Judge Upinder S. Kalra, Case Number: 24STCV20316, Date: 2025-04-14 Tentative Ruling

1. An Order expunging the Notice of Pendency of Action recorded as Document No. 20240546125 on August 14, 2024 concerning the real property described as APN: 4363-018-033, 10916-10928 Le Conte Avenue, Los Angeles, California 90024; and

2. An Order awarding attorneys’ fees and costs in the sum of at least $10,000.00.[1]

On August 12, 2024, Plaintiff BSH Investments, LLC (Plaintiff) filed a Verified Complaint against Defendants FYJA, LLC (FYJA), Le Conte Westwood Development (Le Conte), Evanston Road, LLC (Evanston), Donald Rezak (Rezak), and Freedom REIT (REIT) (Defendants) with seven causes of action for: (1) Breach of Contract (Specific Performance); (2) Intentional Misrepresentation; (3) Negligent Misrepresentation; (4) Concealment; (5) Quiet Title; (6) Declaratory Relief; and (7) Injunctive Relief.

According to the Complaint, the parties entered into three purchase and sale agreements (“PSAs”) for real property located at 10916-10928 Le Conte Avenue, Los Angeles, California 90024 (“Property”). Plaintiff sought to acquire the Property to develop, manage and operate it as affordable housing. The Property is located in close proximity to UCLA, potentially providing affordable housing options for UCLA employees, students, and others, who may not otherwise be able to afford to live close to the campus. Among other things, Plaintiff alleges that Defendants materially breached the PSAs by trying to prematurely close escrow and did not clear title.

On February 10, 2025, Defendants FYJA, Evanston, and Rezak filed a demurrer to the Verified Complaint.

On February 25, 2025, Defendants FYJA, LLC and Evanston Road LLC (Defendants) filed the instant motion to expunge lis pendens and for attorneys’ fees.

On March 10, 2025, the parties stipulated to continue the hearing on the motion to expunge lis pendens. The court continued the hearing to April 15, 2025 with opposition and reply briefing deadlines corresponding to the new hearing date.

On April 4, 2025, Plaintiff filed a First Amended and Supplemental Complaint (FAC) with two causes of action for: (1) Breach of Contract (Specific Performance); and (2) Concealment.

“A lis pendens is a recorded document giving constructive notice that an action has been filed affecting title or right to possession of the real property described in the notice. Its effect is that anyone acquiring an interest in the property after the action was filed will be bound by the judgment.” (BGJ Associates, LLC v. Superior Court (1999) 75 Cal.App.4th 952, 967.)

In a motion to expunge a notice of lis pendens, the claimant who filed the lis pendens has the burden of proof. (Code Civ. Proc., §405.30.) Thus, that claimant, in opposing the motion to expunge the lis pendens, must demonstrate the following: (1) the action affects title to or right of possession of the real property described in the notice; (2) insofar as the said notice is concerned, the party recording the notice has commenced the action for a proper purpose and in good faith; and (3) the probable validity of the real property claim by a preponderance of the evidence. (Hunting World, Inc. v. Superior Court (1994) 22 Cal.App.4th 67, 70; see also Code Civ. Proc., § 405.32.) A claim has “probable validity” where it is more likely than not that the plaintiff will obtain a judgment against the defendant on that claim. (Code Civ. Proc., § 481.190.)

This court is unaware of any legal authority which requires a court to rule on evidentiary objections on a motion, except as to a motion for summary motion/adjudication [Cal. Code Civ. Proc. (CCP) §¿437c (q)] or a special motion to strike [CCP § 425.16 (b)(2); see also, Sweetwater Union High School Dist. v. Gilbane Building Co. (2019) 6 Cal.5th 931, 947-949.]¿¿As such, this Court respectfully declines to rule on any of these objections.¿ This court is well aware of the rules of evidence, and to how much weight, if any, should be given to any of the proposed evidence.

Defendants contend there is no real property claim because Plaintiff did not timely perform under the Purchase Sale Agreements (PSAs). Plaintiff argues their specific performance claim is a classic real property claim. Defendants raise the same, or similar, arguments on reply.[2]

“‘Real property claim’ means the cause or causes of action in a pleading which would, if meritorious, affect (a) title to, or the right to possession of, specific real property . . . .”¿ (Code Civ. Proc., § 405.4.)¿ The Court undertakes a limited "demurrer-like" analysis of whether the pleading states a real property claim, defined by CCP § 405.4 as causes of action which would, if meritorious, affect title to, or the right to possession of, specific real property. (CCP § 405.4; See Kirkeby v. Superior Court (2004) 33 Cal.4th 642, 647.)

