Richey v. Western Pacific Development Corp.

684 P.2d 169, 140 Ariz. 597, 1984 Ariz. App. LEXIS 419
CourtCourt of Appeals of Arizona
DecidedMay 17, 1984
Docket2 CA-CIV 5005
StatusPublished
Cited by20 cases

This text of 684 P.2d 169 (Richey v. Western Pacific Development Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Richey v. Western Pacific Development Corp., 684 P.2d 169, 140 Ariz. 597, 1984 Ariz. App. LEXIS 419 (Ark. Ct. App. 1984).

Opinion

OPINION

HATHAWAY, Judge.

Appellees were granted summary judgment on their amended counterclaim charging appellants with wrongful filing of a lis pendens.

The undisputed facts disclose that appellants brought suit to collect a real estate commission from appellees, and on November 30, 1983, summary judgment was entered in appellants’ favor and against Western Pacific for the underlying commission in the amount of $8,000. Shortly after commencing the lawsuit, appellants filed a lis pendens which gave notice of the lawsuit and stated that “[T]he Plaintiff is seeking to enforce rights which may affect title to the following described real proper-ty____” An exhibit was attached describing the property which was the subject property in their lawsuit to collect the real estate commission.

When the lis pendens was filed, Pioneer Trust Company, as trustee under Trust No. 11,423, held record title to the property for the benefit of the Barnhills, the original grantors, and Western Pacific, under a dual beneficiary trust. Within a month after recordation of the lis pendens, Western Pacific assigned its beneficial interest in the property to Park Tucson Ltd., a limited partnership, where Eddins and Wystrach were the general partners.

Approximately five months after the Park Tucson assignment, appellees’ attorneys demanded by letter of December 13, 1982, the removal of the lis pendens. The letter provided:

“As I indicated to you on the phone Friday, December 10th, I have been advised of a Notice of Lis Pendens dated June 28, 1982, signed by yourself, as attorney for Thomas and Barbara J. Richey. This Notice of Lis Pendens says that ‘The Plaintiff is seeking to enforce rights which may affect title to the following described real property’ and you attached Exhibit ‘A’ to the Lis Pendens. I have reviewed your Complaint in this matter and you have not asked for nor *599 claimed any relief which would affect title to the real property described in Exhibit ‘A’ attached to your Lis Pendens. You indicated on the phone that you were aware of A.R.S. § 33-420 which not only provides damages for a willful filing of a Lis Pendens but makes it a misdemeanor. My clients are very upset about this wrongful filing of the Lis Pendens, and if it is not removed today it may have some very disasterous effects on several projects that they are working on involving that real property. In my opinion, your clients and yourself would be directly liable for any damage caused by the wrongful filing of the Lis Pendens. I am hereby demanding that the Lis Pendens be removed immediately and without delay so that further action can be avoided.” (Emphasis in original).

Thereafter, appellees counterclaimed for damages on the basis of A.R.S. § 33-420. Summary judgment was entered on appel-lees’ counterclaim awarding $1,000 to ap-pellees, Western Pacific, William Eddins, Janet Eddins, Michael Wystrach and Grace Wystrach. An award of $2,200 for attorney’s fees was also given.

Issues presented on this appeal are: (1) Was A.R.S. § 33-420 intended to encompass lis pendens? (2) After a lis pendens is filed, can transferees of beneficial interests recover “strict” damages under A.R.S. § 33-420(A)? (3) Are “strict” damages under A.R.S. § 33-420(A) limited to $1,000? (4) Were attorneys fees properly awarded to appellees in this case?

We first consider whether A.R.S. § 33-420 encompasses lis pendens. “Lis pendens” means “a pending suit.” Black’s Law Dictionary, Rev. 4th ed. (1968), p. 1081. The recording of a lis pendens is authorized by A.R.S. § 12-1191. 1 The purpose of a lis pendens was stated in Stewart v. Fahey, 14 Ariz.App. 149, 481 P.2d 519 (1971), where the court quoted from Brandt v. Scribner, 13 Ariz. 169, 108 P. 491 (1910):

“ ‘The statute is obviously intended to make the recording of the lis pendens constructive notice of all that is claimed in the action regardless of whether such claims are sufficiently plead, in so far as their nature and extent are disclosed by the pleadings____’” 14 Ariz.App. at 151, 481 P.2d 519.

Thus, the statute authorizes the filing of a lis pendens in the office of the recorder where an action is involved “affecting title to real property.” A lis pendens gives constructive notice to prospective purchasers or lenders that litigation is underway which affects title to the real property. Appellants’ reliance on Stewart v. Fahey, supra, is misplaced. There, the lis pendens could not serve as the basis of an action for slander of title. Here, appellees are proceeding under a statute (added by Laws 1981) to collect damages when groundless documents regarding a claimed interest in land is filed. Appellants agree that the lis pendens statutes are designed to provide a better form of notice to one who may be *600 interested in a particular piece of property that it is involved in litigation. This is borne out in Kelly v. Perry, 111 Ariz. 382, 531 P.2d 139 (1975). They argue, however, that a lis pendens only give notice that a lawsuit has been filed “which affects the title to real property.” They point out that prospective purchasers or encumbrancers may thereafter investigate any purported claim to an interest in the real property by searching the court records. A difficulty with appellants’ position may arise in lawsuits which do not, at the time of investigation, reveal that it affects the title to real property, but which may thereafter be amended to disclose that, indeed, title to real property is affected by the litigation. It is admitted in the instant case that the lawsuit does not affect the title to real property. 2

Liability under A.R.S. § 33-420 attaches when a groundless document purporting to claim an interest in real property is filed in the county recorder’s office. The statute provides:

“§ 33-420. False documents; liability; special action; damages; violation; classification
A.

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Bluebook (online)
684 P.2d 169, 140 Ariz. 597, 1984 Ariz. App. LEXIS 419, Counsel Stack Legal Research, https://law.counselstack.com/opinion/richey-v-western-pacific-development-corp-arizctapp-1984.