Di Martini v. Superior Court ( 2024 )

Filed 1/22/24
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION THREE
LORING DE MARTINI,
Petitioner,
v. A168529
THE SUPERIOR COURT OF SAN
MATEO COUNTY, (San Mateo County Super. Ct.
Respondent; No. 22-CIV-02582)
PUJA GUPTA,
Real Party in
Interest.
In 2020, Loring De Martini agreed to sell Puja Gupta a commercial
property; when a dispute arose, they engaged in arbitration. Gupta filed a
petition to confirm a subsequent arbitration award and recorded a lis
pendens — “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.” (Urez Corp. v. Superior Court (1987) 190 Cal.App.3d
1141, 1144.) Gupta obtained a judgment confirming the arbitration award,
but she abandoned the case after De Martini successfully moved to expunge
the lis pendens.
Gupta thereafter filed a new action seeking to compel De Martini to
complete the sale, and she recorded another lis pendens on the property.
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De Martini moved to expunge the new lis pendens, arguing, among other
things, that Code of Civil Procedure section 405.36 (undesignated statutory
references are to this code) required Gupta to seek leave of the trial court
before its recording because it affected the same property and was recorded
by the same claimant. In addition, De Martini argued Gupta did not
establish by a preponderance of the evidence the probable validity of any real
property claim. The trial court denied the motion, concluding section 405.36
only applies to successive lis pendens filed in the same action, and Gupta
established a prima facie case regarding the probable validity of a real
property claim.
De Martini filed a petition for a writ of mandate, which is the exclusive
means for challenging an order denying expungement. (§ 405.39; J & A
Mash & Barrel, LLC v. Superior Court (2022) 74 Cal.App.5th 1, 16 (J & A).)
We issued an order to show cause because De Martini had no other adequate
appellate remedy. (Powers v. City of Richmond (1995) 10 Cal.4th 85, 114.)
We now grant the petition for a writ of mandate because the trial court erred
in both determinations.
BACKGROUND
In January 2020, De Martini and Gupta entered a $6 million all-cash
commercial purchase/sale agreement for property — site of The Van’s
Restaurant — in Belmont (City). Within months of entering the agreement,
De Martini disputed the timing of Gupta’s obligation to pay an additional
$850,000 deposit. The parties engaged in arbitration, and the arbitrator
determined the obligation to pay the additional deposit was contingent upon
a final determination that The Van’s Restaurant is not historical and can be
demolished.
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Gupta filed a petition to confirm the arbitration award (Gupta I) and
recorded a 2021 lis pendens on the property. De Martini responded to the
petition and filed a cross-petition to vacate the award. The trial court denied
the cross-petition and granted the petition to confirm the award. The court
signed a judgment, stating De Martini “must cooperate in facilitating” the
historical review, and such cooperation “includes, but is not limited to
providing relevant documentation, records and/or signatures required by the
City.” Moreover, after “final determination of the historical issue by the City,
Petitioner and Respondent are to move, promptly, to complete this
transaction.”
Gupta moved to enforce the judgment. In November 2021, De Martini
moved to expunge the lis pendens as void and invalid. Relevant here, the
trial court denied Gupta’s motion to enforce the judgment because notice of
entry of the judgment had not been filed and served. The court also granted
De Martini’s motion to expunge the lis pendens because the civil proceeding
was solely a petition to confirm the arbitration award — there was no real
property claim and no cause of action to quiet title.
After abandoning the litigation in Gupta I, Gupta filed another
complaint against De Martini (Gupta II) in which she requested an order
requiring De Martini to execute the development application documents to
allow the City to complete its historical review process. She also requested
an order requiring De Martini to complete the terms of the sale under the
original purchase agreement. She recorded another lis pendens on the same
property, noting her action for specific performance affects real property. De
Martini moved to expunge the latest lis pendens.
The trial court denied De Martini’s expungement request. It explained
the complaint stated a real property claim since the agreement at issue was a
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contract for the purchase of property, which necessarily includes transfer of
title. In addition, the court found Gupta had established a prima facie case
that her claim had probable validity. Finally, the court concluded section
405.36 did not require Gupta to seek leave of the court before recording and
filing a lis pendens, even though the previous lis pendens was expunged in a
prior, related lawsuit. Rather, court authorization to file a second lis pendens
is only required if the first, expunged lis pendens was recorded in the same
action. The court awarded Gupta attorney fees.
