SJO Investments, LLC vs. Kipp

— the use of an easement identified in the pleading (other than an easement obtained pursuant to statute by any regulated public utility). (CCP § 405.4)

Because of the potential for abuse and injustice to the property owner, the Legislature has provided statutory procedures (CCP § 405.30 et seq.) by which a lis pendens may be removed (“expunged”). (See Shah v. McMahon (2007) 148 Cal.App.4th 526, 529—lis pendens procedure “provides a means by which a court may dispose of meritless real estate claims at the preliminary stage of a case”.)

A lis pendens will be expunged without a bond if the court finds either: • Plaintiff’s complaint does not contain a “real property claim” (i.e., one affecting title or possession of specific real property or use of an easement, etc.; CCP § 405.4). (CCP § 405.31.) • Or, the claimant “has not established by a preponderance of the evidence the probable validity of the real property claim.” (CCP § 405.32.)

A motion to expunge may be filed “at any time” after the lis pendens is recorded. (CCP § 405.30.)

Unlike most other motions, the burden of proof is on the party opposing the motion to expunge. The lis pendens claimant (plaintiff) bears the burden of establishing the existence of a “real property claim” and that it is “probably valid.” (CCP § 405.32.) Plaintiff thus has the burden of producing sufficient evidence to support a finding that plaintiff will “probably” win at trial.

Merits In the quiet title and specific performance claims in the Complaint, Plaintiff SJO alleges that there is an enforceable Purchase Agreement for the real property located at 26611 Via La Jolla, San Juan Capistrano, CA 92675. The sales price is $2,050,000. (Compl., ¶¶1-12, Ex. A.) Plaintiff alleges that after signing the Purchase Agreement with Mr. Kipp on March 27, 2025, escrow informed Plaintiff that Defendant Kipp was married and that Defendant Badilla had not signed an interspousal transfer deed. Defendant Kipp represented that he had a settlement agreement relating to the marital dissolution; however, the divorce had not yet been finalized. (Compl., ¶15.) Defendant was unable to obtain his wife’s signature, escrow never closed, and Plaintiff filed this lawsuit.

As an initial matter, Plaintiff provides evidence on reply that it “assigned” the real estate at issue in this case to a third-party Credo

American Properties LLC, in an attempt to show damages. (Oots Decl., ¶3, Ex. B.)

Plaintiff argues under a heading titled “SJO’s Assignment of the Purchase Agreement Further Evidences that a Damages Award would be Inadequate” that “SJO has assigned the real estate purchase agreement (Declaration of Scott Oots in support of Opp., ¶ 3, Ex. B)...” (Opp., p. 9:1-7.)

On reply, Defendant argues that Plaintiff lacks standing to enforce a quiet title action as a result of the Assignment.

In response, Plaintiff submitted essentially a sur-reply arguing that the Assignment is for contractual interests in the Property, but not the right to sue or Plaintiff’s interests in the property, despite the assertion in the opposition that it assigned the Purchase Agreement.

Thus, Plaintiff appears to lack standing to bring the real property claims for specific performance and quiet title.

But even if Plaintiff had standing to sue, the Court finds that Plaintiff has not met its burden to show by a preponderance of the evidence the probable validity of the real property claim.

Plaintiff argues in opposition that the Property was Mr. Kipp’s separate property, as he represented during negotiations; therefore, the signature of his wife (to whom he was separated) did not require her signature. (See e.g. Andrade Dev. Co. v. Martin (1982) 138 Cal.App.3d 330, no specific performance or damages were recoverable as to any part of the effort to dispose of the community real property where it was clear that the property in question was community property and the wife did not consent.)

Plaintiff points to the grant deeds to show that the property must have been purchased with separate property funds or inherited by his family. (Opp., p. 10:11-14.) This is speculation.

Plaintiff also points to an email from Mr. Kipp to the Title Insurance company indicating that his wife’s signature was not needed because he bought the home with money from an account that predated his marriage. (Zazzera Decl., Ex. B.) This is despite the fact that Mr. Kipp took purchased the Property in September 2022, taking title as “Corwin J. Kipp, a married man.”

Mr. Kipp testified that he and Susanne paid cash for the Property. During their marriage, Susanne took title to other property in her own name. (Kipp Decl., ¶4, Ex. 1.)

It is not clear to this Court whether the Property was ever adjudicated as separate property by a court, whether the parties made an agreement, or whether the Property is yet to be characterized.

