Nottebohm et al v. American Home Mortgage Investment Corp. et al

Filing 55

ORDER EXPUNGING LIS PENDENS 41 51 (Illston, Susan) (Filed on 1/21/2015)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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ANDREAS NOTTEBOHM, et al.,

Case No. 14-cv-04047-SI

Plaintiffs,
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v.

ORDER EXPUNGING LIS PENDENS

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United States District Court
Northern District of California

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AMERICAN HOME MORTGAGE
INVESTMENT CORP., et al.,

Re: Dkt. Nos. 41, 51, 53, 54

Defendants.

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Defendants moved for an order expunging the lis pendens recorded against the property at

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issue in this case. Defendants’ motion was scheduled for hearing on January 23, 2015. Pursuant

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to Civil Local Rule 7-1(b), the Court determines that this matter is appropriate for resolution

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without oral argument and VACATES the hearing. For the reasons set forth below, the Court

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GRANTS defendants’ motion to expunge.

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BACKGROUND

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Plaintiffs Tess and Andreas Nottebohm initiated this litigation in state court in March of

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2010, and have since sustained a number of adverse judgments on the merits of their claims. See

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Nottebohm v. Am. Home Mortgage Servicing, Inc., No. A139030, 2014 WL 5035948 (Cal. Ct.

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App. Oct. 9, 2014). Plaintiffs filed the present action in federal court on September 5, 2014.

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Docket No. 1, Complaint. The First Amended Complaint (“FAC”) alleges that defendants made

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certain material misrepresentations to plaintiffs related to the refinance of their home in December

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of 2006. Docket No. 39, FAC.

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On September 29, 2014, Judge Alsup denied plaintiffs’ motion for a temporary restraining

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order (“TRO”) to prohibit defendants from evicting them from their home. Docket No. 19. On

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November 11, 2014, this Court denied plaintiffs second motion for a TRO. Docket No. 50. On

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November 17, 2014, defendant’s filed a motion to dismiss the FAC. Docket No. 41. On December

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10, 2014, defendants filed a motion to expunge the lis pendens that the Nottebohm’s recorded

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against their home. Docket No. 51. On December 30, 2014, plaintiffs filed a notice of voluntary

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dismissal pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(i), Docket No. 53, thereby

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mooting defendant’s motion to dismiss.

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By the present motion, defendants ask the Court to expunge lis pendens subsequent to
plaintiffs’ voluntary dismissal of this action. Docket Nos. 51, 54.

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DISCUSSION

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United States District Court
Northern District of California

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Pursuant to California Code of Civil Procedure § 405.20, “[a] party to an action who

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

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real property claim is alleged.” The purpose of a lis pendens notice is to provide constructive

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notice of a pending claim that may affect title or right to possession of the real property described

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in the lis pendens notice. See La Paglia v. Super. Ct., 264 Cal. Rptr. 63, 66 (Cal. Ct. App. 1989).

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The principal purpose of the lis pendens statute is to protect third parties who might acquire an

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interest in real property subject to a suit that might affect their interest. See id. A lis pendens

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notice protects the plaintiff only to the extent that it precludes a future interest holder from

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claiming lack of notice.

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While the lis pendens statute was designed to give notice to third
parties and not to aid plaintiffs in pursuing claims, the practical
effect of a recorded lis pendens is to render a defendant’s property
unmarketable and unsuitable as security for a loan. The financial
pressure exerted on the property owner may be considerable, forcing
him to settle not due to the merits of the suit but to rid himself of the
cloud upon his title. The potential for abuse is obvious. In light of
its history as a device designed to protect third parties rather than
provide plaintiffs with an unfair advantage in litigation, courts have
restricted rather than broadened application of this potentially
devastating pretrial remedy.
Id. (citations omitted).

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The party who recorded the notice of lis pendens bears the burden of proof in opposing a

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motion to expunge. Cal. Code Civ. Proc. § 405.30; see also § 405.32 (“[T]he court shall order that
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the notice be expunged if the court finds that the claimant has not established by a preponderance

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of the evidence the probable validity of the real property claim.”).

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Based upon the record before the Court, the Court finds it appropriate to grant defendants’

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motion to expunge the lis pendens. Plaintiffs have not opposed the motion, and therefore have not

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met their burden to show why the lis pendens should not be expunged. In any event their voluntary

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dismissal of this action precludes any argument of “probable validity” of their claims.

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Accordingly, the Court hereby GRANTS defendants’ motion to expunge the lis pendens.

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The lis pendens recorded against real property located at 90 Sidney Court, San Rafael, CA that

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was recorded on October 6, 2014 in the Marin County Recorder as Document No. 2014-0041321

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is hereby expunged. This order resolves Docket Nos. 41 and 51.

United States District Court
Northern District of California

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IT IS SO ORDERED.
Dated: January 21, 2015
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SUSAN ILLSTON
United States District Judge

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