Case Number: BC515684    Hearing Date: August 11, 2014    Dept: 34

Moving Party: Defendant Frank McHugh (“defendant” or “McHugh”)

Resp. Party: Plaintiff Adam L. Greenfield (“plaintiff”)

Defendants’ Motion to Expunge the Lis Pendens is GRANTED.

PRELIMINARY COMMENTS:

The court is concerned about the lack of professionalism by both counsel in the preparation of their briefs.

Defendant’s motion is almost devoid of evidence to allow the court to expunge the lis pendens. Defendant is only saved because plaintiff admits the he failed to follow the procedural requirements of CCP § 405.22.

Much of defendant’s “factual background” in his motion concerns plaintiff’s alleged failure to serve him. Defendant’s motion was filed on July 24, 2014. Five days later, on 7/29/14, plaintiff filed a proof of service of the summons and complaint on defendant. According to the proof of service, service was effected by personal service on June 26 2014 – i.e., more than one month before defendant’s motion. Disregarding the competing factual contentions as to whether or not service was effected, the Court notes that the instant motion is a motion to expunge lis pendens only; defendant has not filed a motion to quash service under Code of Civil Procedure section 418.10.

Plaintiff states in his opposition that he will be filing a new notice of lis pendens in accordance with CCP §405.22, but inexplicably, he did not do so prior to filing his opposition, and in fact, as of the writing of this tentative decision on August 6, 2014, still has not done so.

Defendants’ reply brief is untimely. Pursuant to the Court’s order of July 24, 2014, the reply brief was due on July 31, 2014. It was filed on August 4, 2014.

Finally, Defendant has failed to comply with Cal. Rules of Court, rule 3.1110(f).

BACKGROUND:

Plaintiff commenced this action on 7/19/13 against defendants for: (1) fraud; (2) quiet title; (3) unfair business practices; and (4) dissolution of partnership and accounting.

In 2003 plaintiff entered into an agreement with McHugh to engage in the business of purchase real properties at tax lien sales. (Compl., ¶ 8.) Plaintiff performed under the agreement after McHugh falsely represented that if plaintiff took certain responsibilities with respect to the purchases, he would be compensated with a 5% ownership of the property or an amount equal to 5% of the actual value of the property. (Id., ¶¶ 8-10.) Between 2003 and 2010, a number of properties were acquired, some in the name of McHugh and some in plaintiff’s name. (Id., ¶ 11.)

In 1999, McHugh assisted plaintiff in a transaction to retain ownership of a parcel located on Atlantic Blvd in Maywood. (Compl., ¶ 12.) McHugh made overdue mortgage payments and the property was transferred to McHugh’s name, although the mortgage remained in plaintiff’s name. (Id., ¶ 14.) In 2007, the property was transferred back to plaintiff, with the first deed of trust intact and a second deed of trust in favor of McHugh for $867,000.00. (Id., ¶ 15.) Plaintiff executed a note secured a deed of trust on 21 properties to secure loans of $1.2. million for improvements on the Atlantic Blvd property. (Ibid.) These loans were never funded and plaintiff had to use his own resources to improve the property. (Id., ¶ 16.)

On September 2009, defendants foreclosed on the notes for the $867,000.00 and the $1.2 million. (Compl., ¶ 17.) Defendants falsely claimed that plaintiff owed $161,856.68. (Ibid.) In January 2010 plaintiff filed for bankruptcy protection and, while the matter was pending, the Atlantic Blvd property was refinanced and escrow opened. (Compl., ¶ 19.) The bankruptcy court authorized the dismissal of the petition in April 2010. (Ibid.) Before the dismissal, the parties orally agreed to postpone the trustee’s sale from April to May 2010. (Ibid.) Despite this, defendants conducted the sale the day after the dismissal of bankruptcy, on 4/16/10. (Ibid.)

Plaintiff has not filed a notice of lis pendens in this action.

ANALYSIS:

Defendant argues that the lis pendens is procedurally defective.

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.

