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Logan v. Resmae Mortgage Corp.

December 23, 2009


The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge


Presently before the Court is a Motion by Defendant ResMae Mortgage Corp. ("Defendant") to expunge the Notice of Action Pending ("Lis Pendens") recorded by Plaintiff Gail Logan ("Plaintiff") against the residence at 1313 Grendel, Sacramento, CA 95833.*fn1 For the reasons set forth below, Defendant's Motion is granted.


Plaintiff entered into a mortgage loan with Defendant on February 8, 2007. Defendant was identified as the lender and First American Title was identified as the trustee. The Deed of Trust identified Mortgage Electronic Registration Systems, Inc. as nominee for the Lender. Plaintiff alleges that she entered into the loan after Matthew Brown, the loan officer for MSB Financial Group, made several promises regarding the affordability of the loan. The Plaintiff claims Brown promised her the "best deal and best interest rates," and if the loan ever became unaffordable "he would simply refinance it."

Plaintiff claims that Brown then fraudulently inflated her income on the loan application. She claims that she was looking for a fixed rate loan with low interest and instead received an adjustable rate loan. She also alleges that she was not given any of the loan documents prior to signing and was only given a few minutes to sign.

Plaintiff eventually failed to make payments, and January 23, 2009 a Notice of Default was filed. On March 31, 2009, Plaintiff mailed to Defendant a Qualified Written Request for information ("QWR"), pursuant to the Real Estate Settlement Procedures Act ("RESPA"). Plaintiff alleges that Defendant never properly responded to her QWR.

Plaintiff subsequently initiated the present lawsuit against Defendant and others on June 18, 2009 for: (1) violation of the Truth in Lending Act ("TILA") (2) violation of the California Rosenthal Fair Debt Collection Practices Act ("RFDCPA"), (3) Negligence, (4) Violation of RESPA, (5) Breach of Fiduciary Duty (6) Fraud, (7) Violation of California Business and Professions Code § 17200 et seq. ("UCL"), (8) Breach of Contract, (9) Breach of Implied Covenant of Good Faith and Fair Dealing, and (10) Wrongful Foreclosure.


"A lis pendens is recorded by someone asserting a real property claim, to give notice that a lawsuit has been filed which may, if that person prevails, affect title to possession of the real property described in the notice." Federal Deposit Ins. Corp. v. Charlton, 17 Cal. App. 4th 1066, 1069 (1993) (citing Cal. Code Civ. Pro. §§ 405.2, 405.4, 405.20). A lis pendens, once filed prevents that property's transfer until the lis pendens is expunged or the litigation is resolved. BGJ Assoc., LLC v. Superior Court of Los Angeles, 75 Cal. App. 4th 952, 966-67 (1999). The lis pendens is expunged if the pleading on which the lis pendens is based does not contain a real property claim or the evidence fails to establish the probable validity of the real property claims. Orange County v. Hongkong and Shanghai Banking Corp. Ltd., 52 F.3d 821, 823-24 (9th Cir. 1995).

To constitute a "real property claim" the cause of action, if meritorious, must affect the right of possession of specific real property or affect the title to the specific real property. Cal. Civ. Pro. § 405.4. The "probable validity" standard means "it is more likely than not that the claimant will obtain a judgment against the defendant on the claim." Id. at § 405.3.


Initially, Plaintiff and Defendant agree that the Second (RFDCPA), Third (Negligence), and Seventh (UCL) Causes of Action are not "real property claims" that affect the right of possession or title to specific real property. Therefore their arguments focus on Plaintiff's seven remaining causes of action.

However, Plaintiff's claims for damages under TILA and damages under RESPA are purely monetary and also do not affect right to possession or title of real property. Neither does Plaintiff's tort claim for breach of fiduciary duty. As such, in evaluating Defendant's Motion to Expunge the Lis Pendens, the Court need only analyze Plaintiff's claims for rescission under TILA, fraud (as it is an action that may lie in either tort or contract), breach of contract, breach of implied covenant of good faith and fair dealing, and wrongful foreclosure. These are claims touching ...

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