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Legal Memorandum: Notice of Pendency of Action

Issue: Under California law, is there a good faith requirement for the filing of a ‘notice of pendency of action’?

Area of Law: Litigation & Procedure, Real Estate Law
Keywords: Notice of pendency of action; Good faith requirement; Real property claim
Jurisdiction: California
Cited Cases: 75 Cal. App. 4
Cited Statutes: None
Date: 03/01/2007

The court of appeal has observed that although the lis pendens statute was intended to protect third parties, “the practical effect of a recorded lis pendens is to render a defendant’s property unmarketable and unsuitable as security for a loan.”  La Paglia v. Super. Ct. (1989) 215 Cal. App. 3d 1322, 1326 [264 Cal. Rptr. 63, 66], abrogated on other grounds, Lewis v. Super. Ct. (1999) 19 Cal. 4th 1232 [970 P.2d 872, 82 Cal. Rptr. 2d 85].  After a lis pendens has been filed,

[t]he 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. at 1326-27 [264 Cal. Rptr. at 66] (citations omitted).  See Askari v. R & R Land Co. (1986) 179 Cal. App. 3d 1101, 1109 [225 Cal. Rptr. 285, 291] (lis pendens may in some cases be the subject of a malicious prosecution action).  Until the conclusion of the litigation or the expungement of the lis pendens, title to the property is clouded, preventing transfer of the property.  See Burger v. Superior Court (1984) 151 Cal. App. 3d 1013, 1018 [199 Cal. […]

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