De Martini filed a petition for writ of mandate and a stay of the order
awarding attorney fees. We issued a stay and an order to show cause.
DISCUSSION
De Martini makes a series of arguments why we should vacate the trial
court’s order denying his motion to expunge the lis pendens. We address
each in turn.
A writ of mandate lies “to compel the performance of an act which the
law specially enjoins, as a duty resulting from an office, trust, or station.”
(§ 1085, subd. (a).) The writ must issue in cases where there is no plain,
speedy, and adequate remedy in the ordinary course of law. (§ 1086.) We
review the trial court’s findings of fact for substantial evidence, but
independently review legal issues, such as those involving statutory
interpretation. (J & A, supra, 74 Cal.App.5th at p. 17.)
A party in an action asserting a real property claim may record a lis
pendens. (§ 405.20; J & A, supra, 74 Cal.App.5th at p. 15.) It notifies
“prospective purchasers, encumbrancers and transferees that there is
litigation pending that affects the property.” (Amalgamated Bank v. Superior
Court (2007) 149 Cal.App.4th 1003, 1011.) It “acts as a cloud against the
property, effectively preventing sale or encumbrance until the litigation is
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resolved or the [notice] is expunged.” (Ibid.) Once a party records a lis
pendens, any party with an interest in the property may move to expunge
the notice under section 405.30. (J & A, at p. 16.) Section 405.30 is intended
to prevent an unwarranted clouding of a party’s title with an inappropriate
or void notice of pending action. (McKnight v. Superior Court (1985)
170 Cal.App.3d 291, 303.) Relevant here, a lis pendens may be expunged if
the action does not contain a real property claim or the claimant fails to
establish the probable validity of the real property claim. (§§ 405.31, 405.32;
J & A, at p. 16.)
I.
Relying on section 405.36, De Martini argues that, in cases in which a
claimant’s lis pendens in a prior, related proceeding has been expunged, the
same claimant must seek court permission before filing a lis pendens on the
same property in a subsequent proceeding. Because the trial court in Gupta I
already expunged a lis pendens on the property — and Gupta did not receive
court authorization prior to recording the second lis pendens on the same
property — the court was required to expunge the notice in Gupta II. We
agree.
When construing a statute, we determine the Legislature’s intent and
effectuate the law’s purpose by examining the statutory language, giving the
words their plain and ordinary meaning. (Los Angeles County Metropolitan
Transportation Authority v. Alameda Produce Market, LLC (2011) 52 Cal.4th
1100, 1106–1107.) If the statutory text is unambiguous, the plain meaning
controls. (Id. at p. 1107.) But if the language “supports more than one
reasonable construction,” “we may look to extrinsic aids,” such as the
legislative history. (Ibid.) The construction that most closely comports with
the Legislature’s apparent intent controls if it promotes rather than defeats
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the purpose of the statute and does not lead to absurd consequences. (Estate
of Griswold (2001) 25 Cal.4th 904, 910–911.)
Here, the plain language supports De Martini’s interpretation. Section
405.36 provides, “[o]nce a notice of pending action has been expunged, the
claimant may not record another notice of pending action as to the affected
property without leave of the court in which the action is pending.” The
statute identifies the circumstances under which a claimant — “a party to an
action who asserts a real property claim and records a notice of the pendency
of the action” — must seek leave before recording an additional lis pendens
on the same property. (§ 405.1.)
First, a claimant’s initial lis pendens on a property must have been
expunged. (§ 405.36.) The use of the indefinite article “a” before “notice of
pending action” signals a general reference to any and all notices, rather than
a particular notice. (Pineda v. Bank of America, N.A. (2010) 50 Cal.4th 1389,
1396–1397.) Second, the same claimant must desire to record a second lis
pendens on the same property — “the claimant may not record another notice
of pending action as to the affected property.” (§ 405.36.) The statute’s use of
the definite article “the” before “claimant” demonstrates the Legislature was
referring to a specific claimant. (Pineda, at p. 1397.) And by stating the
claimant may not record “another notice of pending action,” the statute
indicates the provision applies to claimants who recorded the prior, expunged
lis pendens, i.e., the same claimant. (§ 405.36.) Moreover, by referring to
“the” affected property, the statute indicates the Legislature was referring to
the specific property that was the subject of the prior, expunged lis pendens.