(Code Civ. Proc., § 405.22.) “Any notice of pendency of action shall be void and invalid as to any adverse party or owner of record unless the requirements of Section 405.22 are met for that party or owner and a proof of service in the form and content specified in Section 1013a has been recorded with the notice of pendency of action.” (Code Civ. Proc., § 405.23.)

No notice of lis pendens has been filed with the Court as of August 5, 2014. There is no evidence which shows that a copy of the notice was properly mailed to defendant before the notice was recorded, as is required by section 405.22. Defendant fails to provide admissible evidence which shows that he was not served with the notice prior to its recordation; defense counsel’s hearsay declaration that defendant did not receive notice of the lis pendens is inadmissible. (See Plaza Decl., ¶ 4.) The purported copy of the lis pendens included with defendant’s motion is also inadmissible because defendant makes no attempt to authenticate this exhibit, such as with a declaration attesting that it is a true and correct copy of the lis pendens. (See id., Exh. F.) Moreover, this exhibit includes a proof of service stating that notice was served on defendant by certified mail, return receipt requested, on 7/18/13 – before it was recorded on 8/14/13. (See ibid.) Despite defendant’s lack of evidence, plaintiff admits that the notice was not properly served on defendant. (See Opp., p. 1:22-23; Moest Decl., ¶ 6.) Plaintiff asserts that he will be preparing, serving, filing, and recording a new notice of lis pendens, though he does not indicate when this will happen. (See Moest Decl., ¶ 6.)

Because plaintiff concedes that the requirements of section 405.22 were not met for the subject notice of lis pendens, the notice is void and invalid as to defendant. The Court therefore grants defendant’s motion. (See McKnight v. Superior Court (1985) 170 Cal.App.3d 291, 303 [violation of the service requirements for a notice of lis pendens is sufficient ground to expunge].) To the extent that plaintiff wishes to re-record the lis pendens after expungement, he must first obtain leave of this Court. (See Weil & Brown, Civ. Proc. Before Trial (The Rutter Group 2014) ¶ 9:456 [citing Code Civ. Proc., § 405.36; Ward v. Superior Court (1997) 55 Cal.App.4th 60, 66].)

Defendant seeks attorney’s fees for the instant motion. Parties prevailing on motions to expunge a lis pendens are entitled to recover reasonable attorney fees associated with making or opposing the motion, unless the court finds the other parties acted with substantial justification, or other circumstances of injustice. (Code Civ. Proc., §405.38; Castro v. Sup. Ct. (2004) 116 Cal.App.4th 1010, 1018.) Defendant seeks fees of $5,775.00, which reflects 16.5 hours spent preparing the motion at an hourly rate of $350, plus costs of $60.00 and mileage and parking costs of $80.00. (See Plaza Decl.) This amount is excessive and unreasonable. Defendant provides no authority which allows him to recover costs for mileage and parking. The only ground for granting the instant motion is the procedural defects in the service of the notice. It should have taken defense counsel no more than one hour to prepare the argument on this ground; especially since counsel apparently failed to expend the necessary time to obtain admissible evidence in support of such. The instant motion might well have been denied if not for plaintiff’s admission in the opposition that the notice was inadequate.

“‘If . . . the Court were required to award a reasonable fee when an outrageously unreasonable one has been asked for, claimants would be encouraged to make unreasonable demands, knowing that the only unfavorable consequence of such misconduct would be reduction of their fee to what they should have asked in the first place. To discourage such greed, a severer reaction is needful . . . .’ (Serrano v. Unruh (1982) 32 Cal.3d 621, 635, quoting Brown v. Stackler (7th Cir. 1980) 612 F.2d 1057, 1059.) “A fee request that appears unreasonably inflated is a special circumstance permitting the trial court to reduce the award or deny one altogether.” (Chavez v. City of Los Angeles (2010) 47 Cal.4th 970, 990; Ketchum v. Moses (2001) 24 Cal.4th 1122, 1137; Serrano v. Unruh (1982) 32 Cal.3d 621, 635.)

Defendant’s motion to expunge the lis pendens is GRANTED. The Court declines to award sanctions.