Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_05-cv-00659/USCOURTS-caed-2_05-cv-00659-2/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 23:1441 Contract Real Estate

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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

B.C.N. DEVELOPMENT, LLC, ) NO. CIV. S-05-0659 GEB (DAD)

a Colorado limited liability )

company, )

)

Plaintiff, )

) ORDER

v. )

) 

CIRBY DEVELOPMENT CORPORATION,)

a California corporation; )

YOUNG-INGEMANSON, a )

California general )

partnership; 1017 J STREET )

ASSOCIATES, a California )

general partnership; and )

MOUNTAIN VIEW HOLDINGS, LLC, )

a Nevada limited liability )

company, )

)

Defendants. )

)

Pending are two motions to expunge a lis pendens that B.C.N.

Development, LLC (“BCN”) recorded against a parcel of real property

located at 1023 J Street in Sacramento, California (“Property”). 

Cirby Development Corporation (“Cirby”) and Young-Ingemanson, a

California general partnership; 1017 J Street Associates, a California

general partnership; and Mountain View Holdings, LLC (collectively

“Young-Ingemanson”) each move to expunge BCN’s lis pendens. BCN

counters that the lis pendens ensures that BCN would be able to obtain

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specific performance of a land purchase agreement for the sale of the

Property between Cirby and BCN (“Cirby/BCN Purchase Agreement”), which

BCN contends obligates Cirby to sell the Property to BCN after Cirby

acquires title to the Property from Young-Ingemanson.

Young-Ingemanson’s motion seeks to have the lis pendens

expunged based on its contention, inter alia, that BCN’s Complaint

does not plead a “real property claim,” as that term is defined in the

California Code of Civil Procedure. Young-Ingemanson argues that BCN

cannot seek specific performance of the Cirby/BCN Purchase Agreement

because there is no contractual privity between Young-Ingemanson and

BCN and BCN’s interest in the Property is contingent on YoungIngemanson selling the property to Cirby. BCN responds that it is

entitled to specific performance of the Cirby/BCN Purchase Agreement

because the Cirby/BCN Purchase Agreement imbues BCN with the same

equitable interest in the Property that Cirby possesses.

Cirby’s motion to have the lis pendens expunged is based on

the argument that BCN cannot show by a preponderance of the evidence

that Cirby breached the Cirby/BCN Purchase Agreement. Specifically,

Cirby contends that BCN materially breached the Cirby/BCN Purchase

Agreement when it failed to release funds deposited in escrow. BCN

responds that Cirby waived this breach.

ANALYSIS

I. The Lis Pendens

The authorization to file a notice of lis pendens

is found in section 405.20 of the Code of Civil

Procedure. In pertinent part it provides: "A party

to an action who asserts a real property claim may

record a notice of pendency of action in which

that real property claim is alleged." (Emphasis

added.)

"Real property claim" is defined in another

statute of the same code, section 405.4, to mean

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1 BCN also seeks declaratory and injunctive relief, but

these requests are subsumed in the analysis of whether BCN has

pled a real property claim.

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"the cause or causes of action in a pleading which

would, if meritorious, affect . . . title to, or

the right to possession of, specific real

property. . . . (Emphasis added.)

As the emphasized words show, there is no

entitlement to file a notice of lis pendens

without a cause of action in a pleading that

affects title to specific real property.

Gale v. Super. Ct., 122 Cal. App. 4th 1388, 1394 (2004).

As the California Supreme Court explained in Kirkeby v.

Super. Ct., 33 Cal. 4th 642, 647 (2004), the question of whether BCN’s

Complaint states a real property claim centers on the adequacy of

BCN’s pleading allegations. In its Complaint, BCN seeks specific

performance of the Cirby/BCN Purchase Agreement. (Compl. ¶¶ 39-43.)1

The Complaint does not allege that Cirby owns the Property, or that

BCN is a third-party beneficiary to the Cirby/Young-Ingemanson

Purchase Agreement. (Compl. ¶¶ 10, 18.)

It is apparent that [BCN’s] insistence on [its]

right to specific performance [in the Complaint

is] premised on the principle that "[a]n

unconditional contract for the sale of land, of

which specific performance would be decreed,

grants [BCN] equitable title, and equity considers

[BCN] the [equitable] owner.”

Rogers v. Davis, 28 Cal. App. 4th 1215, 1222 (1994)(citing ParrRichmond Indus. Corp. v. Boyd, 43 Cal. 2d 157, 166 (1954)). But

neither the Cirby/Young-Ingemanson Purchase Agreement nor the

Cirby/BCN Purchase Agreement is an unconditional contract to sell the

Property. “An obligation is conditional, when the rights or duties of

any party thereto depend upon the occurrence of an uncertain event.” 

Cal. Civ. Code § 1434. The Cirby/Young-Ingemanson Purchase Agreement

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28 2 Because of this ruling, Cirby’s motion need not be

decided and is deemed withdrawn.

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is “expressly conditioned upon” Cirby’s approval of the Property. 

(Compl. ¶ 11, Exh. 1 § 4.2.1.) Furthermore, the Cirby/BCN Purchase

Agreement states, “Seller’s obligation to sell the Property to

Purchaser, and Purchaser’s right to purchase the Property from Seller,

are each subject to, and conditioned upon, Seller’s purchase of the

Property prior to the Closing Deadline, or the Extended Closing

Deadline.” (Compl. ¶ 12, Exh. 2 § 6.01.3). The Complaint does not

allege that either condition has been satisfied or waived. Because of

the contingent nature of the conditional purchase agreements for the

Property, the allegations in BCN’s Complaint are insufficient to state

a claim affecting “title to, or the right to possession of, [the

Property].” Cal. Civ. Proc. Code § 405.4(a).

Therefore, Young-Ingemanson’s motion to expunge the lis

pendens is granted.2

II. Attorneys’ Fees

Young-Ingemanson also moves for attorneys’ fees pursuant to

California Civil Procedure Code section 405.38. Under section 405.38,

Young-Ingemanson is entitled to recover attorney fees unless BCN

“acted with substantial justification or . . . other circumstances

make the imposition of attorney’s fees and costs unjust.” Id.

§ 405.38. Since BCN failed to plead an enforceable equitable interest

in the Property against Young-Ingemanson, BCN was not justified in

clouding title to Young-Ingemanson’s Property. See BGJ Assocs. v.

Super. Ct., 75 Cal. App. 4th 952, 969 (1999) (noting that the

recording of a lis pendens “places a cloud upon the title of real

property”). 

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Therefore, Young-Ingemanson’s request for reasonable

attorneys’ fees incurred in connection with its motion to expunge lis

pendens is granted.

IT IS SO ORDERED.

Dated: June 24, 2005

/s/ Garland E. Burrell, Jr.

GARLAND E. BURRELL, JR.

United States District Judge

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