Rey Sanchez Investments v. Superior Court

• Court: California Court of Appeal
• Decided: January 26, 2016
• Docket: E063757
• Status: Published

Opinion

Filed 1/6/16; pub. order 1/26/16 (see end of opn.)

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION TWO

REY SANCHEZ INVESTMENTS,

Petitioner, E063757

v. (Super.Ct.No. CIVDS1403591)

THE SUPERIOR COURT OF OPINION SAN BERNARDINO COUNTY,

Respondent;

PCH ENTERPRISES, INC.,

Real Party in Interest.

ORIGINAL PROCEEDINGS; petition for writ of mandate. Bryan Foster, Judge.

Petition granted.

Law Offices of Mary Jean Pedneau, Mary Jean Pedneau and William R. Larr for

Petitioner.

No appearance for Respondent.

No appearance for Real Party in Interest.

1 After reviewing the petition for writ of mandate, we requested a response from

real party in interest. It declined to file one. We have determined that resolution of the

matter involves the application of settled principles of law, and that issuance of a

peremptory writ in the first instance is therefore appropriate. (Palma v. U.S. Industrial

Fasteners, Inc. (1984) 36 Cal.3d 171, 178.)

FACTUAL AND PROCEDURAL HISTORY

On March 28, 2014, real party in interest sued Sallie J. Cribley-Cole and Anna

Gonzalez (defendants) for breach of contract, specific performance, and declaratory

relief.1 It alleged defendants failed to perform on a written agreement to sell a certain

parcel of real property (subject property) to real party in interest. Real party in interest

recorded a lis pendens on the same day it filed the complaint. No proof of service

accompanied the lis pendens.

On March 2, 2015, petitioner sought leave to intervene in the action. The trial

court granted the request on March 18, 2015. The complaint in intervention alleged that

petitioner was the true owner of the subject property pursuant to a grant deed that was

recorded on April 2, 2014.

1 Defendants are not a party to this writ proceeding.

2 Petitioner moved to expunge the lis pendens on March 25, 2015. Relying on Code

of Civil Procedure section 405.23,2 it argued the lis pendens was completely void due to

invalid service.

Real party in interest filed a written opposition citing Biddle v. Superior Court

(1985) 170 Cal.App.3d 135 (Biddle), for the proposition that a trial court should not grant

a motion to expunge on grounds that there were technical defects in service if the

defendant has actual notice, and that the failure to timely raise issues about service of a

lis pendens waives the right to expungement due to improper service. Real party in

interest offered a proof of service indicating the lis pendens was personally served on

Cribley-Cole on November 7, 2014. To support the assertion that petitioner waived the

service defects raised in the motion to expunge, real party in interest offered a declaration

from its counsel, who attested to having received a demand letter about the lis pendens

from an agent of petitioner on January 6, 2015.

The trial court denied the motion to expunge on May 26, 2015. The minute order

states: “[Petitioner] had actual notice and waived defects in service by waiting more than

six months to file [a] motion to expunge. Pursuant to Biddle v. Superior Court[, supra,]

170 Cal.App.3d 135 such service irregularities are insufficient to void the lis pendens.”

2 All further statutory references are to the Code of Civil Procedure, unless otherwise stated.

3 ANALYSIS

Petitioner argues the lis pendens is completely void and therefore subject to

expungement because service was improper. It also contends no undue delay in seeking

expungement occurred. We agree.

A petition for writ of mandate is the exclusive means of obtaining review of an

order granting or denying a motion to expunge a lis pendens. (§ 405.39.) In adjudicating

this petition, “We apply dual standards of review. ‘ “If the trial court resolved disputed

factual issues, the reviewing court should not substitute its judgment for the trial court’s

express or implied findings supported by substantial evidence. [Citations.]” [Citation.]

“ ‘[W]e must consider the evidence in the light most favorable to the prevailing party,

giving such party the benefit of every reasonable inference, and resolving all conflicts in

support of the judgment. [Citation.]’ [Citation.]” [Citation.]’ (Chino Commercial Bank,

N.A. v. Peters (2010) 190 Cal.App.4th 1163, 1169-1170 [Fourth Dist., Div. Two].)

However, ‘[t]he interpretation of a statute and its application to undisputed facts are

questions of law subject to de novo review. [Citation.]’ (Rialto Citizens for Responsible

Growth v. City of Rialto (2012) 208 Cal.App.4th 899, 917 [Fourth Dist., Div. Two].)”

