Judge: John J. Kralik, Case: 24BBCV00136, Date: 2024-04-12 Tentative Ruling

Case Number: 24BBCV00136    Hearing Date: April 12, 2024    Dept: NCB

Superior Court of California

County of Los Angeles

North Central District

Department B

BACKGROUND

A.    Allegations

Plaintiffs Vigan Sardariani (“Sardariani”) and V&S Complete Auto Repairs, Inc. (“V&S”) allege that this action involves a 22-year-old lease relationship between Sardariani and Defendant Roland Markarian (“Markarian”).  Plaintiffs allege that Markarian rented the leased premises located at 7139 Foothill Blvd. in Tujunga on May 1, 2002 subject to the lease agreement.  Plaintiffs allege that Markarian sued Plaintiffs on May 11, 2022 in Pasadena Case No. 22PDUD00815, Markarian v. Sardariani.  On June 8, 2016, Markarian, without notice to Plaintiffs, transferred ownership of the leased property to Defendant RRRM Holding Company, LLC (“RRRM”).  Plaintiffs allege that Markarian and RRRM persuaded Plaintiffs’ sublessor, Defendants Ara Ahanjanyan and Arman Artunyan, to breach their sublease with Plaintiffs.  Plaintiffs allege that on December 29, 2023, RRRM initiated an unlawful detainer action in Burbank Case No. 23BBCV03087, RRRM Holding Company, LLC v. Sardariani.  Plaintiffs allege that RRRM has made false representations that it leased property to Sardariani, that rent had increased (without proper notice), and that RRRM performed all terms an condtions on the lease when it had not. 

The first amended complaint (“FAC”), filed March 14, 2024, alleges causes of action for: (1) fraud; (2) intentional concealment; (3) negligent misrepresentation; (4) breach of duty of good faith and fair dealing; (5) breach of contract; (6) tortious interference with prospective economic advantage; (7) negligent interference with prospective economic advantage; (8) intentional interference with contractual relations; and (9) inducing breach of contract.

B.     Motions on Calendar

On March 15, 2024, Sardariani filed a motion to consolidate actions.  On April 2, 2024, Sardariani filed a notice of failure to file an opposition, stating that no opposition was timely filed or received.  On April 5, 2024, RRRM filed the declaration of Zakari re: opposition to the motion to consolidate. 

On March 18, 2024, RRRM filed a motion to expunge lis pendens.  On March 29, 2024, Sardariani filed an opposition brief.  On April 5, 2024, RRRM filed a reply.

DISCUSSION RE MOTION TO CONSOLIDATE

            Sardariani moves to consolidate this case (24BBCV00136) with the following cases pursuant to CCP § 1048(a): (1) RRRM Holdings Co., LLC v. Vigan Sardariani (LASC Case No. 23BBCV03087); (2) V&S Complete Auto Repairs, Inc. v. Ara Ohanjanyan (LASC Case No. 23PDUD04099); and (3) RRRM Holding Co., LLC v. V&S Complete Auto Repairs, Inc. (LASC Case No. 24PDUD00343).  Each of these cases are assigned to Department B of the Burbank Courthouse. 

CCP §1048(a) provides that the Court may order a joint trial on matters that “involve[] a common question of law or fact.”  The four matters essentially involve the same parties, the same attorneys, and the same leased property.  The actions involve common issues of law and fact as they involve the identity of the owner of the property and who has the right of possession to the property. 

In RRRM’s opposition declaration, RRRM argues that it previously filed an opposition on February 29, 2024 to Plaintiff’s ex parte application and that it is unclear if Plaintiffs are giving up their demand for arbitration.  RRRM argues that the cases should be related, but not be stayed or consolidated.

The unlawful detainer statutory scheme “is intended and designed to provide an expeditious remedy for the recovery of possession of real property. [Citation.] Unlawful detainer actions are, accordingly, of limited scope, generally dealing only with the issue of right to possession and not other claims between the parties, even if related to the property. [Citation.]” (Larson v. City and County of San Francisco (2011) 192 Cal.App.4th 1263, 1297; see also Martin–Bragg v. Moore (2013) 219 Cal.App.4th 367, 385 [“In unlawful detainer proceedings, ordinarily the only triable issue is the right to possession of the disputed premises, along with incidental damages resulting from the unlawful detention. [Citations.]”].)

A consolidation may be appropriate when an unlawful detainer proceeding and an unlimited action are simultaneously pending and both raise the same complex title issues. (Martin–Bragg, supra, 219 Cal.App.4th at 385.)  “[T]he trial court has the power to consolidate an unlawful detainer proceeding with a simultaneously pending action in which title to the property is in issue. That is because a successful claim of title by the tenant would defeat the landlord's right to possession.” (Id. [emphasis added].)  Therefore, “[w]hen an unlawful detainer proceeding and an unlimited action concerning title to the property are simultaneously pending, the trial court in which the unlimited action is pending may stay the unlawful detainer action until the issue of title is resolved in the unlimited action, or it may consolidate the actions.”  (Id. [emphasis added].) 

