Judge: Michael P. Linfield, Case: 21STCV33378, Date: 2022-08-31 Tentative Ruling

Case Number: 21STCV33378    Hearing Date: August 31, 2022    Dept: 34

SUBJECT:                         Defendants’ Motion to Expunge Lis Pendens and for Attorney’s Fees

Moving Party:                  Defendants Lin Dee Liu, Ami Kimoto, and Weimin Liu

Resp. Party:                     None

Defendants Lin Dee Liu, Ami Kimoto, and Weimin Liu’s Motion to Expunge Lis Pendens is GRANTED. Defendants’ request for attorney’s fees is GRANTED in part in the amount of $5,625.00 against Plaintiff NIVO.

I.           PRELIMINARY COMMENTS

At Plaintiff’s request, the Court continued this hearing to allow Plaintiff to file a belated opposition.

Plaintiff’s opposition is frivolous.  It cites to paragraphs “88-97”, “102” and “58, 86” the “operative complaint.” (See Opposition at 2:1-9.) However, the operative First Amended Complaint has only 53 paragraphs. 

        Further, Plaintiff argues, without any citation to authority, that “this motion should be stayed pending the results of the appeal.”  (Opposition, p. 3:10.)  “The absence of cogent legal argument or citation to authority allows this court to treat the contentions as waived. (Interinsurance Exchange v. Collins (1994) 30 Cal.App.4th 1445, 1448); “[F]ailure to offer reasoned analysis of [an] issue constitutes a waiver.”  (Trinity Risk Management, LLC v. Simplified Labor Staffing Solutions, Inc. (2021) 59 Cal.App.5th 995, 1009; see also In re Marriage of Falcone & Fyke (2008) 164 Cal.App.4th 814, 830 [“[t]he absence of cogent legal argument or citation to authority allows this court to treat the contentions as waived.”])

        Plaintiff argues that it “recognizes the need to amend the First Amended Complaint to add the wrongful foreclosure claim and add Tonarch.”  (Opposition, p. 3:11-12.)  If Plaintiff believes that it should file a Second Amended Complaint, it can request leave of the Court to do so.  However, such an (unmade) request does not affect the merits of today’s Motion to Expunge the Lis Pendens. 

        Lastly, Plaintiff’s counsel argued at the August 25, 2022 hearing that it had not timely received the Motion and did not file an opposition because it did not want to waive this argument.  However, the Court notes that this argument was not even raised in Plaintiff’s opposition.

At the previous hearing, the Court stated that it thought that Plaintiff was “playing games”; nonetheless, the Court continued the hearing until today to allow Plaintiff to file its opposition, and Defendant to file a Reply.

Having read the opposition, the Court now firmly believes that Plaintiff is playing games.

II.        BACKGROUND

On June 4, 2015, the City and County of San Francisco and the People of the State of California filed the San Francisco Superior Court Case No. CGC-15-546152 against Anne Kihagi and her affiliated entities, resulting ultimately in a bench trial and a decision against Kihagi. The trial court ordered Kihagi to pay damages of some $5.2 million and issued an injunction. (See Uchiyama Declaration, filed 1/11/22, ¶¶ 1, 41.) A second judge made post-judgment rulings adverse to Kihagi. (Uchiyama Declaration, ¶44.) Another judge in a parallel action awarded civil penalties against defendant Kihagi of $489,000. (Uchiyama Declaration, ¶10.)

After these decisions, Plaintiffs obtained a series of loans. Relevant to this dispute is the hard money loan secured by the Duane Property. Kihagi, individually and as the managing and sole member of NIVO, entered into a loan agreement with Kimoto on May 7, 2018 for $600,000.00 secured by the Duane Property (the “Loan”). (Kihagi Decl. ¶ 2, filed 1/11/22, Exh. k-1.) The Loan’s terms included a 12% interest, a $12,000.00 loan fee, and payments to be paid monthly for a year with the balance due thereafter. (Id.)

Plaintiffs never made payments on the Loan leaving an outstanding balance of $1,073,944.36 as of September 10, 2021. (Liu Decl., filed 9/15/2021, ¶ 5.)

On March 15, 2021, Notice of Sale was recorded in the office of the Los Angeles County Recorder as Document No. 20210411669. (Id., Exh. C.)

