Case Number: BC541798    Hearing Date: July 17, 2014    Dept: 56

Case Name: Trinity Partners, LLC v. 1840 Highland Partners, LLC
Case No.: BC541798
Motion: Motion to Expunge Lis Pendens
Moving Party: Defendant 1840 Highland Partners
Responding Party: Plaintiff Trinity Partners

Tentative Ruling: Motion to expunge lis pendens is granted.

Plaintiff Trinity Partners LLC filed this action against Defendant 1840 Highland Partners LLC, concerning the purchase of real property in Hollywood. Plaintiff asserts causes of action for specific performance and breach of contract. Plaintiff recorded a lis pendens after the lawsuit was filed, and Defendant now moves to expunge the lis pendens.

Objections –
Defendant objects to Plaintiff’s opposition on the ground that it was served by mail on 6/17/14 in violation of CCP §1005(c). The objection is overruled; Defendant filed a timely reply and there is no prejudice.

Defendant objects to the declarations of Mehdi Bolour (Nos. 1-8) and David Bolour (Nos. 9-16); Nos. 1 and 9 are sustained, and the remainder are overruled.

Motion to Expunge Lis Pendens –
The court shall expunge a lis pendens if 1) it finds that the pleading on which the notice is based does not contain a real property claim (CCP §405.31), or 2) it finds that the claimant has not established the probable validity of the claim (CCP §405.32).

Defendant has based its motion on the second ground under §405.32. This involves an evaluation of the evidence as to whether the plaintiff has established the “probable validity” of the claim. “Probable validity” means it is “more likely than not that the claimant will obtain a judgment against the defendant on the claim.” CCP §405.3. This definition is drawn from the attachment laws, and it directs to the court to weigh the evidence and conduct a hearing or “mini-trial” on the factual merits of the plaintiff’s claim. CCP §405.32, official comments; 3 Witkin, Cal.Proc. (5th ed), Actions §403. The plaintiff has the burden of proof in establishing the probable validity of the claim. CCP §405.30.

In the complaint, Plaintiff alleges that it submitted a written offer to purchase property owned by Defendant on 3/21/14 (¶5); Defendant responded to the offer with a revised counter offer on 3/25/14 (¶7); and Plaintiff accepted the revised counter offer on or before 4/2/14 (¶ 8). Plaintiff therefore alleges that an enforceable purchase contract was created upon its acceptance of the revised counter offer (¶9).

Defendant has presented evidence of an additional transaction between Defendant’s submission of the revised counter offer on 3/25/14 and Plaintiff’s purported acceptance of the revised counter offer on 4/2/14: On 4/1/14 Plaintiff returned the revised counter offer with handwritten interlineations which changed the terms (concerning the amount of the initial deposit and the amount and terms of financing), and Defendant rejected the proposed modifications (Souroudi Decl. ¶ 6, Ex. 3). It was only after Plaintiff learned of this rejection that Plaintiff executed the original version of the revised counter offer without interlineations and returned it to Defendant on 4/2/14 (id. ¶ 7, Ex. 4).

It is well settled that “An acceptance, to result in the formation of a binding contract, must meet exactly, precisely, and unequivocally the terms proposed in the offer.” American Aero. Corp. v. Grand Central Aircraft (1957) 155 Cal.App.2d 69, 79; Civ. Code §1585. When a party responds to an offer or counter offer with modifications or qualifications in an acceptance, “A qualified acceptance amounts to a new proposal or counteroffer putting an end to the original offer.” Apablasa v. Merrit (1959) 176 Cal.App.2d 719, 726.

Accordingly, by responding to the revised counter offer on 4/1/14 with interlineations that changed the terms, Plaintiff rejected and terminated the revised counter offer; Plaintiff’s subsequent acceptance on 4/2/14 was ineffective. See Landberg v. Landberg (1972) 24 Cal.App.3d 742, 757.

Plaintiff submits that the handwritten interlineations were only part of the negotiations, intended to feel out Defendant’s position on certain aspects of the transaction. This argument is contrary to the evidence and is not credible. Plaintiff’s new terms were not raised in a conversation or email; they were contained in Plaintiff’s written response to the revised counter offer, which clearly states “THIS IS INTENDED TO BE A LEGALLY BINDING AGREEMENT.” Plaintiff’s subjective intentions are irrelevant because “Contract formation is governed by objective manifestations, not subjective intent.” Roth v. Malson (1998) 67 Cal.App.4th 552, 557.

Plaintiff has not established by a preponderance of evidence the probable validity of its real property claim. The motion is granted and the lis pendens shall be expunged.

Defendant seeks attorney fees and costs pursuant to CCP §405.38. As the prevailing party, it is entitled to an award. Defendant submits proof that it has incurred attorney fees and costs in the amount of $3,210. This is reasonable, and will be awarded.

Counsel should submit an order at the hearing.