Here, the Court finds that there are issues across the four cases regarding title to the property that can be adjudicated together in an economic and judicious fashion.  Thus, pursuant to CCP § 1048, the cases 24BBCV00136, 23BBCV03087, 23PDUD04099, and 24PDUD00343 will be consolidated.  Case No. 23BBCV03087 shall be deemed the lead case and all future papers are to be filed under that case number.  Trial for the consolidated action is to remain on April 29, 2024, at 9:30 a.m. in this department.  The Final Status Conference is also set to remain on April 18, 2024, at 8:30 a.m. in this department.

DISCUSSION RE MOTION TO EXPUNGE LIS PENDENS

A.    Legal Standard

Under CCP § 405.30, at any time after a notice of pendency of action has been recorded, any party with an interest in the real property may apply to the Court to expunge the notice.  A lis pendens may be expunged either under: (a) CCP § 405.31 if the pleadings do not contain a real property claim or (b) CCP § 405.32 if the Court finds that the party claiming the lis pendens has not established by a preponderance of the evidence the probable validity of the real property claim.  Under CCP § 405.30, the party claiming the lis pendens has the burden of proof under sections 405.31 and 405.32. 

Accordingly, the plaintiff has the burden of demonstrating that their pleadings contain a real property claim and that the probable validity of their real property claim can be established by a preponderance of the evidence.  "Probable validity" exists when "it is more likely than not that the claimant will obtain a judgment on the claim."  (CCP § 405.3.)

B.     Merits of Motion

            RRRM moves to expunge the notice of pendency of action (lis pendens) recorded on February 9, 2024 and requests $4,310 in attorney’s fees and costs.  RRRM argues that Plaintiffs cannot establish strict compliance with the rules related to lis pendens, V&S has no colorable claim to any ownership interest in the subject premises, Plaintiffs do not have a real property interest, and Sardariani does not have a likelihood of prevailing in his action.  

            First, RRRM argues that Plaintiffs have not complied with the requirement to properly asserts a lis pendens because they did not file their notice of lis pendens with the Court or its proof of service.  CCP § 405.22 states:

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. If there is no known address for service on an adverse party or owner, then as to that party or owner a declaration under penalty of perjury to that effect may be recorded instead of the proof of service required above, and the service on that party or owner shall not be required. 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.

(CCP § 405.22 [emphasis added].)  RRRM does not argue that there is any issue with service, but argues that Plaintiffs did not comply with the requirement to file the notice with the Court.  Indeed, Plaintiffs have not filed a copy of the notice following recordation.  In opposition, Sardariani argues that there is no issue with the filing of the notice since RRRM’s motion included a copy of the notice of lis pendens as an exhibit and so RRRM has essentially helped Sardariani comply with the code.  However, by Plaintiffs’ logic, had RRRM not filed a motion, then Plaintiffs’ notice of lis pendens would have been void as no notice was ever filed or would have been filed with the Court.  A copy of the lis pendens still has not been filed by Plaintiffs as a separate document for the Court’s records.  “Substantial compliance contemplates that there is at least some compliance with all of the statutory requirements. [Citation.]”  (Carr v. Rosien (2015) 238 Cal.App.4th 845, 855.)  Thus, for example, had Plaintiffs filed the notice of lis pendens belatedly, there would have been substantial compliance.  Plaintiffs have not substantially complied with CCP § 405.22. 

            Second, RRRM argues that Plaintiffs must show that Markarian intended to sell the subject property to a bona fide third purchaser to trigger Sardariani’s “right of first refusal.”  The Commercial Lease Agreement for the subject premises was entered between landlord Markarian and tenant Saradriani on May 1, 2002.  (FAC, Ex. A.)  The Option to Purchase portion states:

Landlord hereby promises and agrees that should Landlord decide to sell the rental property, which is the subject of this agreement, the Tenant shall have the FIRST OPTION to PURCHASE the said property for the reasonable market value of the property. For the purpose of this agreement the term “sell” includes the transfer of the ownership of said property. Landlord promises to give Tenant at least ninety days (90) advance notice of Landlord’s intention to sell the property.

(Lease at p.3.)  RRRM argues that it did not sell the property to another owner but only “moved ownership” to a business entity, which is in Markarian’s ownership and management, such that there was no sale or change in ownership.  (Mot. at p.6.)  It also argues that Plaintiffs had written notice of RRRM’s ownership interest in the subject property in 2017 when RRRM was added as an additional insured.  In opposition, Sardariani argues that he has a property interest in the premises because any intention to transfer ownership triggered a right for Sardariani to purchase the property. 

            Although RRRM tries to argue that the movement of ownership from Markarian to RRRM does not trigger the Option to Purchase portion of the Lease, RRRM essentially admits that there was some sort of transfer of ownership of the property.  A “transfer of ownership of the property” could fall within the definition of “sell” in the Option to Purchase provision. But this language really creates an ambiguity because it does not make any sense that any possible transfer could trigger the option. It is not meaningful to exercise an “option” when there is no consideration in the transaction and the ownership is simply being moved from one form of ownership to another. What would be the option price?  There are no mechanisms for establishment of an option price in such a case, and therefore to the extent that the contract provides for an option price it is fatally vague.

