Nacimiento Water Company, Inc. v. International Fidelity Insurance Co. et al, No. 2:2013cv07959 - Document 70 (C.D. Cal. 2014)
Court Description: ORDER GRANTING Cross-Defendant Oak Shores SPE, LLC MOTION TO EXPUNGE LIS PENDENS 54 . Oak Shores request for attorney fees is DENIED by Judge Dean D. Pregerson. (lc). Modified on 11/4/2014. (lc).
Download PDF
<![CDATA[
Nacimiento Water Company, Inc. v. International Fidelity Insurance Co. et al Doc. 70 1 2 O 3 4 NO JS-6 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 NACIMIENTO WATER COMPANY, INC., 12 Plaintiff, 13 v. 14 15 INTERNATIONAL FIDELITY INSURANCE CO. A New Jersey Corporation, 16 Defendant. 17 ___________________________ ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. CV 13-07959 DDP (MRWx) ORDER GRANTING MOTION TO EXPUNGE LIS PENDENS [Dkt. 54] 18 19 Presently before the court is Cross-Defendant Oak Shores SPE, 20 LLC’s Motion to Expunge Lis Pendens. 21 submissions of the parties and heard oral argument, the court 22 grants the motion and adopts the following order. Having considered the 23 I. Background1 24 In 2003, Jonatkim Enterprises, the developer of a residential 25 subdivision in San Luis Obispo County, entered into a contract with 26 Plaintiff Nacimiento Water Company (“the Water Company”). Under 27 28 1 The facts herein are drawn from the Complaint and from the Second Amended Counterclaim and Cross Complaint. Dockets.Justia.com 1 the contract (the “Water Contract”), the Water Company agreed to 2 provide water service to the residential lots in exchange for 3 payment of $5,000 per lot, to be paid within four years of the 4 recordation of the subdivision’s final tract map. 5 also required the issuance of a $500,000 performance bond, which 6 was issued by International Fidelity Insurance Company (“IFIC”) on 7 the developer’s behalf. The contract 8 Developer Jonatkim made a partial payment to the Water 9 Company, but then transferred its interest in the subdivision to 10 John and Carol King (“the Kings”). 11 Jonatkim’s obligations under the Water Contract, and obtained a 12 surety bond from IFIC similar to that originally issued to 13 Jonatkim. 14 connected to the bond and agreed to assign to IFIC, in the event of 15 a breach, all of their rights in the Water Contract. 16 lender eventually foreclosed on the property, which was then 17 obtained at a foreclosure sale by Movant Oak Shores SPE, LLC (“Oak 18 Shores”).2 19 The Kings also assumed The Kings also agreed to indemnify IFIC for any losses The mortgage In 2010, the Water Company notified IFIC that Jontakim and its 20 successors had defaulted on the Water Contract. 21 therefore demanded $305,000 pursuant to the IFIC performance bond. 22 IFIC did not pay the Water Company, which then filed the instant 23 suit to recover under the bond.3 The Water Company 24 25 26 27 28 2 Oak Shores did not acquire the property until December 2013, after the filing of the Water Company’s Complaint and IFIC’s CrossClaim. 3 IFIC alleges that the amount at issue is $310,000. 2 1 IFIC filed a counterclaim and cross claim against the Water 2 Company, Jonatkim, the Kings, and Oak Shores. 3 subrogation rights to collect the $5,000 per lot, also filed a 4 notice of lis pendens regarding the subdivision.4 5 moves to expunge the lis pendens. 6 II. 7 IFIC, claiming Oak Shores now Legal Standard Lis pendens matters are governed by state law. 28 U.S.C. § 8 1964. 9 real property claim may record a notice of pendency of action in Under California law, “[a] party to an action who asserts a 10 which that real property claim is alleged.” 11 405.20. 12 the property’s transfer until the litigation is resolved or the lis 13 pendens is expunged.” 14 Cal.App. 4th 952, 967 (1999). Cal. Code Civ. P. § A lis pendens “clouds the title and effectively prevents BGC Assocs. LLC v. Superior Court, 75 15 Any party to an action, or nonparty with an interest in the 16 real property affected by the lis pendens, may move to expunge a 17 lis pendens. 