On September 10, 2021, Plaintiffs filed an unverified complaint against Defendants alleging nine causes of action.  On October 29, 2021, Plaintiff filed a First Amended Complaint alleging the following causes of action:

1.           Breach of fiduciary duty;

2.           Violation of real estate law;

3.           Recission due to violation of usury law and UCL, as well as breach of fiduciary duty;

4.           Negligent misrepresentation;

5.           Violation of Business and Professions Code § 17200;

6.           Declaratory relief, accounting, restitution.

On December 17, 2021, Defendants Lin Dee Liu dba Lin Dee Liu Services and Ami Kimoto (“Defendants”) filed a motion for a vexatious litigant order against Anne Kihagi.

On January 24, 2022, Defendants' motion for a vexatious litigant order was granted. Pursuant to Code of Civil Procedure Section 391.7(a), Anne Kihagi is prohibited from filing any new litigation in the courts of this state in propria persona without first obtaining leave of the presiding judge or justice of the court where it is to be filed.

On February 23, 2022, a Notice of Appeal was filed with the Court to announce that on January 24, 2022, Anne Kihagi appealed the Court's order under CCP section 391.1 et seq. for bond and injunction.

On March 15, 2022, Plaintiff Anne Kihagi filed a Motion to Vacate the Court's Order of January 24, 2022 to Declare Plaintiff a Vexatious Litigant Based Upon Order Being Void.

On April 12, 2022, the Court denied Plaintiff Anne Kihagi's Motion to Vacate Court’s Order of January 24, 2022 Declaring Plaintiff a Vexatious Litigant. (Minute Order, April 12, 2022, p. 1.)

On August 1, 2022, Defendants Lin Dee Liu, Ami Kimoto, and Weimin Liu moved the Court "pursuant to California Code of Civil Procedure Sections 405.30, 405.31, and 405.32, for an order expunging the lis pendens filed in this action and recorded as Document No. 20211825205 in the Los Angeles County Recorder's Office (the "Lis Pendens") by Plaintiff NIVO-1, LLC ("NIVO").” (Motion, p. 1:5-8.)

The motion to expunge the lis pendens was unopposed on August 25, 2022 – the day this motion was originally scheduled to be heard.  At the hearing, Plaintiff stated that it had not received the entire Motion and didn’t file an opposition because it believed that filing an opposition would have waived its right to contest improper service.   The Court stated at the time that it thought that Plaintiff was “playing games”; nonetheless, the Court continued the hearing until today to allow Plaintiff to file its opposition, and Defendant to file a Reply.

Having read the opposition, the Court reiterates that it believes that Plaintiff is playing games.

III.     ANALYSIS

A.          Legal Standard

1.           Expunge Lis Pendens

When an action involves a claim affecting real property, a party to the action may, by recording a notice of lis pendens, preserve his or her rights or interest, if any, in the real property pending the final determination of the action. (La Paglia v. Sup. Ct. (1989) 215 Cal.App.3d 1322, 1326.) This notice provides constructive notice that the claim affecting the real property is still pending and, therefore, any taker of a subsequently created interest in that property thus takes that interest subject to any judgment rendered in the pending action. (Id.) 

If a party abuses the use of a lis pendens, then a court may expunge the lis pendens. (Kirkeby v. Sup. Ct. (2004) 33 Cal.4th 642, 651.) After a claimant records a notice of pendency of action, any party to the action may move to expunge the lis pendens on any or all of three statutory grounds: (1) the complaint does not contain a real property claim; (2) the plaintiff cannot establish the probable validity of his or her real property claim; or (3) adequate relief may be secured to the plaintiff by the moving party's posting a bond. (Code Civ. Proc. §§ 405.30-405.33.)  

The allegations of the complaint determine whether a “real property claim” is involved; no independent evidence is required. (Urez Corp. v. Sup. Ct. (Keefer) (1987) 190 Cal.App.3d 114, 1149.) A real property claim is any cause of action which, if meritorious, would affect title to, or the right to possession of, specific real property; or 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.)

In determining whether a real property claim has been pled, the court must engage in a demurrer-like analysis. (Kirkeby v. Superior Court (2004) 33 Cal.4th 642, 647.) Rather than analyzing whether the pleading states any claim at all, as on a general demurrer, the court must undertake the more limited analysis of whether the pleading states a real property claim. (Ibid.) Review involves only a review of the adequacy of the pleading and normally should not involve evidence from either side, other than possibly that which may be judicially noticed as on a demurrer. (Ibid.)

