In a victory for Kibler Fowler & Cave’s Cannabis Litigation practice group, the Honorable Irma Asberry of the Riverside County Superior Court ordered expungement of a lis pendens filed against real property owned by client 480 Third Street, LLC, and awarded attorneys’ fees and costs.
The case stems from an investment dispute over a multifaceted cannabis cultivation and retail business. KF&C represents 19 defendants, including 480 Third Street, in defending claims relating to a commercial business partnership. In opposing Defendant 480 Third Street’s Application to Expunge the Lis Pendens and for Attorneys’ Fees, the plaintiffs contended that a lis pendens they recorded against the property was related to the partnership claim, even though the partnership documents provided for no such right.
The Court rejected the plaintiffs’ argument and ruled their lis pendens was procedurally defective for failure to record the lis pendens with a proof of service attached, and substantively defective because the lis pendens was not supported by a “real property claim” pursuant to Code of Civil Procedure section 405.4(a). Specifically, the Court noted that when corporate funds are used to improve a property, but the property itself is owned by a separate corporation, there is no right to a lis pendens. The Court further explained that “Plaintiff has not alleged a valid real property claim, much less establish the probable validity of such claim,” as required by statute. The Court also ruled that the plaintiffs did not demonstrate they acted with substantial justification when recording the lis pendens and, for that reason, awarded the defendants attorneys’ fees and costs.
The Court also granted two out of three motions to quash filed by specially appearing defendants represented by KF&C, ruling that the plaintiffs did not adhere to the requirements of substitute service despite the presence of proofs of service and process-server declarations.
The litigation team is comprised of Partner John Fowler, Counsel Cristyn Chadwick, Associate Zien Halwani (all members of the Cannabis Litigation practice group), Senior Litigation Paralegal Samantha Ahlheim, and Paralegal Praveeta Garcia.
The Court’s decisions can be found here (see items 1 & 2).