Calaveras II, LLC v. Eastside Bend, LLC

350 Or. App. 259
Court of Appeals of Oregon·Decided June 3, 2026·No. A184616·Published

Opinion

No. 486 June 3, 2026 259

IN THE COURT OF APPEALS OF THE STATE OF OREGON

CALAVERAS II, LLC,

an Oregon limited liability company;

Cottages at Village Park, LLC, an Oregon limited liability company;

Scholls Development, LLC, an Oregon limited liability company;

and Saiid Behboodi and Bahram Behboodi, individuals, Petitioners-Respondents,

v.

EASTSIDE BEND, LLC,

an Oregon limited liability company, and Gary G. Miller, an individual, Respondents-Appellants.

Deschutes County Circuit Court 20CV12219; A184616

Alicia N. Sykora, Judge. Argued and submitted September 11, 2025. Michael H. McGean argued the cause for appellants. Also on the briefs were Foreman Sturm & Thede LLP.

Michael W. Peterkin argued the cause for respondents. Also on the brief were Peterkin Burgess and Stephanie C. Kucera and Hart Wagner LLP. .

Before Joyce, Presiding Judge, Lagesen, Chief Judge, and Hellman, Judge.* HELLMAN, J. Affirmed.

*

Lagesen, Chief Judge vice Armstrong, Senior Judge.

260 Calaveras II, LLC v. Eastside Bend, LLC

Cite as 350 Or App 259 (2026) 261

HELLMAN, J. Respondents Eastside Bend, LLC (Eastside) and its sole member, Gary Miller, appeal a general judgment granting a petition to strike invalid claims of encumbrance and awarding damages, and a supplemental judgment awarding fees and costs. Petitioners Calaveras II, LLC (Calaveras), Cottages at Village Park, LLC (Cottages), Scholls Development, LLC (Scholls), and Saiid and Bahram Behboodi (the Behboodis), are owners of 53 lots in a planned community against which respondents filed notices of lis pendens. The trial court granted their petition to strike the notices of lis pendens, and awarded petitioners statutory damages in the amount of $265,000 and attorney fees and costs.

On appeal, respondents raise two assignments of error. First, respondents argue that the trial court erred in striking the notices of lis pendens pursuant to ORS 205.460 because they were valid claims of encumbrance. Second, respondents argue that the trial court erred in awarding petitioners the $5,000 minimum in statutory damages under ORS 205.470 on a lot-by-lot basis.

We conclude that the trial court properly struck and released the notices of lis pendens because they were invalid encumbrances. In addition, we determine that, under the circumstances here, ORS 205.470 permits the award of its minimum statutory damages on a lot-by-lot basis, and therefore the trial court’s damages award is without error. Accordingly, we affirm.

I. LEGAL FRAMEWORK

To orient the reader to the real property issues in this case, we first summarize the applicable legal framework before discussing the case-specific facts. This case principally revolves around the interaction of three statutes: ORS 93.740, the lis pendens statute, and ORS 205.460 and ORS 205.470, the invalid encumbrance statutes.

Under ORS 93.740, a party in a lawsuit involving “title to or any interest in or lien upon real property” may record a “notice of the pendency of the action,” or a notice of lis pendens, in the county in which the real property is 262 Calaveras II, LLC v. Eastside Bend, LLC

located. ORS 93.740(1). The filing of a notice of lis pendens “give[s] constructive notice to one dealing with real property that is the subject of pending litigation that he does so subject to the outcome of that litigation”; in other words, the notice ensures that a party’s claimed interest in real property “will not be disturbed by certain other, subsequently recorded (or never recorded) claims to the same property, so long as [that party] ultimately prevails in the litigation.” Vukanovich v. Kine, 251 Or App 807, 813, 285 P3d 733 (2012), rev den, 353 Or 203 (2013) (emphasis in original). A notice of lis pendens thus alerts those interested in purchasing the affected real property to review the pending action and fully assess the associated risks before buying the property. Indian Ridge I, LLC v. Lenahan, 314 Or App 715, 724-25, 497 P3d 806 (2021). ORS 93.740 establishes the requirements for filing notices of lis pendens; among other things, the notice must include “the object of the suit.” ORS 93.740(1).

We next turn to ORS 205.460 and ORS 205.470, which are part of a set of statutes addressing invalid claims of encumbrance, or what we have referred to as the “invalid encumbrance statutes.” Allman v. Allman, 311 Or App 198, 201, 493 P3d 50 (2021). ORS 205.460 authorizes a person whose property is bound by an “invalid claim of encumbrance ” to petition a court to order the encumbrance claimant to attend a hearing and “show cause why the claim of encumbrance should not be stricken.” ORS 205.460(1). An “encumbrance” refers to a “claim, lien, charge or liability attached to and binding property.” ORS 205.450(1). A “valid claim of encumbrance” is one that is “authorized by statute,” among other things. ORS 205.450(8)(a). An “invalid claim of encumbrance” is “a claim of encumbrance that is not a valid claim of encumbrance.” ORS 205.450(5). Importantly, a notice of lis pendens affecting real property can qualify as a claim of encumbrance under the invalid encumbrance statutes . See Vukanovich, 251 Or App at 813-14, 816 (affirming the trial court’s authority to strike an improperly recorded notice of lis pendens under ORS 205.460).

After holding a show-cause hearing, a court must, under ORS 205.460, order a notice of lis pendens stricken and released if it determines that the notice is an invalid

Cite as 350 Or App 259 (2026) 263

encumbrance. ORS 205.460(1), (6). Upon striking an invalid encumbrance, the court may also award attorney fees, costs, and damages to a prevailing petitioner under ORS 205.460(6) and ORS 205.470. ORS 205.470 provides a minimum statutory damages award of $5,000 against “[a]ny person who knowingly files, or directs another to file, an invalid claim of encumbrance” to “the owner of the property bound by the claim of encumbrance.”

In sum, a litigant may record a notice of lis pendens that encumbers an owner’s real property where an underlying lawsuit involves “title to or any interest in or lien upon” that property. ORS 93.740(1). However, the affected property owner may petition a court to strike an improperly recorded notice of lis pendens as an invalid claim of encumbrance. ORS 205.460(1). If the court strikes the notice, the property owner may be entitled to attorney fees, costs, and statutory damages from the recorder of the invalid notice of lis pendens . ORS 205.460(6); ORS 205.470.

II. FACTS

We next turn to the relevant facts, which are brief and undisputed. Eastside is the purported declarant, or creator , of a planned community under the Oregon Planned Community Act (OPCA), ORS 94.550 to 94.783. See ORS 94.550(9) (defining “declarant” as “any person who creates a planned community under [the OPCA]”). Petitioners are real estate developers who own 53 individually titled lots in that community; those lots are subject to the community ’s “Declaration of Protective Covenants, Conditions and Restrictions” (CC&Rs).1 Petitioners began constructing townhouses on their lots without obtaining prior design approval from the community’s Architectural Review Committee, which Eastside considered a violation of the CC&Rs. Eastside, pursuant to its purported status as sole declarant, filed an action for injunctive relief against petitioners that sought to enjoin construction and enforce the CC&Rs related to design review and approval.2 Eastside 1 The record indicates that Calaveras owns 11 lots, Cottages owns 32 lots, Scholls owns 5 lots, and the Behboodis own 5 lots.

2 Although it does not bear on our resolution of this dispute, we note that in Eastside Bend, LLC v. Calaveras II, LLC, 349 Or App 550, __ P3d __ (2026), 264 Calaveras II, LLC v. Eastside Bend, LLC

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