Contributors

Julie S. Pearson

Principal

When a challenge is looming, a proactive withdrawal could be your strongest move.

You recorded a Notice of Pendency of Action (the “Notice”), also referred to as a “lis pendens,” in your litigation involving claims affecting real property. You now have priority to any judgment obtained after the Notice was recorded which affect the property.[1]

The Notice indicates real property ownership rights are in dispute, and can effectively deter subsequent transfer or encumbrance of the property. However, the Notice is not immune from attack. Anyone claiming an adverse right to the property can challenge the Notice by bringing a motion to expunge. The motion asserts the real property claim is not adequately supported by facts to justify impairing title with the Notice. It also entitles the prevailing party the right to recover attorneys’ fees incurred with the motion.

Before you get to the point of opposing a motion to expunge, you and your counsel should consider how to approach the potential for attack on the Notice by motion to expunge.

Because the moving party is not automatically entitled to recovery of attorneys’ fees incurred in connection with withdrawal of the Notice, preemptive withdrawal may be the right approach to avoid that expense.

Preemptive withdrawal can also reduce the exposure for greater contract damages arising from ongoing operating costs and diminished property value over the course of litigation.[2]

Although withdrawal can support future claims for malicious prosecution premised on a showing of malice evidenced by an unmeritorious real property claim and withdrawal of the Notice, withdrawal is still superior to forcing a motion to expunge, which could demonstrate similar flaws in the claim and expressly allow for recovery of attorneys’ fees.

The purpose of recording a Notice of Pendency of Action is to give constructive notice of a pending lawsuit affecting the real property described in the Notice.[3] Key to the propriety of a Notice is the assertion of a claim which affects title or the right to possession of the real property if successful. Once in place, the Notice clouds title until the litigation is resolved or the Notice is withdrawn or expunged.[4] A Notice can be removed by a motion to expunge.[5] Grounds to expunge the Notice include that the complaint does not actually plead facts adequately demonstrating a real property claim, or the real property claim “lacks evidentiary merit.”[6]

The party opposing a motion to expunge must demonstrate the existence of a real property claim that is “probably valid” by a “preponderance of the evidence”.[7] The court will determine whether the pleading adequately states such a claim and is supported by evidence which has more convincing force and thus the greater probability is in favor of the plaintiff. [8]

A lis pendens may be voluntarily withdrawn by the party who filed the Notice.[9] Withdrawal can be filed while the motion to expunge is pending, or prior to the filing of the motion to expunge.[10]

The prevailing party on a motion to expunge is entitled to recover attorneys’ fees incidental to the motion.[11] Principally designed to deter strategic filing of Notice, the party’s liability for often substantial fees and costs can be avoided only by a showing of substantial justification, or other facts which make imposing those fees and costs unjust.[12]

However, withdrawal of a Notice before, or while a motion to expunge is pending, does not entitle the moving party to recover attorneys’ fees because the motion will not be decided.

Instead, the trial court has discretion to award attorneys' fees to the prevailing party. To determine the prevailing party, the court employs the practical approach to establish which party secured its litigation goals, whether the party that withdrew the Notice acted with substantial justification, or other circumstances make the imposition of attorneys’ fees unjust.[13]

Facts and circumstances militating against the discretionary award of attorney fees, include settlement, discovery of inadvertent defects in the Notice, or dismissal of the real property cause of action or the litigation due to later acquired facts detrimental to the probable success of the real property claim.

Filing and recording a Notice of Pendency of Action is often a necessary litigation tool. Whether to withdraw or wait for a motion to expunge a flawed Notice or a deficient real property claim includes possible consequences beyond the loss of the protection afforded by the Notice of the litigation. The potential for an award of attorneys’ fees and costs against the party who recorded the Notice should be considered seriously and strategically as soon as grounds for withdrawal or expungement arise. Parties are always encouraged to discuss the options with their counsel as early in the case as possible.

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[1] California Civil Procedure Code §405.01 et seq.

[2] Askari v. R & R Land Co. (1986) 179 Cal.App.3d 1101, 1108-1112.

[3] Bishop Creek Lodge v. Scira (1996) 46 Cal.App.4th 1721, 1733.

[4] Nunn v. JPMorgan Chase Bank, N.A. (2021) 64 Cal.App.5th 346, 363.

[5] Cal. Civ. Proc §405.30.

[6] Cal. Civ. Proc §405.31, Park 100 Investment Group II, LLC v. Ryan (2009) 180 Cal.App.4th 795, 808.

[7] Shoker v. Superior Court of Alameda County (2022) 81 Cal.App.5th 271, 277; Cal. Civ. Proc §405.32.

[8] Newell v. Superior Court (2024) 107 Cal.App.5th 728, 735; Bichai v. DaVita, Inc. (2021) 72 Cal.App.5th 1126, 1138–1139.

[9] Cal. Civ. Proc. §405.50.

[10] Castro v. Superior Court (2004) 116 Cal.App.4th 1010, 1023.

[11] Cal. Civ. Proc. §405.38. J&A Mash & Barrel, LLC v. Superior Court of Fresno County (2022) 74 Cal.App.5th 1, 42.

[12] Id.

[13] Castro, at 1022-1023.