may be had on the undertaking pursuant to Section 996.440.

For purposes only of determining under this section whether the giving of an undertaking will secure adequate relief to the claimant, the presumption of Section 3387 of the Civil Code that real property is Calendar No.: Event ID:  TENTATIVE RULINGS

3000193 CASE NUMBER: CASE TITLE:  ENL INVESTMENTS LLC VS SELAK [IMAGED]  37-2023-00023335-CU-OR-CTL unique shall not apply, except in the case of real property improved with a single-family dwelling which the claimant intends to occupy.' The comment following section 405.30 states: 'A motion to expunge under CCP 405.33 (undertaking where pecuniary relief will suffice) places the burden of proof upon the moving party by operation of Evidence Code 500 and 550. Unless the Court can find that an undertaking would secure adequate relief, the Motion to expunge must be denied. The moving party must therefore file supporting evidence with the moving papers.' Defendants argue Plaintiff can be 'made whole' through an award in the amount of $10,000. However, this amount ignores the time and expenses Plaintiff has invested in the property over the past five years, as described within the Forrester declaration. Defendants have not submitted any evidence establishing that a $10,000 bond (or any other amount) will secure adequate relief. Therefore, Defendants have not satisfied their burden such that this argument is not persuasive.

Attorney Fees '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.' Code Civ. Proc. 405.38.

Defendants request for an award of fees and costs is denied because they did not prevail. Plaintiff also request an award for attorney fees. This Motion was not brought with substantial justification such that an award is permissible. The declaration of Plaintiff's counsel states: '10. From June 22, 2023, (the day our office filed the Notice of Related Cases) to date, our firm has billed 24.53 hours in this matter.

11. Our firm's hourly billing rates range from $300 to $395 / Hour for Attorneys and $150 / Hour for Paralegals. The total amount billed is $7,094.63.' This evidence is problematic for two reasons. First, the declaration does not state the number of hours billed at each hourly rate. Second, any award is limited to the hours incurred opposing this Motion, not hours incurred on unrelated tasks. The Court finds that an award in the amount of $2,400 is reasonable given the amount of hours likely incurred opposing this Motion (8 hours x $300).

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