(Pineda, at p. 1396.) If both circumstances are present, the claimant must
seek leave of court in which “the action is pending” before filing another lis
pendens on the same property — even in a different action. (§ 405.36.)
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Gupta argues the trial court properly interpreted section 405.36 as
requiring court authorization to file a second lis pendens only if the first one
was recorded in the same action. But she fails to identify, and we cannot find,
language imposing the “same action” requirement. (California Teachers
Assn. v. Governing Bd. of Rialto Unified School Dist. (1997) 14 Cal.4th 627,
633 [the “ ‘court has no power to rewrite the statute so as to make it conform
to a presumed intention which is not expressed’ ”].) The “plain language of
section 405.36 leaves little doubt it applies here,” even though the prior lis
pendens was expunged in a different action. (Fid. Nat’l Title Co. v. United
States SBA (E.D.Cal., Nov. 13, 2015, No. 2:13-cv-02030-KJM-AC) 2015
U.S.Dist. Lexis 154076, *13; Farm Raised Salmon Cases (2008) 42 Cal.4th
1077, 1096, fn. 18 [unpublished federal opinions may be cited as persuasive
authority].)
Rebco Dev., Inc. v. Superior Court (1977) 67 Cal.App.3d 13 does not
alter this conclusion. That case predates section 405.36, which became
effective in 1993. (Stats. 1992, ch. 883.) Previously there was no statutory
requirement for leave of court to file another lis pendens when the first lis
pendens had been expunged. Moreover, the claimant in Rebco filed two lis
pendens in different cases and against different defendants. (Rebco, at p. 15.)
The court determined the issues in the first and second expungement
hearings were different, and the notices were filed in different actions
between two different parties. (Id. at pp. 17–18.) Thus, collateral estoppel
did not bar the second notice. (Id. at p. 17.)
Here, in addition to being governed by section 405.36, Gupta is the
plaintiff and De Martini is the defendant in both Gupta I and this case, and
the action concerns the same property. (Fid. Nat’l Title Co. v. United States
SBA, supra, 2015 U.S.Dist. Lexis 154076 at p. *13.) And although Gupta I
7
involved a petition to confirm an arbitration award, the judgment required
De Martini to cooperate in providing documentation and signatures to the
City and complete the property sale. In Gupta II, Gupta seeks an order
requiring De Martini to execute the development application documents and
complete the sale of the property — the “case is effectively the same case” as
Gupta I. (Fid. Nat’l, at p. * 14.) Once the previous notice was expunged in
Gupta I, Gupta “could not ‘record another notice of a pending action as to
[The Van’s Restaurant site] without leave’ ” of the trial court below, the only
court “ ‘in which the action is pending.’ ” (Fid. Nat’l, at p. * 13.) Allowing
Gupta “to record, at will, a second notice of lis pendens after the first had
been expunged would simply invite more of the abuse which the statute
was intended to cure.” (Ranchito Ownership Co. v. Superior Court (1982)
130 Cal.App.3d 764, 771.)
“Although we need not go further because the statutory language is
unambiguous,” we examine the legislative history which confirms our reading
of the language. (Becerra v. Superior Court (2020) 44 Cal.App.5th 897, 920.)
It “indicates a legislative intent to restrict rather than broaden the
application” of the lis pendens remedy. (Urez Corp. v. Superior Court, supra,190 Cal.App.3d at p. 1145.) The expungement statute, former section 409.1,
was added in 1968 “in an attempt to alleviate problems which had arisen
from the misuse of notices of lis pendens.” (Malcolm v. Superior Court (1981)
29 Cal.3d 518, 524 (Malcolm); Stats. 1968, ch. 815, § 1.) Then, as now,
recording a notice of pending action did not require prior court approval or
supervision and could cloud the title of real property. (Malcolm, at p. 524.)
