By Sam K. Abdulaziz, Abdulaziz, Grossbart & Rudman
This case deals with a lien being placed on real property, (a Lis Pendens) and an anti-SLAPP (Strategic Lawsuit Against Public Participation) Motion. Manhattan Loft, (“Loft”) an LLC, purchased a building with an existing lease of the first floor to Mercury Liquors. Loft was required to provide easements in order to have accessibility. The contract between the parties included an arbitration clause. That means that the parties must have agreed to arbitration of any disputes rather than litigating.
Mercury provided an arbitration demand, which demand included a “failure to provide use of space.”
During the time that arbitration was pending, Mercury recorded a Lis Pendens against the building. A Lis Pendens means that there is “litigation pending” on the property, and that the parties are in litigation and the party that recorded the Lis Pendens is going to try and obtain funds from that property. The Lis Pendens provided a notice of pending proceedings.
Loft then alleged slander of title for improperly recording the Lis Pendesn without going forward in a Civil Action (litigation rather than arbitration).
The trial court agreed with Mercury that a Lis Pendens recording was privileged under the code section dealing with the anti-SLAPP Statute.
The Appellate Court reversed the decision. Civil Code section 425.6 is the law that is relevant, and states that “a party to an action who asserts a real property claim may record a notice of pendency of action in which that real property claim is alleged.” Further, the law protects “acts in furtherance of a person’s rights to petition” written statements in a judicial “or any other official” proceeding. Looking to the plain meaning of the term “action” as used in other statutes.
The court concluded that a Lis Pendens can only be recorded during the time that a state or federal action was pending. Here there is no evidence to warrant that conclusion that a pending arbitration was such an action.
Therefore, Mercury was not protected by this request. The arbitration proceeding did not constitute an action, and because Mercury did not file a civil action prior to recording the Lis Pendens, the notice of pending action was improperly recorded.
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Attorney Sam Abdulaziz of Abdulaziz, Grossbart & Rudman has been practicing construction law for over 30 years. He has written a book called “California Construction Law” which is updated annually. He represents numerous construction trade associations and contractors. He appears at Contractors State License Board meetings and has argued a number of cases before the appellate courts, including the California Supreme Court dealing with the "Pay-If-Paid Clause." Abdulaziz, Grossbart & Rudman provides this information as a service to its friends & clients. The documents are of a general nature and are intended to highlight areas of the subject matter and should not be used as a substitute for legal advice. It is intended to highlight the areas being discussed. This document does not create an attorney-client relationship, or protect any confidential information until a written agreement is signed. You should seek the aid and advice of a competent attorney, accountant and/or other professional instead of relying on the presentation and/or documents. Sam Abdulaziz can be reached at Abdulaziz, Grossbart & Rudman, P.O. Box 15458, North Hollywood, CA 91615-5458; (818) 760-2000, Facsimile (818) 760-3908; or by E-Mail at info@agrlaw.net . On the Internet, visit our Website at www.agrlaw.net
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