RRRM also argues that Plaintiffs had notice of RRRM’s ownership in the property around June 4, 2017 when Plaintiffs obtained a Certificate of Liability Insurance naming V&S as the insured and “Roland Markarian/RRRM Limited Liability Corp.” as the additional insured.  (Markarian Decl., Ex. B.)  RRRM argues that Plaintiff had notice of the transfer and his suspicions should have been raised at least in 2017, he waived his right to first refusal, and Plaintiff has waited 6 years to file this lawsuit after the lease expired and was not renewed.   RRRM argues that Plaintiff had 3 or 4 years to file this lawsuit within the statute of limitations period (3 years for fraud/mistake pursuant to CCP § 338(d), slander of title to real property pursuant to CCP § 338(g), or trespass or injury to real property pursuant to CCP § 338(b); or 4 years for breach of contract pursuant to CCP § 337(a)).  Thus, if Plaintiffs wished to contend that the mere transfer of form of ownership triggered the option in some way, they did have actual or at least constructive notice of sufficient facts to assert that claim more than four years before they did so. RRRM provided the insurance document showing that RRRM was an additional insured which should have at least raised constructive notice of RRRM’s ownership or interest in the subject property.  Plaintiffs do not deny receiving the insurance document in 2017 nor have they shown that RRRM intentionally concealed facts from Plaintiffs to toll the statute of limitations. 

            Finally, RRRM argues that Plaintiffs have the burden of establishing that there was a “sale” to a bona fide third-party purchaser.  RRRM relies on Campbell v. Alger (1999) 71 Cal.App.4th 200, which states:

A right of first refusal is the “conditional right to acquire ... property, depending on the [owner's] willingness to sell.” (6 Miller & Starr, Cal. Real Estate (2d ed. 1989) § 18:110, p. 317.) The holder of the right merely has the preference to purchase the property over other purchasers if the owner of the property “elects to sell the property.” (Ibid.) The right does not become an option to purchase until the owner of the property voluntarily decides to sell the property and receives a bona fide offer to purchase it from a third party. (Id., at pp. 322-323; Rollins v. Stokes (1981) 123 Cal.App.3d 701, 710 [176 Cal.Rptr. 835].) Normally, the right is enforceable against third persons entering into a contract to buy the property with notice of the holder's right. (6 Miller & Starr, supra, at p. 318.)

(Campbell v. Alger (1999) 71 Cal.App.4th 200, 206–207.)  RRRM argues that there was no transfer of an interest to a third person because Markarian only shifted ownership of the premises to his own business entity.  As noted above, there is something that could be deemed a “transfer of ownership,” but the contract is ambiguous on whether any shift of ownership triggered the option and fatally vague in establishing an option price if it does so provide. The Court finds for the reasons stated above, the Court finds that Plaintiffs have not shown that the complaint asserts a real property claim.  As such, there is substantive merit to granting RRRM’s motion. 

            As such, the motion to expunge the lis pendens is granted. 

C.     Request for Attorney’s Fees and Costs

Under CCP § 405.38, the Court is authorized to award reasonable attorney fees and costs to the prevailing party on a motion to expunge a lis pendens. 

RRRM seeks $4,310 in attorney’s fees and costs against Plaintiffs and their counsel of record.  This accounts for 6.5 hours to prepare the motion, 1 hour to review the opposition and prepare a reply, and 1 hour to appear at the hearing at $500/hour, for a total of $4,250 plus $60 in filing fees. (Zakari Decl., ¶5.) 

Defendant is the prevailing party on this motion.  The Court awards attorney’s fees in the reasonable amount of $3,000, plus $60 in filing fees.  Plaintiffs and their counsel of record, jointly and severally, are ordered to pay reasonable attorney’s fees and costs to Defendant, by and through defense counsel. 

CONCLUSION AND ORDER

Plaintiff Vigan Sardariani’s motion to consolidate the actions is granted.    Pursuant to CCP § 1048, the cases 24BBCV00136, 23BBCV03087, 23PDUD04099, and 24PDUD00343 will be consolidated.  Case No. 23BBCV03087 shall be deemed the lead case and all future papers are to be filed under that case number.  Trial for the consolidated action is to remain on April 29, 2024, at 9:30 a.m. in this department.  The Final Status Conference is also set to remain on April 18, 2024, at 8:30 a.m. in this department. 

Defendant RRRM Holding Company LLC’s motion to expunge lis pendens is granted.  Plaintiffs and their counsel of record, jointly and severally, are ordered to pay reasonable attorney’s fees and costs in the amount of $3,600 to Defendant, by and through defense counsel. 

Each party shall give notice of their respective order.   

DATED:  April 12, 2024                                                        ___________________________

                                                                                          John Kralik

                                                                                          Judge of the Superior Court