Khan v. CitiMortgage, Inc. et al.

Filing 16

ORDER Granting In Part and Denying In Part 9 Defendant's Motion to Expunge Lis Pendens, signed by District Judge Lawrence J. O'Neill on 9/28/15. (Gonzalez, R)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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SALMA H. KHAN;

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Plaintiff,

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Case No. 1:13-CV-01378-LJO-JLT

v.
CITIMORTGAGE, INC.,

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MEMORANDUM ORDER GRANTING IN
PART AND DENYING IN PART
DEFENDANT’S MOTION TO EXPUNGE
LIS PENDENS

Defendant.

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(Doc. 9)

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Before the Court in the above-styled and numbered cause of action is Defendant

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CitiMortgage, Inc.’s “Motion for an Order Expunging the Notice of Pendency of Action Recorded

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by Plaintiff Salma H. Khan,” filed August 4, 2015 (Doc. 9). Plaintiff did not file an Opposition. The

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Court deems the matter appropriate for resolution without oral argument. Fed.R.Civ.P. 78; Local

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Rule 230(g). Having considered the parties’ briefing, the record, and the relevant law, the Court will

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grant in part and deny in part Defendant’s motion.

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I.

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BACKGROUND
Plaintiff Salma H. Khan (“Plaintiff”) commenced this action on July 23, 2013, by filing a

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Complaint in the California Superior Court for the County of Kern against Defendants CitiMortgage,

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Inc. (“CitiMortgage”) and Wilmington Trust Co. (“Defendants”). See Compl., Doc. 1-2. The action

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arises out of an allegedly wrongful foreclosure proceeding relative to the real property at 11622

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Harrington Street, in Bakersfield, within Kern County, California (“the Property”). See Compl.,

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Doc. 1-2. Asserting diversity jurisdiction, Defendants removed to this Court pursuant to 28 U.S.C.

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§§ 1332(a), 1441(b). Defendants moved to dismiss the Complaint, see Doc. 6, and in its September

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2013 2015 Order, the Court granted Defendants’ unopposed motion, dismissing with prejudice all of

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Plaintiffs’ claims. See Doc. 7.

In the instant motion (Doc. 9), filed nearly two years after the Court rendered final judgement

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in 2013, CitiMortgage moves to expunge the notice of lis pendens that Plaintiff recorded on July 26,

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2013 against the Property. See Doc. 11, Tom Decl., Ex. 1. Plaintiff does not oppose the motion, and

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on September 1, 2015, CitiMortgage filed a notice of non-opposition (Doc. 13).
The matter is now ripe for review.

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II.

DISCUSSION

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A. Motion to Expunge Lis Pendens

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Federal courts look to state law when deciding matters involving lis pendens. See 28 U.S.C.

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§ 1964. Under California Code of Civil Procedure § 405.20, “[a] party to an action who asserts a real

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property claim may record a notice of pendency of action, [a lis pendens], in which that real property

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claim is alleged.” The effect of a lis pendens “is that anyone acquiring an interest in the property

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after the action was filed will be bound by the judgment.” BGJ Assocs., LLC v. Superior Court, 75

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Cal. App. 4th 952, 966 (1999). “Once a lis pendens is filed, it clouds the title and effectively

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prevents the property’s transfer until the litigation is resolved or the lis pendens is expunged.” Id. at

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967.

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Under California law, parties at any time in the pendency of the litigation may ask the court

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in which the action is pending to expunge the notice of lis pendens. Cal.Code Civ. Proc. § 405.30. A

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court shall order that the notice be expunged if (1) “the court finds that the pleading on which the

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notice is based does not contain a real property claim”; or (2) “the court finds that the claimant has

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not established by a preponderance of the evidence the probable validity of the real property claim.”

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Id. §§ 405.31-2. “Probable validity” of a claim means that it is more likely than not that a plaintiff

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will obtain a judgment against the defendant. Orange County v. Hongkong and Shanghai Banking

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Corp. Ltd., 52 F.3d 821, 824 (9th Cir. 1995) (citing Cal.Code Civ. Proc. § 405.3). It is a plaintiff’s

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burden to establish probable validity. Cal.Code Civ. Proc. § 405.32.

