California Supreme And Appellate Court
Case Summaries
Dispute Resolution And Arbitration

DISPUTE RESOLUTION & ARBITRATION

Manhattan Loft, LLC v. Mercury Liquors, Inc.

This appeal arises out of a storied real estate transaction.  Plaintiff and appellant Manhattan Loft, LLC (appellant) purchased certain real property from Sixth & Spring, LLC, subject to an existing lease for a portion of the basement and first floor to Mercury Liquors, Inc. (Mercury).  A dispute arose, prompting those with an interest in the lease[1] to commence two arbitration proceedings against appellant.  In connection with the arbitration proceedings, the client respondents, through their counsel, respondents Alschuler Grossman Stein & Kahan and Bingham McCutchen (collectively the attorney respondents), recorded two notices of pending actions against the subject property.

            Following the client respondents’ favorable arbitration award, appellant filed suit against respondents for slander of title, claiming that they erred in filing the notices of pending action.  Respondents filed a special motion to strike appellant’s complaint pursuant to Code of Civil Procedure section 425.16, [2] California’s anti-SLAPP statute. [3]  The trial court granted respondents’ motion, and appellant appeals, presenting us with the following legal question:  Can a party to a pending arbitration record a notice of pendency of action without first filing a civil action in Superior Court?

            We conclude that the answer is no.  Looking to the plain language of title 4.5 of the Code of Civil Procedure, a lis pendens may only be filed when an action in a court of law is pending.  Because no such action was pending at the time respondents filed the two lis pendens, they improperly recorded the notices of pendency of action.  Respondents’ concomitant arguments are unconvincing.  Accordingly, we reverse the order of the trial court; respondents’ anti-SLAPP motion should have been denied.

Held: Reversed

In a dispute involving a real estate transaction, trial court's grant of defendant's motion to strike under the anti-SLAPP statute is reversed where: 1) plaintiff's slander of title cause of action is subject to the anti-SLAPP statute, and the filing of the notice of lis pendens by defendant arose out of protected activity as they bore a relationship to the arbitration proceedings; and 2) defendant's filing of the lis pendens was not proper as a lis pendens can only to be filed in court in connection with judicial proceedings.
Manhattan Loft v. Mercury Liquors-B211070-5/6/09 CA2/2
Manhattan Loft v. Mercury Liquors-B211070-5/6/09 CA2/2-pdf

California Supreme And Appellate Court Opinions Directory  
Case Summaries Directory