Case Name: Trang Nguyen et al vs Giang Pham et al
Case No.: 16CV294253

This is an action for breach of an agreement to sell property, to set aside a fraudulent transfer and for quiet title. According to the allegations of the first amended complaint (“FAC”), on September 17, 2010, plaintiffs Tran Huyen Thi Nguyen and Thao Thi Nguyen (collectively, “Plaintiffs”) entered into a contract with defendants Giang To Pham and Victoria Buu Pham (collectively, “the Phams”) to purchase a house at 4172 West Rincon Avenue in Campbell for $700,000. (See FAC, ¶¶ 7-10.) Plaintiffs paid the Phams $240,000, and agreed to assume the responsibility for making the mortgage payments to pay off the balance of the mortgage of $460,000 within five years. (See FAC, ¶¶ 11-5.) On September 17, 2010, Plaintiffs moved into the subject property pursuant to the terms of the contract. (See FAC, ¶ 16.) Despite the fact that Plaintiffs continued to make payments pursuant to the contract, on May 26, 2015, the Phams transferred the subject property to their friend defendant Angie Elconin (“Elconin”) without knowledge, consent or approval by Plaintiffs. (See FAC, ¶ 26.) Plaintiffs claimed that were ready, willing and able to pay off the remainder of the balance—and had actually on multiple occasions had offered to make payments, but the Phams refused to accept those payments. (See FAC, ¶ 34.) On January 3, 2017, Plaintiffs filed the FAC, asserting the following causes of action against defendant Elconin for:

7) Civil conspiracy (against all defendants);
8) Constructive trust (against all defendants); and,
9) Quiet title (against all defendants.

Defendant Elconin has filed a motion to expunge a lis pendens recorded by the Plaintiffs. Admittedly, the opposition to the motion was not timely filed or served. It is within the Court’s discretion as to whether to consider any late filed opposition. As the moving party was able to file a reply, the Court finds no prejudice, and will consider the opposition. However, Plaintiffs are advised that the Court may choose not to consider late filed opposition in the future.

A lis pendens is properly expunged without a bond if the court finds either: that Plaintiffs’ complaint does not contain a “real property claim” (i.e., one affecting title or possession of specific real property or use of an easement, etc.; CCP § 405.4; CCP § 405.31); or, the claimant “has not established by a preponderance of the evidence the probable validity of the real property claim.” (CCP § 405.32; BGJ Associates LLC v. Superior Court (1999) 75 Cal.App.4th 952, 972.)

The burden of proof on is on the lis pendens claimant: unlike most other motions, the burden of proof is on the party opposing the motion to expunge. The lis pendens claimants (Plaintiffs hear) bear the burden of establishing the existence of a “real property claim” and that it is “probably valid.” (CCP § 405.32.) Plaintiffs thus have the burden of producing sufficient evidence to support a finding that plaintiffs will “probably” win at trial. Defendant Elconin was not required in the notice of motion to argue that Plaintiffs had not met their burden, as that would be required of Plaintiffs in their opposition. Elconin correctly argued that the burden of proof is on the claimant (Plaintiffs) and that the court should evaluate the relative merits of the parties’ factual and legal presentations, and conclude whether the real property claim has probable validity.

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 1141, 1149.) A “real property claim” is any cause of action which, if meritorious, would affect the title to, or the right to possession of, specific real property.

The first analysis, whether the complaint contains a real property claim, is accomplished by reviewing the complaint in similar fashion to a demurrer. It is not enough that the action merely relates to real property. A quiet title claim, by its nature, is an action that would affect title to, or the right to possession of, specific real property.

The Court will turn to whether Plaintiffs have met their burden to establish that any alleged real property claim has probable validity. Plaintiffs submitted no evidence to support their argument that they are entitled to quiet title against Elconin, who holds record title to the property in question. Instead, Plaintiffs have relied entirely on an order of the Court denying Elconin’s motion for summary judgment, claiming first that this order is “collateral estoppel” and binds Elconin, and secondly that the Court made factual findings in the order that support Plaintiffs’ claims.

For an order to have collateral estoppel effect, as quoted by Plaintiffs in their opposition papers, there must have been a final adjudication in a prior action. Collateral estoppel requires: “First, the issue sought to be precluded from relitigation must be identical to that decided in a former proceeding. Second, this issue must have been actually litigated in the former proceeding. Third, it must have been necessarily decided in the former proceeding. Fourth, the decision in the former proceeding must be final and on the merits. Finally, the party against whom preclusion is sought must be the same as, or in privity with, the party to the former proceeding.” (Lucido v. Superior Court (People) (1990) 51 Cal.3d 335, 341.)

None of these criteria are met, most importantly that a decision in a “former proceeding” must be final and on the merits. There has been no prior action in which a final judgment is final.

Plaintiffs mistakenly argue that the Court made specific factual findings in the order denying summary judgement, and apparently do not understand the purpose and effect of a summary judgment motion. The Court made no affirmative factual findings, but instead pointed out areas where the evidence was sufficiently in conflict as to raise a triable issue of fact.
The issues and standards on a summary judgment motion are not “identical” to those on a motion to expunge a lis pendens. As noted, the Court’s role on a summary judgment motion is limited to identifying triable issues of fact. On a motion to expunge a lis pendens, the Plaintiffs are required to submit sufficient evidence to prove probable validity. The summary judgment order has no preclusive effect.

“Probable validity” means “it is more likely than not that the (plaintiffs) will obtain a judgment against the defendant on the claim,” namely that the claim seeking title to real property has probable validity. (CCP § 405.3.) To avoid a motion to expunge under CCP § 405.32, the burden is on the lis pendens claimant (plaintiff) to establish the “probable validity” of the real property claim “by a preponderance of the evidence.” (CCP § 405.32) If conflicting evidence is presented, the judge must weigh the evidence in deciding whether plaintiff has sustained its burden.
After considering the evidence presented by Elconin, and the lack of any evidence submitted by Plaintiffs, the Court finds that Plaintiffs have not met their burden to show that their claims against Elconin and the real property have probable validity. Elconin presented affirmative evidence that she did not know and had no reason to know that the Phams had allegedly entered into a contract to sell the property before she purchased the property; that she did not know of any fraud and did not conspire with the Phams; and to support her claim that she is a bona fide purchaser, particularly in light of the evidence of a rental contract for the property.

Expungement of an improper lis pendens is mandatory, not discretionary. Thus, if the court finds the underlying claim is not a “real property claim” or that its “probable validity” has not been established “by a preponderance of the evidence,” it must order the lis pendens expunged. (CCP §§ 405.31, 405.32.)

IT IS HEREBY ORDERED that the Lis Pendens described above be expunged. Defendant Elconin shall immediately submit a separate order appropriate for recording that only includes the order to expunge Lis Pendens without legal analysis.

Pursuant to Code of Civil Procedure section 405.35, this Order shall not become effective and shall not be recorded until 20 days after service of written notice of this Order signed by the Court, or upon the final adjudication of any petition for writ of mandate timely filed pursuant to Code of Civil Procedure section 405.39.

Plaintiffs’ request for attorney fees is DENIED. The Court will consider Elconin’s request for an award of attorney fees and costs by way of noticed motion pursuant to Code of Civil Procedure section 405.38.