“Because the recording of a lis pendens placed a cloud upon the title of real
property until the pending action was ultimately resolved, a time period
frequently encompassing several years, the lis pendens procedure was
8
susceptible to serious abuse, providing unscrupulous plaintiffs with a
powerful lever to force the settlement of groundless or malicious suits.”
(Ibid.)
Assembly Bill No. 3620 (Reg. Sess. 1991–1992) substantially revised
the lis pendens statutes. (Stats. 1992, ch. 883.) Among other things, it
repealed former section 409.1 and added section 405.36, specifically requiring
“leave of the court to rerecord a notice of pendency of action after such a
notice in the action has been previously expunged.” (Stats. 1992, ch. 883.)
The provision “disallowed rerecording of an expunged lis pendens without
consent of the court.” (Code Com., 14a West’s Ann. Code Civ. Proc. (2022 ed.)
foll. § 405.36, p. 256.) Rather, it “requires leave for re-recording of any
expunged lis pendens.” (Ibid, italics added.) In doing so, the Legislature
made clear claimants were required to obtain court leave before a second
notice of pending action could be filed following the expungement of a first
notice involving the same claimant and property. A contrary reading would
undermine the statute. It would “allow a plaintiff to sue, record a notice of
pending action, voluntarily dismiss the claim without prejudice, and
strategically burden their adversary with a new claim and new notice at
will” — the very abuse section 405.36 was intended to remedy. (Fid. Nat’l
Title Co. v. United States SBA, supra, 2015 U.S.Dist. Lexis 154076 at p. *14.)
In sum, the notice of pending action recorded in Gupta II must be expunged.
(Ibid.)
II.
De Martini next contends the notice of lis pendens must also be
expunged because Gupta’s complaint does not assert a real property claim.
This argument is meritless.
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Parties who assert a real property claim may record a lis pendens.
(§ 405.20.) A real property claim is “one that affects title or possession of the
subject property.” (Urez Corp. v. Superior Court, supra, 190 Cal.App.3d at
p. 1149; § 405.4.) The “court shall order the notice expunged if the court finds
that the pleading on which the notice is based does not contain a real
property claim.” (§ 405.31.) In making this determination, the court must
engage in a “ ‘demurrer-like analysis,’ ” asking whether the claimants have
pled facts entitling them to the remedy they seek. (Park 100 Investment
Group II, LLC v. Ryan (2009) 180 Cal.App.4th 795, 808; Campbell v. Superior
Court (2005) 132 Cal.App.4th 904, 922.)
Here, Gupta alleged De Martini refused to execute the development
application documents, thus preventing transfer of the real property
pursuant to their commercial purchase/sale agreement. Her complaint seeks
an order requiring De Martini to complete the terms of sale under the
purchase agreement. It explicitly seeks specific performance of a contract to
purchase the property — a real property claim. (Hilberg v. Superior Court
(1989) 215 Cal.App.3d 539, 542.) None of De Martini’s arguments persuade
us otherwise.
III.
Finally, De Martini contends the trial court erred by applying a prima
facie standard for determining whether Gupta established the probable
validity of her real property claim. We agree.
The trial court must order a lis pendens be expunged if the claimant
fails to establish by a preponderance of the evidence the probable validity of
the real property claim. (§ 405.32.) Unlike other motions, nonmoving parties
must demonstrate the existence or probable validity of their real property
claims. (Kirkeby v. Superior Court (2004) 33 Cal.4th 642, 647.) Probable
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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.’ ” (Amalgamated
Bank v. Superior Court, supra, 149 Cal.App.4th at p. 1016, italics added.)
Here, the trial court, citing Howard S. Wright Construction Co. v.
Superior Court (2003) 106 Cal.App.4th 314, found the evidence established “a
prima facie case of a breach, one that is capable of being remedied by specific
performance.” Thus, it concluded the lis pendens cannot be expunged for the
claim’s lack of probable validity. While only requiring a claimant to make a
prima facie case may have been appropriate when applying the former lis
pendens expungement provisions as interpreted by Wright, it was incorrect
here. Former section 409.1 provided, in relevant part, the court shall order a
notice of pendency of action be expunged unless the party filing the notice
shows by a preponderance of the evidence the action does affect title or right
of possession of real property and the party commenced or prosecuted the
action for proper purpose and in good faith. “Notwithstanding this statutory
directive of proof by a preponderance of the evidence,” the court in Malcolm
interpreted that provision as precluding the court from weighing or critically
evaluating the evidentiary merits of the motion to expunge. (Code Com., 14a
West’s Ann. Code Civ. Proc., supra, foll. § 405.3.) The “propriety of
expungement” did not depend on the “likely outcome of plaintiff’s lawsuit.”