Nevertheless, even assuming that no other signature was required for the Purchase Agreement to be enforceable, Plaintiff has not shown that it complied with its end of the bargain.

Specific performance requires a showing that plaintiff fully and fairly performed all conditions precedent on his or her part according to the obligation. If the plaintiff’s failure is only partial, immaterial, or capable of being fully compensated, specific performance may be compelled on full compensation being made by the plaintiff for the default. (Civ. Code, § 3392.)

Here, the Purchase Agreement required Plaintiff SJO to put the $2,050,000 into escrow and close escrow in 17 days without Badilla signing an interspousal grant deed. Plaintiff has not shown that it complied. Rather, Plaintiff was unable to obtain title insurance and thus declared the deal dead. (Kipp Decl. ¶13). In the contract, time was declared of the essence. Moreover, Plaintiff cites to no clause that indicates a condition precedent involving title insurance.

Further, specific performance of a real property contract is only appropriate where damages are insufficient to compensate one party for another’s refusal to perform. (See BD Inns v. Pooley (1990) 218 Cal.App.3d 289.)

A complaint to quiet title must be verified. (Code Civ. Proc., § 761.020.) A quite title action is also an equitable cause of action and will not be successful is there is an adequate remedy at law. (See e.g. Hovannisian v. City of Fresno (2024) 107 Cal.App.5th 833.)

The Court notes that pursuant to the Assignment Agreement, Plaintiff would be entitled to a $210,000 assignment fee. (Oots Decl., ¶¶3-4). This belies any argument that damages are an inadequate remedy. (See also Compl., ¶9.) Plaintiff’s citation to Real Estate Analytics, LLC v. Vallas (2008) 160 Cal.App.4th 463 is also not persuasive. The property at issue in that case was a 14.13–acre property containing a mobile home park with 147 individual mobile homes and numerous amenities, including a pool, playground, laundry facilities, and a long winding street. (Id. at p. 467.) The property here is a single-family residence. Plaintiff did not intend to reside at the property or make changes to the property; rather, Plaintiff assigned it within 11 days of signing the Purchase Contract with Defendant Kipp.

Attorney’s Fees Attorney’s fees are warranted. A prevailing party on a motion to expunge a lis pendens is entitled to recover reasonable attorney’s fees and costs under CCP § 405.38, unless the judge finds that the other party acted with substantial justification or that other circumstances make the imposition of fees unjust. (Hunting World, Inc. v Superior Court (1994) 22 Cal.App.4th 67, 74; Blackburn v Charnley (2004) 117 Cal.App.4th 758, 768 (award upheld).) A judge is not authorized to award attorney’s fees against the losing party’s attorney rather than the party. (Doyle v Superior Court (1991) 226 Cal.App.3d 1355, 1359.)

Plaintiff is ordered to pay Defense Counsel $17,800 in reasonable attorney’s fees for time spent on this Motion.

Defendant shall serve notice of this Order.

9. 2024-1424513 Defendant Ralphs Grocery Co. dba Ralphs’ motion for summary Brown vs. The adjudication as to the Complaint of Plaintiff Colton Brown is Kroger Co granted.

Defendant’s objection to the declaration of Bruse Lujan is overruled. Defendant’s objection to the entire declaration of Mark Burns is overruled. Defendant’s objection No. 1 to the Burns declaration is overruled and its objection Nos. 2-8 are sustained.

“[F]rom commencement to conclusion, the party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) “A prima facie showing is one that is sufficient to support the position of the party in question.” (Id. at p. 851.) A defendant moving for summary judgment satisfies his or her initial burden by showing that one or more elements of the cause of action cannot be established or that there is a complete defense to the cause of action. (Code Civ.

Proc., § 437c, subd. (p)(2).) The scope of this burden is determined by the allegations of the plaintiff’s complaint. (FPI Development v. Nakashima (1991) 231 Cal.App.3d 367, 381-382 [pleadings serve as the outer measure of materiality in a summary judgment motion]; 580 Folsom Associates v. Prometheus Development Co. (1990) 223 Cal.App.3d 1, 18-19 [defendant only required to defeat allegations reasonably contained in the complaint].)

A cause of action cannot be established if the undisputed facts presented by the defendant prove the contrary of the plaintiff’s allegations as a matter of law. (Brantley v. Pisaro (1996) 42 Cal.App.4th 1591, 1597.) Alternatively, a moving defendant can