Case Number: BC577979??? Hearing Date: August 08, 2016??? Dept: 58
Hearing Date: Monday, August 8, 2016
Calendar No: 8
Case Name: Behm v. Cervenka and Lukes Mortgage Corporation, et al.
Case No.: BC577979
Motion: Motion to Expunge Lis Pendens
Moving Party: Defendants/Cross-Complainants John Vorzimer and Samantha Vorzimer
Responding Party: Plaintiff/Cross-Defendant Barbara Behm
Tentative Ruling: Motion to expunge lis pendens is granted. No attorney fees or costs are awarded.
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On 4/8/15, Barbara Behm filed this action against Cervenka and Lukes Mortgage Corporation, Jay W. Cervenka, John R. Lukes, and John Lukes Jr. (collectively ?Cervenka and Lukes Parties?) and Tobin Koziol arising out of an alleged toxic loan secured by real property located at 801 E. Edgeware Rd., Los Angeles, CA 90026. On 5/20/15, Behm named John Vorzimer and Samantha Vorzimer as Doe 1 and 2. On 9/21/15, this action was assigned to this Court. On 12/16/15, Behm filed the First Amended Complaint which asserts causes of action for (1) breach of contract, (2) breach of the implied covenant of good faith and fair dealing, (3) slander, (4) predatory lending, (5) fraud and fraudulent concealment, and (6) violation of Bus. & Prof. Code ? 17200. On 1/20/16, the Vorzimers filed a cross-complaint against Behm for quiet title.
On 2/18/16, Behm dismissed Koziol with prejudice. Trial is set for 8/15/16; FSC for 8/11/16.
Motion to Expunge Lis Pendens ?
The Vorzimers move to expunge the lis pendens Behm recorded on the property. ?[A]t any time after notice of pendency of action has been recorded, any party, or any nonparty with an interest in the real property affected thereby, may apply to the court in which the action is pending to expunge the notice . . . The claimant shall have the burden of proof under Sections 405.31 and 405.32.? CCP ? 405.30. ?In proceedings under this chapter, 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? (CCP ? 405.31), or ?[i]f the court finds that the claimant has not established by a preponderance of the evidence the probable validity of the real property claim? (CCP ? 405.32).
?On review of the trial court’s ruling, the appellate court does not reweigh conflicting evidence or determine the credibility of witnesses. The reviewing court’s task is simply to ensure that the trial court’s factual determinations are supported by substantial evidence. If, however, the material facts are not disputed, then the issue becomes a question of law for our de novo review.? Howard S. Wright Construction Co. v. Superior Court (2003) 106 Cal.App.4th 314, 320 (citations omitted).
1. Proper Purpose and Good Faith
Preliminarily, the Court notes that Behm submits that she has commenced this action for a proper purpose and in good faith (see Coppinger v. Superior Court (1982) 134 Cal.App.3d 883, 887-88), but this addresses a standard that is no longer applied in determining a motion to expunge lis pendens (see CCP ? 405.32, Comment n.6).
2. Real Property Claim
A ?real property claim? is defined as ?the cause or causes of action in a pleading which would, if meritorious, affect (a) title to, or the right to possession of, specific real property . . . .? CCP ? 405.4. The Court applies a demurrer-like review to ascertain whether a real property claim has been properly alleged. Campbell v. Superior Court (2005) 132 Cal.App.4th 904, 911-12.
The Vorzimers argue that Behm only asserts equitable remedies of a constructive trust or an equitable lien to secure a claim for money damages which are insufficient to support a lis pendens. See Campbell, 132 Cal.App.4th at 912; Lewis v. Superior Court (1994) 30 Cal.App.4th 1850, 1862-64; see also BGJ Associates, LLC v. Superior Court (1999) 75 Cal.App.4th 952, 971-72 (?where the pleading combines theories of liability for monetary damages and for a constructive trust, we hold that plaintiffs should not be able to maintain a lis pendens.?). The Court disagrees.
