Nobles v. Kern
- Beth Freeman
- 5:19-cv-07362
- U.S. District Court · Northern District of California
- 6
In Nobles v. Kern, Judge Freeman granted defendants’ motion to remove a property notice because the contract suit sought money, not rights to the property.
Kathleen Nobles lost the recorded notice protecting her claimed ability to use the Carmel Property to collect the alleged contract debt. Fred M. Kern and Plum Holdings, LLC obtained the order removing that notice; the opinion does not resolve the underlying breach-of-contract claims.
What happened
In Kathleen Nobles v. Fred M. Kern, et al., Nobles sued over an unpaid promissory note and recorded a notice concerning the Carmel Property while seeking payment from the defendants.
The court ruled that the notice was not allowed because Nobles claimed money from the property’s sale, rather than ownership or possession of the property. The court therefore granted the defendants’ motion to expunge the notice.
Judge Beth Labson Freeman concluded that the breach-of-contract lawsuit did not affect the property rights required for such a notice under California law.
The detailed version
- Nobles v. Kern · No. 5:19-cv-07362
- Beth Freeman
- July 9, 2020
Background
Kathleen Nobles sued Fred M. Kern and Plum Holdings, LLC, alleging breach of contract. The dispute arose from an agreement under which Kern assumed obligations on a $1.5 million promissory note payable to Nobles in connection with his purchase of membership interests in Plum Holdings. The agreement required payments of principal and interest and provided for a final payment, with an option to extend the term. The opinion states that Kern made some payments but made no further payments after June 2017.
Nobles recorded a notice of pending litigation, commonly called a lis pendens, concerning the Carmel Property. A lis pendens gives notice that a lawsuit may affect ownership or possession of specified real property. Defendants moved to expunge, or remove, the notice. Nobles argued that the agreement required Kern and Plum Holdings to sell the Carmel Property and use the proceeds to pay her.
Legal standard
Applying California law, the court explained that a lis pendens is proper only when the claimant establishes that the lawsuit affects title to or the right to possess the property and that the real-property claim is probably valid. Allegations involving property only as a way to collect money damages do not support a lis pendens. The court also noted that the remedy is provisional and should be applied narrowly because recording the notice can make property difficult to sell or use as loan security.
Court’s analysis
The court agreed with defendants that Nobles’s complaint was an action for money damages. It described Nobles’s requested relief as an accounting of Plum Holdings’ assets, sale of the Carmel Property and liquidation of other assets, and application of the proceeds toward the amount allegedly owed. The court stated that Nobles sought the unpaid principal of $1,409,740 and did not allege an ownership or possession interest in the Carmel Property.
The court rejected Nobles’s argument that her request for an order requiring the property’s sale made the lawsuit a real-property claim. According to the court, the substance of her claim remained a demand for money from sale proceeds, not a demand for title to or possession of the property. The court also stated that the agreement did not give Nobles a deed of trust or similar recorded protection and that she could not unilaterally change that agreement through this lawsuit.
Disposition
Judge Beth Labson Freeman granted defendants’ Motion to Expunge Lis Pendens at ECF 45. The opinion does not state that the underlying breach-of-contract action was dismissed or otherwise resolved by this order.
Note on the opinion’s dates
The opinion gives inconsistent dates for recording the lis pendens: the background section states January 31, 2020, while an earlier description states February 13, 2020. The motion is described as filed on March 5, 2020, and the order is dated July 9, 2020.
Read the full 6-page opinion on CourtListener, the free public archive maintained by the Free Law Project.