        When a motion to expunge a lis pendens is filed, the burden is on the opposing party to show that the complaint contains allegations of a real-property claim, and to evidence the probable validity of the claim based upon a preponderance of evidence. (Code Civ. Proc., §§ 405.32, 405.30; Kirkeby, 33 Cal. 4th at p. 648.)

2.           Attorney’s Fees

The determination of reasonable amount of attorney fees is within the sound discretion of trial courts. PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095; Akins v. Enterprise Rent-A-Car Co. (2000) 79 Cal. App. 4th 1127, 1134. “In determining what constitutes a reasonable attorney fee when a contract or statute provides for such an award, courts should consider the nature of the litigation, its difficulty, the amount involved, and the skill required and success of the attorney's efforts, his or her learning, age and experience in the particular type of work demanded, the intricacies and importance of the litigation, the labor and necessity for skilled legal training and ability in trying the cause, and the time consumed.” Contractors Labor Pool, Inc. v. Westway Contractors, Inc. (1997) 53 Cal.App.4th 152, 168.

“Except as provided by statute or agreement, each party to a lawsuit must ordinarily pay their own attorney’s fees.” (Glaviano v. Sacramento City Unified School Dist. (2018) 22 Cal.App.5th 744, 750.) During statutory fee-shifting cases, when the prevailing party is statutorily authorized to recover their attorney’s fees from the losing party, the lodestar method is the primary method for establishing the recoverable fee amount. (Id.) The basic fee for comparable legal services in a community is called the lodestar; adjustment of this figure by the Court is based on factors including issue novelty/ difficulty, skill in legal presentation, the extent to which litigation precludes other attorney employment, and the contingent nature of the fee award. (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132.)

“Under the lodestar adjustment methodology, the trial court must initially determine the actual time expended and then “ascertain whether under all the circumstances of the case the amount of actual time expended, and the monetary charge being made for the time expended are reasonable.”” (Id.) “The reasonable hourly rate is that prevailing for private attorneys in the community conducting non-contingent litigation of the same type.” (Glaviano, 22 Cal.App.5th at 751.) “The “‘experienced trial judge is the best judge of the value of professional services rendered in his court, and while his judgment is of course subject to review, it will not be disturbed unless the appellate court is convinced that it is clearly wrong.’”” (Id.) Once a party establishes that they are entitled to attorney’s fees the lodestar is the presumed analytical starting point to determine the appropriate amount. (K.I. v. Wagner (2014) 225 Cal.App.4th 1412, 1425.

B.          Discussion

1.           Expunge Lis Pendens

The Court finds that there is no real property claim in Plaintiff’s First Amended Complaint (“FAC”). Plaintiff’s FAC addresses fiduciary duty concerns, necessary disclosures in reference to real estate sales, and other contract and tort claims, but none of Plaintiff’s causes of action state a real property claim. Were Plaintiffs successful, it is not clear that title to or right to possession of any specific real property would be directly affected.

As stated above, when a motion to expunge a lis pendens is filed, the burden is on the opposing party to show that the complaint contains allegations of a real-property claim, and to evidence the probable validity of the claim based upon a preponderance of evidence. (Code Civ. Proc., §§ 405.32, 405.30; Kirkeby, 33 Cal. 4th at p. 648.)

Plaintiff NIVO has woefully failed to meet its burden. The Court GRANTS the motion to expunge the lis pendens.

2.           Attorney’s Fees

Defendants’ counsel “incurred over 14 hours” of work on this motion at a rate of $375.00 per hour and requests a total of $8,250.00 in attorney's fees.  (Sahae Declaration, ¶ 12; Motion, p. 2:9-11; MPA, p. 14:5-7.)

At the original hearing, the Court’s tentative decision was to award defendant $3,750.00 in sanctions.   However, since that time, Defendants’ counsel has had to analyze Plaintiff’s opposition, prepare a reply brief, and appear for a second hearing.

The Court GRANTS attorney's fees to defense counsel in the amount of $5,625.00 (15 hours at $375/hour.)  Sanctions to be paid within 30 days.

IV.       CONCLUSION

Defendants Lin Dee Liu, Ami Kimoto, and Weimin Liu’s Motion to Expunge Lis Pendens is GRANTED. Defendants’ request for attorney’s fees is GRANTED in part in the amount of $5,625.00 against Plaintiff NIVO.