(Carr v. Rosien (2015) 238 Cal.App.4th 845, 852 (Carr) [Fourth Dist., Div. Two].)

“ ‘In California, a notice of lis pendens gives constructive notice that an action has

been filed affecting title or right to possession of the real property described in the notice.

[Citation.] Any taker of a subsequently created interest in that property takes his interest

subject to the outcome of that litigation.’ ” (Campbell v. Superior Court (2005) 132

4 Cal.App.4th 904, 910-911.) If an action asserts a “real property claim,” any party to the

action may record a lis pendens. (§ 405.20.)

A “court shall order” expungement of a lis pendens if the pleading on which the lis

pendens is based does not state a real property claim, if the claimant fails to establish the

probable validity of the claim on which the lis pendens is based, or if the giving of an

undertaking would secure adequate relief to the claimant. (§§ 405.31, 405.32, 405.33.)

A nonstatutory ground also exists, such that a party alleging a lis pendens is “void and

invalid” (§ 405.23) for defective service may move for expungement on that basis.

(McKnight v. Superior Court (1985) 170 Cal.App.3d 291, 303 (McKnight); cf. Carr,

supra, 238 Cal.App.4th at p. 857 [noting holding in McKnight but concluding such a

motion is not required before a lis pendens that was not validly served may be deemed

void].)

The motion at issue on this petition relied on section 405.23, which reads in full:

“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.” Section 405.22, in turn, requires the

claimant filing a lis pendens to serve “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” by registered or certified mail,

return receipt requested, at all known addresses. If the county assessor lacks a known

5 address for a party or owner, the claimant may file a declaration to that effect in lieu of

the mailing that would otherwise be required. (§ 405.22; Carr, supra, 238 Cal.App.4th at

p. 852.) Section 405.22 further provides: “Service shall also be made immediately and

in the same manner upon each adverse party later joined in the action.”

Petitioner has shown the lis pendens real party in interest recorded is “void and

invalid” as to it. (§ 405.23.) First, no proof of service was recorded with the lis pendens.

Second, noncompliance with section 405.22 occurred because, once petitioner became a

party to the action, service “in the same manner” as section 405.22 prescribes when a lis

pendens is first recorded was not “made immediately” on petitioner. (§ 405.22.)

In Carr, we noted that unfairness might result if a lis pendens that was valid as to

one party were expunged because of invalidity as to another party. (Carr, supra, 238

Cal.App.4th at p. 857.) However, the holding of Carr was that a lis pendens that is “void

and invalid” under section 405.23 does not need to be expunged in order for it to be void

and invalid; that status exists ab initio. (Ibid.) This means defendants here were not

obligated to move to expunge before the lis pendens, which provided no proof of service

of any kind, can be deemed “void and invalid” as to them as well as to petitioner.

(§ 405.23.)

Having found the lis pendens void as to petitioner and defendants, we next

consider whether the principles announced in Biddle, which essentially created an

exception to strict application of section 405.23 in some cases involving service defects,

apply. There, the petitioners recorded a lis pendens, but served it defectively by not using

6 all of the defendants’ known addresses and by failing to request a return receipt. (Biddle,

supra, 170 Cal.App.3d at p. 137.) The defendants filed a motion to expunge the lis

pendens under former section 409.1, which was denied. One week later, a second motion

under former section 409.2 was granted, but the defendants failed to post the required

bond. Thereafter, the defendants transferred their interest in the property to a related

company, which declared bankruptcy. (Ibid.) One year after recordation of the lis

pendens, the defendants filed a third motion raising the defect in service. The trial court

ordered the lis pendens expunged. (Ibid.)

The reviewing court issued a writ of mandate requiring the trial court to deny the

third motion to expunge. (Biddle, supra, 170 Cal.App.3d at p. 138.) As we explained in

Carr, “the reasoning in Biddle had two prongs: First, the plaintiffs substantially

complied with the mailing requirement; and second, the defendants waived any defects.”

(Carr, supra, 238 Cal.App.4th at p. 855.) Carr noted the Legislature had explicitly

approved of Biddle’s waiver principle, but not its substantial compliance principle. (Ibid;

see official code comment, 14A West’s Ann. Code Civ. Proc. (2004 ed.) foll. § 405.23, p.

332 [“It is not the intention of this section to disapprove the principles of waiver applied

in Biddle . . . .].) While we continue to acknowledge this could be read as a rejection of

the idea that substantial, rather than strict, compliance with section 405.22 might suffice

to prevent a lis pendens from being declared “void and invalid” under section 405.23, we

need not resolve this issue now, just as was true in Carr. (Carr, supra, 238 Cal.App.4th

at p. 855.)

