Failure to Expunge a Lis Pendens Precluded an Unlawful Detainer Judgment

CONTACT
Patrick J. Sullivan

Email Address: psullivan@hornerlawgroup.com

Many real estate documents are not effective against third parties until the document is recorded, with the recorder’s office in the county where the real property is located.


In California, the following types of documents are not valid unless they are recorded: mechanic’s liens, involuntary attachment liens, and restrictive covenants. Notice of a pending action, or a “lis pendens” may be recorded against a property in an action affecting title or the right to possession of the property. Recording a “lis pendens” against real property clouds the title of the property until the pending litigation is resolved or the lis pendens is expunged.


In the recent case of Homeward Opportunities Fund I Trust 2019-2 v. Taptelis, a court of appeal ruled that Homeward Opportunities Fund I’s (“Homeward”) notice to quit was void because Taptelis had recorded a lis pendens on the property before Taptelis was served with a notice to quit.


Summary:


In the recent case of Homeward Opportunities Fund I Trust 2019-2 v. Taptelis (Cal. Ct. App., Oct. 12, 2023, No. H049791) 2023 WL 6631984, Taptelis borrowed $1.24 million from Homeward to purchase a property. After Taptelis defaulted on the loan, Homeward began foreclosure proceedings and recorded a Notice of Default against the property. Two weeks after the Notice of Default was recorded Taptelis filed a civil suit which challenged the foreclosure and named Homeward as one of the defendants in the civil suit. Two days prior to the scheduled foreclosure sale Taptelis recorded a lis pendens (giving notice of the wrongful foreclosure action) against the property.


Homeward proceeded with the foreclosure sale and then began the eviction process against Taptelis by serving Taptelis with a notice to quit and then bringing an unlawful detainer action to trial against Taptelis. The unlawful detainer trial finished before Taptelis' wrongful foreclosure action was resolved and Taptelis was denied asserting the wrongful foreclosure claims in the unlawful detainer trial. Homeward prevailed in the unlawful detainer trial and Taptelis appealed.


The court of appeal found that Taptelis' lis pendens clouded title to the property and Homeward's notice to quit was void because Homeward had not expunged the lis pendens and Taptelis' civil suit was not yet resolved.


Because Homeward did not perfect title by expunging the lis pendens before serving the notice to quit, the notice to quit was deemed void and the previous unlawful detainer judgment against Tapielis and in favor of Homeward was also void.


Take Away:


Generally, in California, title must be perfected before a notice to quit may be served. Parties who wish to proceed with an eviction or an unlawful detainer action should be careful to check [and] expunge any lis pendens recorded against a property before serving a notice to quit.


By: Clifford R. Horner, Esq.

Patrick J. Sullivan, Esq.

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