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Defendant asks the Court to grant its request to expunge the notice of lis pendens. Plaintiff

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does not dispute the motion. As such, and based on the Court’s prior dismissal of the action in its

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entirety, she fails to meet her burden to show by a preponderance of the evidence that any claims are

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“probably viable” for the purposes of the instant motion. Id. (“the court shall order that the notice be
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expunged if the court finds that the claimant has not established by a preponderance of the evidence

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the probable validity of the real property claim. The court shall not order an undertaking to be given

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as a condition of expunging the notice if the court finds the claimant has not established the probable

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validity of the real property claim.”); see also Howard S. Wright Constr. Co. v. Superior Court, 106

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Cal.App.4th 314, 319 (2003) (“A notice of lis pendens may be expunged if the trial court finds that

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the plaintiff-claimant ‘has not established by a preponderance of the evidence the probable validity

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of the real property claim.’”).

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Accordingly, the Court concludes that it must grant the motion to expunge. See Cal.Code
Civ. P. § 405.32.
B. Attorneys’ Fees

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CitiMortgage also moves for attorneys’ fees related to the instant motion. Defense counsel

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filed a declaration indicating that his hourly fee is $250, and that as a result of “having to” file this

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motion, CitiMortgage incurred $650.00 in attorney’s fees based on 2.6 hours researching, drafting

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and preparing the instant motion and related documents. See Doc. 11, Tom Decl. ¶ 7. Counsel also

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estimated that he would spend an additional 2 hours preparing for and appearing at a hearing on this

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motion and suggested that additional hours would be necessary to draft a reply. As neither a reply

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nor a hearing was necessary, the Court disregards any hours expended in those efforts.

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California Code of Civil Procedure section 405.38 provides that the prevailing party on a

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motion to expunge a lis pendens “shall ... be awarded the reasonable attorney’s fees and costs of

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making or opposing the motion unless the court finds that the other party acted with reasonable

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justification or that other circumstances make the imposition of attorney’s fees and costs unjust.”

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Cal.Civ.Proc.Code § 405.38.

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Here, Defendant apparently made no effort to contact Plaintiff to request that she voluntarily

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withdraw the notice. Absent such a showing, the Court finds the motion premature and perhaps

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unnecessary. For the price of a phone call or a stamp Defendant may have been able to avoid adding

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to the Court’s impacted docket. In addition, Plaintiff has long since lost her home to the foreclosure

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proceedings and likely has other significant fallout from the financial difficulties. See O’Connor v.

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Sabadell United Bank, N.A., No. 14-CV-00180-JCS, 2014 WL 3845224, at *2 (N.D. Cal. Aug. 5,
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2014); cf. Bergman v. Bank of Am., No. C-13-00741 JCS, 2013 WL 5863057 at * 34 (N.D.Cal. Oct.

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23, 2013); cf. Edwards v. Aurora Loan Services, LLC, 2011 WL 1668926, at *20 (E.D.Cal. May 2,

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2011) (“Plaintiff has faced economic difficulties involving the foreclosure of her real property, and

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defendant has not convincingly demonstrated that plaintiff acted without substantial justification in

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this litigation or in recording the lis pendens.”). The Court concludes that circumstances render the

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imposition of attorneys’ fees unjust. Cal.Civ.Proc.Code § 405.38.

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III.

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CONCLUSION AND ORDER
For the foregoing reasons, the Court concludes that expunging the lis pendens is appropriate

pursuant to California Code of Civil Procedure § 405.31-32, but that awarding attorneys’ fees would
be unjust under the circumstances, see id § 405.38.
Accordingly, IT IS HEREBY ORDERED that Defendant’s motion to expunge the lis
pendens (Doc. 9) is GRANTED IN PART and DENIED IN PART, as follows:
(1) Plaintiff’s lis pendens related to the Property located at 11622 Harrington Street,

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Bakersfield, in Kern County California, recorded as document number 0213105295 with

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the office of the Kern County Recorder, is hereby ordered expunged from the public

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record; and,

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(2) To the extent that Defendant CitiMortgage, Inc. moves for attorneys’ fees, the motion is
DENIED, pursuant to Cal.Code Civ. Proc § 405.38.

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IT IS SO ORDERED.
Dated:

/s/ Lawrence J. O’Neill

September 28, 2015

UNITED STATES DISTRICT JUDGE

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