18 motion to expunge if (1) “the pleading on which the notice is based 19 does not contain a real property claim,” or (2) “the claimant has 20 not established by a preponderance of the evidence the probable 21 validity of the real property claim.” 22 405.32.. 23 /// 24 /// 25 /// Cal. Code Civ. P. § 405.30. The court must grant a Cal. Code Civ. P. §§ 405.31, 26 4 27 28 IFIC’s Second Amended Counterclaim and Crossclaim alleges that IFIC shall have the right to recover under the water contract if it makes any payment to the Water Company. IFIC does not allege that it has made any such payment. 3 1 III. Discussion 2 A. Expungement 3 Oak Shores contends that IFIC has not brought any real 4 property claims. 5 motion to expunge, to show the existence of a real property claim. 6 Kirkeby, 33 Cal.4th 642, 647 (2004). 7 Procedure defines a “real property claim” as “the cause or causes 8 of action in a pleading which would, if meritorious, affect (a) 9 title to, or the right to possession of, specific real property or It is IFIC’s burden, as the party opposing the The California Code of Civil 10 (b) the use of an easement identified in the pleading, other than 11 an easement obtained pursuant to statute by any regulated public 12 utility.” 13 Cal. Code. Civ. P. § 405.4. IFIC argues, conclusorily, that “[i]t is plain that the IFIC’s 14 claim affects real property.” 15 that because the Water Contract allows the Water Company to refuse 16 to provide water to the subdivision, and that refusal would 17 “impos[] restrictions on the use and subdivision of the real 18 property in issue,” IFIC has brought a “real property claim.” 19 is unclear to the court, however, how a service contract such as 20 the Water Contract has any bearing on title to the property or the 21 right to possession of the property. 22 would likely reduce the value of the property, lack of water in and 23 of itself does not affect title to or right to possession of a 24 property. 25 (Opposition at 10:1.) IFIC suggests It While lack of water service The cases cited by IFIC are inapposite. Cornbleth v. Allen, 26 in which a notice of lis pendens was not at issue, held that an 27 agreement limiting the uses of a property and providing for a 28 reversionary interest was an instrument affecting title. 4 Cornbleth 1 v. Allen, 80 Cal.App. 459, 463 (1926). In Barbieri v. Ongaro, 2 another case not involving a lis pendens, the court held that a 3 restrictive covenant running with the land affected real title, and 4 was recordable. 5 (1962); See also Alfaro v. Cmty. Hous. Improvement Sys. & Planning 6 Ass’n, Inc., 171 Cal.App.4th 1356, 1372-3 (2009). 7 appears to suggest that lack of water service would limit the uses 8 of the property at issue here, that practical limitation is not 9 analogous to the restrictive covenants at issue in the cases IFIC Barbieri v. Ongardo, 208 Cal.App.2d 753, 757 10 cites. 11 While IFIC pendens must be expunged.5 Because IFIC has not brought a real property claim, the lis 12 B. 13 The court must award reasonable attorney’s fees and costs 14 related to a motion to expunge a lis pendens to the prevailing 15 party, unless the other “acted with substantial justification or . 16 . . other circumstances make the imposition of attorney’s fees and 17 costs unjust.” 18 disagrees with IFIC’s contentions, is lis pendens does not appear 19 to have been filed frivolously or in bad faith. 20 request for fees is, therefore, DENIED. Attorney’s Fees Cal. Code Civ. P. § 405.38. Though this court Oak Shores’ 21 22 23 24 /// 25 /// 26 /// 27 5 28 Having so concluded, the court need not reach Oak Shores’ additional arguments. 5 1 2 IV. Conclusion For the reasons stated above, Oak Shores’ Motion to Expunge 3 Lis Pendens is GRANTED. 4 The request for attorney’s fees is DENIED. IT IS SO ORDERED. 5 6 7 Dated: November 4, 2014 8 HON. DEAN D. PREGERSON United States District Judge 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6
]]>
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You
should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
