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Park 100 Investment Group II v. Ryan

December 23, 2009

PARK 100 INVESTMENT GROUP II, ETC., PLAINTIFF AND RESPONDENT,
v.
GREGORY R. RYAN ET AL., DEFENDANTS AND APPELLANTS.



APPEAL from an order of the Superior Court of Los Angeles County, Charles C. Lee, Judge. Reversed. (Los Angeles County Super. Ct. No. BC385309).

The opinion of the court was delivered by: Aldrich, J.

CERTIFIED FOR PARTIAL PUBLICATION*fn1

I. INTRODUCTION

The defendants in this case are attorneys who, in the course of representing a real property owner in a prior lawsuit involving an easement dispute, filed a lis pendens on a dominant tenement. The owners of the dominant tenement turned around and, in the present case, sued the attorneys claiming the lis pendens was wrongfully recorded. The attorneys appeal from the denial of their anti-SLAPP motion (Code Civ. Proc., § 425.16).*fn2

In the published portions of this opinion, we hold that it is proper to record a notice of pendency of action, commonly called a lis pendens, on a dominant tenement when the litigation is an easement dispute. In the unpublished portion of this opinion (part IV, B. 3.), we hold that the attorneys are not foreclosed by the doctrine of collateral estoppel from addressing the validity of the lis pendens. We reverse the trial court's order denying the attorneys' anti-SLAPP motion and direct the court to enter an order granting the motion.

II. FACTUAL AND PROCEDURAL BACKGROUND

A. Underlying Facts

The Oviatt Building is a historic building built on a parcel of real property located at 617 South Olive Street, in downtown Los Angeles (the Oviatt property). The Oviatt property is immediately south of, and adjacent to, the Heron Building located at the corner of Sixth Street and Olive Street at 510 West Sixth Street, Los Angeles. There is an alley between the two buildings. This 15-foot private alleyway lies on the real property upon which the Heron is built (the Heron property).

At the rear of the Oviatt Building, in the alley, is a large, stationary trash compactor as well as a number of large trash receptacles that serve the building and its tenants. By virtue of the manner in which the Oviatt Building was permitted to be constructed, there is nowhere else to place the trash receptacles or the compactor other than in the alley. Further, the only way the Oviatt property owners and tenants and the Oviatt Building's waste removal company can access the large trash compactor and receptacles is through the alley. Thus, if the Oviatt Building did not have access to the alley, it could not service the needs of the building and its tenants.

In October 1985, the owners of the two properties entered into a 10-year contract by which the owners of the Oviatt property could use the alley. This easement contract called for a one-time payment of $12,500 and the installation of a gate. It did not require the payment of a monthly fee. Even though the non-exclusive easement stated it was only to be used in the case of an emergency, the Oviatt property owners used the easement for other purposes, including access to the Oviatt Building's trash bins.

The Oviatt property is the dominant tenement as the easement attaches to its property. Because the easement burdens the Heron property, it is the servient tenement.*fn3

The Oviatt property owners continued to use the easement after the easement contract expired in October 1995.

In December 2003, plaintiff and respondent Park 100 Investment Group II, a limited liability company (Park 100) purchased the Oviatt property. (Park 100 was formerly known as the Oviatt Investment Group, LLC.) For ease of reference, hereinafter, we refer to Park 100 as Oviatt.

Sixth & Olive, Inc. owns the Heron property. For ease of reference, hereinafter, we refer to 6th & Olive as Heron.

Defendants and appellants are Gregory R. Ryan and Wayne B. Brosman. They are the attorneys who represented Heron in 2005. In June and July 2005, attorney Brosman wrote to Oviatt threatening to deny all access to the alley if a new easement agreement was not agreed upon. The owners of the two properties could not come to a consensus as to the terms of a new easement agreement.

In January 2006, the Oviatt property was marketed for sale. Its estimated value was between $15 and $19 million.

In February 2006, attorney Brosman wrote to Oviatt requesting payment of $116,000 for the use of the alley from May 1996 through February 2006, and the payment of $1,000 per month beginning in March 2006. Attorney Brosman mailed a copy of the letter to the listing broker who was handling the sale of the Oviatt property.

Oviatt received several offers. In February 2006, Oviatt entered into negotiations with JMF Development for the sale of the property for $16.9 million. By March 2006, Oviatt and JMF Development had agreed to a purchase and sale agreement.

In March 2006, Oviatt rejected attorney Brosman's demand to enter into a new easement agreement. Oviatt informed attorney Brosman by email that it had the right to use the easement pursuant to a prescriptive easement and pursuant to a covenant running with the Heron building's land, recorded in 1985. Oviatt also notified attorney Brosman that the Oviatt property was on the market, and warned that there could be liability if Heron falsely stated that Oviatt could not use the alley.

B. The Quiet title Action (Case No. BC349120)

1. The Complaint, Lis Pendens, and Expungement of the Lis Pendens

It appears that in March 2006, Heron prevented Oviatt from using the alley to access its trash receptacles and compactor.

On March 16, 2006, attorneys Ryan and Brosman filed a verified complaint in Case No. BC349120 to quiet title on behalf of Heron against Oviatt.*fn4 In its one cause of action to quiet title, Heron sought to establish that there was no easement on its property "except for an easement for pedestrian egress from a fire escape at the rear of the Oviatt Building, for emergency fire, life or safety circumstances."

On March 20, 2006, attorneys Ryan and Brosman recorded a notice of pending action (a lis pendens) against both properties.

Two days later, on March 22, 2006, JMF Development notified Oviatt by email that it was withdrawing from the sales agreement because "1. The ongoing litigation of the Heron and the filing of the Lis [Pendens] could potentially drag out a closing date which would not work in terms of my acquisition criteria. [¶] 2. I was unaware that there was no [conditional use permit] for the rooftop Space and the [absence] of the rooftop income would be detrimental to the business model. [¶] [T]hese two unforeseen issues make the purchase [too] risky."

On May 5, 2006, Oviatt filed a verified cross-complaint and filed a lis pendens only with regard to the Heron property.

On May 30, 2006, Oviatt filed a motion to expunge the lis pendens that had been recorded on its property. Among other grounds, Oviatt alleged that the quiet title action did not involve title or the right to the Oviatt property (the dominant tenement).

At the hearing on the motion to expunge, both counsel informed the trial court that there was no legal authority addressing whether a lis pendens could reference the dominant tenement in an easement dispute.

In a June 21, 2006 four-page ruling, the Honorable Rolf M. Treu granted the motion to expunge concluding the litigation did not involve title or possession of the Oviatt property, and hence, there was no real property claim justifying a lis pendens on that property. Judge Treu determined it would suspend any award of attorney fees and costs, pending further action. On June 26, 2006, Judge Treu entered an order expunging the lis pendens that had been recorded against the Oviatt property.

On August 4, 2006, Oviatt amended its previously filed verified cross-complaint that still sought to quiet title in the claimed prescriptive easement. The cross-complaint also alleged causes of action for intentional interference with economic advantage and slander of title based on the allegation that the filing of the lis pendens on its property was wrongful and caused Oviatt to lose the sale of its property. Oviatt further alleged that the lis ...


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