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THE IMPROPER USE OF THE “NOTICE OF PENDENCY OF ACTION” ALSO
03/15/2012

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            A lis pendens is a notice filed on public records against certain real property to give constructive notice to any purchasers or encumbrancers that there is an ongoing court dispute involving the title to the real property or liens on the real property.  It requires no decision or action by the court to file and merely entails filing the document with the court and recording it against the real property at the County Recorder’s Office.

 

            In Nevada, a lis pendens can be filed against the real property of a defendant only in limited circumstances.  Unfortunately, in many civil lawsuits, plaintiffs sometimes file a lis pendens outside of these limited circumstances.  Often it is due to the plaintiff’s attorney having inadequate knowledge about the proper use of a lis pendens or simply the attorney’s failure to properly research the issue.  However, in some instances, it is a calculated ruse used by some attorneys to avoid having to seek and obtain a pre-judgment writ of attachment through the court, which has with it, a stringent requirement of having to post a monetary bond.  The question is under what circumstances is it proper to file a lis pendens?

 

            Under Nevada law, it is fundamental to the recording of a lis pendens that the action involve some legal interest in the challenged real property, such as title disputes or lien foreclosures.  See In re Bradshaw, 315 B.R. 875 (Bkrtcy.D.Nev.2004); see also NRS 14.010 (a party to a civil action “for the foreclosure of a mortgage upon real property or affecting title or possession of real property” may record a lis pendens).  A lis pendens may not be used to obtain a type of pre-judgment writ of attachment which can later be used in the eventual collection of a judgment.  Levinson v. Eighth Judicial District Court in and for the County of Clark, 1109 Nev. 747, 857 P.2d 18, 20-21 (1993).  In other words, if a plaintiff merely has a suit for monetary damages against a defendant, the plaintiff cannot record a lis pendens against that the defendant’s real property to secure payment for any judgment the plaintiff might eventually obtain.  The Nevada Supreme Court has observed that “As a general proposition, lis pendens are not appropriate instruments for use in promoting recoveries in actions for personal or money judgments; rather, their office is to prevent the transfer or loss of real property which is the subject of dispute in the action that provides the basis for the lis pendens.”  Levinson, 857 P.2d at 20.

 

            Although the doctrine of lis pendens may be applied to actions other than foreclosures, its use is restricted to avoid abuse.  Levinson, 857 P.2d 18.  The Levinson Court re-iterated the holding of Burger v. Superior Court of Santa Clara County, 151 Cal.App.3d 1013, 199 Cal.Rptr. 227, 230 (1984), which pointed out the difficulties presented when a lis pendens is improperly utilized:

 

It is one thing to say that there may be a colorable claim against real property and another to conclude that the claim is such as to affect the title or right to possession of the property within the meaning of the lis pendens statute. [The petitioner’s] contention that [the real party in interest] is seeking simply to avoid the complexities of California’s attachment procedure contains the germ of a more general concern.  Lis pendens is one of the few remaining provisional remedies available at its inception without prior notice to the adversary.  Due process is said to be provided for by subsequent notice and an expungement procedure which casts the burden upon the proponent of the lis pendens, but a lis pendens may cause substantial hardship to the property owner before relief can be obtained.  A commentator has expressed reservations as to ... broad endorsement of lis pendens in claimed constructive trust actions on the ground that it tends “to create a right substantially similar to an ex parte prejudgment writ of attachment of the defendant’s assets, a remedy disfavored in California and severely limited because of its due process problems.”  (Cal. Lis Pendens Practice, §2.7, p. 32 (citations omitted)).  Overbroad definition of “an action ... affecting the title or right of possession of real property” would invite abuse of lis pendens.

 

            The bottom line is that if a plaintiff has brought suit against a defendant and the suit is not one for some type of foreclosure on the defendant’s real property or it is not one that directly affects the title to the defendant’s real property, then the filing of a lis pendens is completely improper.  The appropriate remedy is to file a “Motion to Expunge Lis Pendens” as soon as practicable.  A plaintiff improperly filing a lis pendens against a defendant’s real property without the requisite legal basis, could end up subject to sanctions, usually in the form of an award of attorney’s fees to the defendant.  If your real property has been subjected to a lis pendens outside of a foreclosure action or lien action, contact our firm to protect your rights.

 

For more information contact us at office@fdlawlv.com.

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