Here, Plaintiff’s specific performance claim is a real property claim. Critically, Plaintiffs seek specific performance of a real property purchase agreement. (FAC ¶¶ 2-3.)

Defendants contend that the court should expunge the lis pendens because Plaintiff has no basis for seeking specific performance because they did not perform their purchase obligations by the October 28, 2024 closing date.[3] Plaintiff argues that Defendants breached the PSAs by surreptitiously recording on title a third deed of trust in April 2024 of nearly $30 million which far exceeded the purchase price and prevented a full reconveyance of the deeds of trust in order to close. Plaintiff further argues that Defendants breached because they failed to deliver clear title at closing.[4] Defendants reply that they had no obligation to pay off existing liens before Plaintiff funded the purchase price to be used to pay off those liens. Defendants further reply that they did provide adequate assurances on October 10, 2024 and Plaintiff’s performance was not excused.

The court shall order that a notice of lis pendens be expunged if the claimant has not established by a preponderance of the evidence the probable validity of the real property claim. (Code Civ. Proc., § 405.32.) “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.) Thus, when presented with a pretrial motion to expunge a lis pendens, the court must grant the motion unless the claimant establishes by a preponderance of the evidence the probable validity of the real property claim.” (De Martini v. Superior Court (2024) 98 Cal.App.5th 1269, 1279, quotation marks omitted.)

“A plaintiff must also show that it was ready, willing and able to perform both at the time the original contract was entered into and during the specific performance action.” (Ninety Nine Investments v. Overseas Courier Service (Singapore) Private (2003) 113 Cal.App.4th 1118, 1126 (Nintety Nine).) “[I]f a party to a contract expressly or by implication repudiates the contract before the time for his or her performance has arrived, an anticipatory breach is said to have occurred.” (Mammoth Lakes Land Acquisition, LLC v. Town of Mammoth Lakes (2010) 191 Cal.App.4th 435, 467, quoting Romano v. Rockwell Internat., Inc. (1996) 14 Cal.4th 479, 489.)

Here, Plaintiff’s claim does not have probable validity. Critically, it is undisputed that Plaintiff did not perform by the October 28, 2024 closing date despite receiving assurances from Defendants that they could and would perform.[5] (Beehler Decl., Exhibits H and I.) Indeed, Defendants asked for assurances that Plaintiff would perform. (Beehler Decl., Exhibit I.) Plaintiff did not provide evidence that it responded to Defendants. “Buyer’s and Seller’s failure to perform their respective obligations hereunder, including, without limitation, the timely delivery by Buyer of the Purchase Price, shall constitute a material and non-curable default under this Agreement.” (PSA 3.2; see also PSA 4.4.1.) This requirement is therefore unmet.

Defendants contend that they are entitled to attorneys’ fees for bringing this motion. Plaintiff argues they are entitled to attorneys’ fees for opposing the motion. Defendants clarify the amount sought on reply.

“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.” (CCP § 405.38.)

Here, Defendants are entitled to attorneys’ fees for successfully bringing this motion. First, Plaintiff did not argue that awarding the fees would be unjust or that they acted with substantial justification. Next, Defendants seek $16,875.00 in attorneys’ fees representing 20 hours of attorney time at $675 per hour plus an anticipated additional five hours preparing for the hearing. (Hurwitz Decl. ¶ 2.) After reviewing the briefings for this motion, the court agrees that these fees are reasonable, in part. The court will grant 21 hours of fees for a total of $14,175.

Accordingly, the court GRANTS Defendants’ request for attorneys’ fees for $14,175.

[1] On reply, Defendants clarify that they seek $16,875.00 in attorneys’ fees and costs.

[2] Indeed, the court notes this issue is not really the contested issue of this motion.

[3] Defendants include other arguments for causes of action that are not part of the FAC. The court therefore disregards them.

[4] Plaintiff argues that it asked for adequate assurances of performance upon learning of the $30 million debt and that it did not receive such from Defendants.

[5] The court declines to address other arguments as this one is dispositive.