Although every cause of action in the FAC alleges that Behm has been damaged and seeks recovery of monetary damages, Behm has also challenged the legitimacy of the Vorzimers acquiring the property at the foreclosure sale. See, e.g., FAC ?? 9-10. Indeed, although Behm did not specifically assert a cancellation of instruments or quiet title claim, Behm has asserted a slander of title claim which challenges the deed of trust upon which the foreclosure proceeded (FAC ? 43), and seeks cancellation of instruments that have slandered Plaintiff?s title (id. at p. 45:25-26) which would include the Vorzimers? trustee?s deed upon sale after foreclosure. Considering the general nature of a slander of title claim (see M.F. Farming, Co. v. Couch Distributing Co. (2012) 207 Cal.App.4th 180, 198-99 (disapproved on other grounds in Baral v. Schnitt (2016) 2015 WL 4074081 *13 n. 11)) and looking at the substance of the dispute (BGJ Associates, LLC, 75 Cal.App.4th at 967-70), the Court concludes that Behm has alleged a real property claim.
3. Probability of Prevailing
Behm asserts that the foreclosure sale was a sham because the Vorzimers ?pre-paid? the foreclosure to bring Behm?s loan out of default. Behm Decl. ? 6. But this fails to fully explain how the Vorzimers allegedly came to acquire their interest in the property.
Behm?s evidence stablishes that the Vorzimers purchased Behm?s loan though a collateral loan from the same lenders (Brown Decl. Exs. 5-6) after the trustee of the deed of trust for Behm?s loan ? the Cervenka and Lukes Parties ? reached out to the Vorzimers to provide the opportunity to purchase Behm?s loan or the property (id. Exs. 16-17). The Vorzimers then paid for the purchase of Behm?s loan based on a collateral loan given to the Vorzimers from the same lenders as Behm?s loan (see id. Ex. 6), effectively paying Behm?s defaulted balance on her loan by making payments on the collateral loan the interest rate of which was calculated at the non-default interest rate rather than at the higher defaulted interest rate accruing on Behm?s loan (see id. Ex. 15).
This evidence establishes that the Vorzimers purchased Behm?s loan by receiving a collateral loan from the same lenders and that the Vorzimers made payments on the collateral loan. It does not suggest that Behm?s loan was cancelled (see, e.g., Alexander v. Angel (1951) 37 Cal.2d 856, 860-61 (novation)) or brought current.
The Court notes that Behm?s opposition focuses on the alleged wrongful foreclosure sale. See Behm Decl. ?? 1-7. No evidence was submitted as to the alleged fraudulent deed of trust for Behm?s loan (see FAC ? 24), or even as to the alleged toxic/predatory nature of Behm?s loan. Notwithstanding whatever arguments Behm may have reagrding the interest charged on her loan, Behm?s challenge as to the foreclosure sale in which the Vorzimers acquired the property requires Behm to allege tender of at least the principal amount owed on her loan which Behm has failed to do. Abdallah v. United Savings Bank (1996) 43 Cal.App.4th 1101, 1109. Therefore, the Court concludes that Behm has failed to establish by a preponderance of the evidence the probable validity of her real property claim. The motion to expunge lis pendens is granted.
4. Attorney Fees
The Vorzimers request attorney fees and costs pursuant to CCP ? 405.38. In the exercise of its discretion on this particular motion under the circumstances, and in the interests of justice, the Court declines to award attorney fees and costs. The purpose of the attorney fees and costs provision is ?to mitigate against and control misuse of the lis pendens procdure.? Trapasso v. Superior Court (1977) 73 Cal.App.3d 561, 569. This purpose would not be served by an award of attorney fees and costs because of the special circumstances here. Notably, the lis pendens was recorded on 4/30/15 and this motion was not brought until 7/8/16 on the eve of trial. Additionally, the Vorzimers submit that they have been paying a high interest on the collateral loan and have not been able to sell or refinance the property because of the lis pendens (John Vorzimer Decl. ? 4), but the high interest was what the Vorzimers agreed to undertake when purchasing Behm?s loan pursuant to the collateral loan, and the Vorzimers fail to explain why this motion was not earlier filed. Under these circumstances, the Court concludes that an award of attorney fees and costs would be unjust and would not advance or otherwise serve the remedial purposes of the lis pendens statutes.
5. Ruling
The motion to expunge lis pendens is granted. No attorney fees and costs are awarded. The Vorzimers have objected to portions of the declarations of Behm and her counsel concerning the amount claimed as her damages. The objections are overruled, but the objected portions were not considered in the Court?s ruling in any event.
Summary
This case has been pending since April 8, 2015. Trial is fast approaching: August 15, 2016. The Court has perceived little or nothing that would suggest that a settlement is likely. The Court would expect at the motion hearing to accelerate the pretrial process in anticipation of the Final Status Conference on August 11, 2016.