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Court Rules Party Cannot Record Lis Pendens In California To Notice Action In Another State

We record a lis pendens (Latin for "action pending") in the county where a lawsuit is filed to put the world on notice that there's a lawsuit pending over the ownership of real property - or at least some dispute over the land.  Say, for example, Bob owns a house in Orange County, California, and you entered into an agreement to buy the house from Bob, and put down a 25% deposit in escrow.  Bob gets cold feet and backs out, but refuses to return your escrow deposit claiming it was an option to purchase, and you were the one that backed out.

Beyond the fact that we have a real mess on our hands, you file a lawsuit in Orange County, California and then elect to record a lis pendens in Orange County to let anyone else know about the dispute, especially Suzy, who is thinking about buying Bob's house.  You sue to force Bob to sell his house to you (an action for specific performance) or, alternatively, the return of your 25% deposit.  So far so good.  You have a dispute over real property, and under California Code of Civil Procedure section 405.20, you're entitled to record the lis pendens. 

Now let's add one little twist to the story.  [This 'little twist" is just like the Socratic method taught in law school]. Let's say that instead you entered into the contract to buy Bob's California house while you were on vacation with Bob in Florida, and you live in Florida.  So instead of filing your lawsuit in California, you file it in Florida. 

To follow the requirements of the lis pendens statute, however, you record the lis pendens in Orange County, California, letting everyone in the world (including Suzy) that you've got a lawsuit pending in Florida.

Still sounds good?

Not so fast there, bucko.  Although Bob's property is in California, your lawsuit is in Florida. So, Bob filed a motion to expunge your lis pendens, and the court granted it. You then appealed, saying, "wait a minute, the statute doesn't say anything about out-of-state actions."  Until a few days ago, no one knew whether you had the right to record your lis pendens in California.  But if you remember the foreshadowing in the headline, you now know you can't.  That's right - you have to file your lawsuit in the same county where you intend to record the lis pendens, not in another state.

Although the Superior Court granted Bob's motion to expunge your lis pendens, however, the Court should not have.  It should have simply struck the Notice of Lis Pendens about the action in Florida. 

One more loophole plugged up.

Posted by J. Craig Williams on Sunday, December 14, 2008

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