Monday, August 5, 2013

Filing a Lis Pendens in Nevada.

A lis pendens, in Latin, means "pending lawsuit." In modern usage, it means a notice of a pending lawsuit that is recorded in county real estate records.  It is a public recording against subject real property giving notice to any purchasers of a pending court dispute potentially effecting title. 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 real property only certain circumstances.[1]

The action must involve some legal interest in the challenged real property, such as title disputes or lien foreclosures.  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); In re Bradshaw, 315 B.R. 875 (Bkrtcy.D.Nev.2004).

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, 1109 Nev. 747, 857 P.2d 18, 20-21 (1993).  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. 
As a general proposition, a lis pendens is not an appropriate instrument 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.

When a lis pendens is improperly filed, the remedy is to file a “Motion to Expunge Lis Pendens” Improper filing could result in sanctions, usually in the form of an award of attorney’s fees to the opposing side. 

[1] In some instances, attorneys might file a lis pendens so as 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.  If done so improperly, sanctions may result.

1 comment:

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