Lewis v. Superior Court

Citation. 30 Cal. App. 4th 1850, 37 Cal. Rptr. 2d 63, 1994 Cal. App.

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Citation30 Cal. App. 4th 1850, 37 Cal. Rptr. 2d 63, 1994 Cal. App.

Brief Fact Summary. The Plaintiffs contracted to buy land and paid significant amounts in furtherance of this contract. The Defendants recorded their lis pendens, a notice of lawsuit affecting title, one day after title to the property vested with Plaintiffs. Plaintiffs sued to clear title.

Synopsis of Rule of Law. If a purchaser has already received title by the time a lien is recorded and was not on constructive notice at the time he received title, he is protected.

Points of Law - Legal Principles in this Case for Law Students.

It belies any notion that one can become a fraudulent transferee by accident, or even negligently.

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Facts. Plaintiffs contracted to buy land from the owner and obtained title on February 28th. On February 29th, the Defendants recorded a lis pendens, a notice of lawsuit affecting title, concerning the property obtained by the Plaintiffs. Over the next year, the Plaintiffs spent over a million dollars renovating the property. After these renovations, Defendants commenced a lawsuit with proper service against the Plaintiffs. Plaintiffs sued to clear title to their land. The trial court denied Plaintiff’s motion for summary judgment and they appeal.

Issue. When was the lis pendens considered properly recorded, thus giving notice to purchasers of the land.

Held. Reversed. The lis pendens was not properly recorded until indexed, which occurred the day after the title passed to the Plaintiffs.
Any purchaser without notice who makes a down payment and obligates himself to pay the balance, has every reason to believe that his rights are secure in the property.
Plaintiff had already received title by the time the lis pendens was recorded and was not on constructive notice at the time he received title, thus was a subsequent bona fide purchaser for value.

Discussion. The court discussed the unique nature of property and the specific type of reliance a purchaser has when they expend money for a down payment. The court was able to maneuver around case precedent, which would have directed an opposite result in this case, by citing to this specific reliance and modern trends to protect buyers who had not fully paid for the property, but had put down payment.

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