7 “Even assuming that substantial compliance with section 405.22 remains

sufficient, [real party in interest] did not substantially comply.” (Carr, supra, 238

Cal.App.4th at p. 855.) In fact, it made no effort at all to comply with section 405.22’s

service rules, as no proof of service of any kind accompanied the lis pendens. (See Ibid.

[no substantial compliance by the plaintiff who “did not mail the lis pendens to [the

defendant] at any address”; also, there was no evidence the defendant ever received it].)

For these reasons, real party in interest’s noncompliance with section 405.22

means it cannot satisfy both prongs of the Biddle exception. As in Carr, we need look no

further. (Carr, supra, 238 Cal.App.4th at p. 855.) Still, even considering the issue of

delay on the merits, we find no evidence in the record supporting this as a ground for

denying relief to petitioner.

We cannot discern on what the trial court relied when it found that “[Petitioner]

had actual notice and waived defects in service by waiting more than six months to file

[a] motion to expunge.” The opposition real party in interest filed to petitioner’s motion

to expunge raised the issue of delay so that it could ask the trial court to invoke an

exception to the rule that Code of Civil Procedure section 405.23 creates. In our view,

real party in interest therefore bore the burden of proof on that issue. (See Evid. Code,

§ 500.) With respect to petitioner, the only evidence presented was that one of its agents

contacted counsel for real party in interest about the lis pendens on January 6, 2015. This

date is only 78 days from the date on which petitioner filed its motion to expunge.

Nothing in Biddle, in which the defendants moving to expunge waited over a year to

8 contest service and did not do so until after transferring the real property to an insolvent

entity they controlled (Biddle, supra, 170 Cal.App.3d at p. 137), supports a finding that

78 days of delay justifies refusing to expunge a lis pendents that is “void and invalid”

under section 405.23.

We are once again mindful that adverse consequences might flow if we ordered

the expungement of a lis pendens that is valid against the defendants just because it is

invalid as to petitioner. However, the voidness of this lis pendens is so apparent that we

could only find it invalid as to defendants if we invoked Biddle, and we cannot invoke

Biddle on the record before us. Real party in interest’s opposition to the motion to

expunge showed that only one of the defendants was personally served with the lis

pendens on November 7, 2014. Nothing in the record reflects service of any kind on

defendant Gonzalez. Even as to defendant Cribley-Cole, we find no basis for applying

the findings the trial court made to her. First, Cribley-Cole never asked the trial court to

do anything with respect to the lis pendens. Petitioner filed the motion to expunge, and

there is no indication Cribley-Cole joined in the request for judicial intervention. Second,

the minute order denying the motion to expunge does not say that Cribley-Cole delayed

six months before moving to expunge, but that “Plaintiff-in-Intervention, Rey Sanchez

Investments” did. Finally, even if this statement about a six-month delay were meant to

apply to Cribley-Cole, it cannot by its own terms. No one “wait[ed] more than six

months to file [a] motion to expunge;” rather, petitioner filed one on March 25, 2015, or

138 days from service on defendant Cribley-Cole of the lis pendens on November 7,

9 2014. The trial court therefore has not made a factual finding about the extent of

defendant Cribley-Cole’s delay, and we will not do so in the first instance.

DISPOSITION

Let a peremptory writ of mandate issue, directing the Superior Court of San

Bernardino County to vacate the order denying petitioner’s motion to expunge lis

pendens and instead enter an order granting that motion.

Petitioner is directed to prepare and have the peremptory writ of mandate issued,

copies served, and the original filed with the clerk of this court, together with proof of

service on all parties.

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

RAMIREZ P. J.

We concur:

CODRINGTON J.

MILLER J.

10 Filed 1/26/16

CERTIFIED FOR PUBLICATION

THE SUPERIOR COURT OF ORDER CERTIFYING OPINION SAN BERNARDINO COUNTY, FOR PUBLICATION

PCH ENTERPRISES,

THE COURT:

The request, filed January 19, 2016, for publication of a nonpublished opinion filed in the above matter on January 6, 2016, is GRANTED. The opinion meets the standards for publication as specified in California Rules of Court, rule 8.1105(c).

1 IT IS SO ORDERED that said opinion be certified for publication pursuant to California Rules of Court, rule 8.1105(b).