(Malcolm, supra, 29 Cal.3d at p. 528.) And a plaintiff was only required to
present a prima facie case to retain the lis pendens on the property. (Id. at
p. 522.) Review “was reduced to little more than a demurrer-like
examination of the adequacy of pleadings.” (Code Com., 14a West’s Ann.
11
Code Civ. Proc., supra, foll. § 405.32, p. 242.) This was all appropriate for a
prima facie burden of proof — the “defining feature of the prima facie
standard is that it creates an initial burden on a moving party to proffer
evidence that would support a favorable ruling without a court’s
consideration of conflicting evidence put forth by the opponent.” (Finley v.
Superior Court (2023) 95 Cal.App.5th 12, 21.)
But to curb abuses of the lis pendens statute, the 1992 amendments
required, among other things, the recording party to show by a
preponderance of evidence that the action is probably valid. (Hunting World,
Inc. v. Superior Court (1994) 22 Cal.App.4th 67, 73.) Indeed, “the former
statute did not carefully distinguish between the concepts of adequate
pleading of a claim justifying a lis pendens and the evidentiary merit of the
claim.” (Code Com., 14a West’s Ann. Code Civ. Proc., supra, foll. § 405.4,
p. 199.) The amended statute thus requires a minitrial on the merits for
making a probable validity finding, not a “quasi demurrer-like analysis” as
the trial court noted here. (Amalgamated Bank v. Superior Court, supra,
149 Cal.App.4th at p. 1016.) Nothing in the statute indicates the claimant is
only required to make a prima facie case regarding the probable validity of
the real property claim. Rather, the statute expressly states the standard is
preponderance of the evidence. (§ 405.32.) This is particularly true where, as
here, the defendant made an appearance by filing a general denial of Gupta’s
claim. (Howard S. Wright Construction Co. v. Superior Court, supra,
106 Cal.App.4th at p. 319 [“ ‘If the defendant makes an appearance, the court
must then consider the relative merits of the positions of the respective
parties and make a determination of the probable outcome of the litigation’ ”];
California Dental Assn. v. American Dental Assn. (1979) 23 Cal.3d 346, 351.)
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Because the trial court erred by applying the prima facie burden of
proof for determining whether Gupta established the probable validity of her
real property claim, we do not address De Martini’s argument Gupta failed to
make a prima facie case that she would likely obtain a favorable judgment.
In light of these conclusions, we also vacate the grant of attorney fees to
Gupta. (§ 405.38.) We do not require the court to enter an order granting De
Martini his attorney fees associated with the motion to expunge the second
lis pendens. Rather, we leave the issue to the court to determine whether
there are special findings supporting the denial of fees. (Ibid.)
DISPOSITION
Let a peremptory writ of mandate issue directing the superior court to
vacate its order denying expungement of the notice of pending action and to
enter a new and different order: (1) granting the requested expungement
because Gupta did not seek leave from the trial court before recording the lis
pendens; (2) vacating Gupta’s award of attorney fees; and (3) ruling on De
Martini’s motion for attorney fees. The stay previously imposed is dissolved
upon the issuance of the remittitur. De Martini is entitled to recover his
costs in this writ proceeding. (Cal. Rules of Court, rule 8.493(a)(1)(A).)
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_________________________
RODRÍGUEZ, J.
WE CONCUR:
_________________________
TUCHER, P. J.
_________________________
FUJISAKI, J.
A168529
14
San Mateo County Superior Court, Hon. Nicole S. Healy.
Law Offices of Joe Della Santina, A.K. Abraham, for Petitioner.
No appearance for Respondent.
Pahl & McCay, Stephen D. Pahl and Eric J. Stephenson, for Real Party in
Interest.
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