285 P.3d 733
Or. Ct. App.2012Background
- Plaintiff recorded a notice of pendency of an action (lis pendens) after suing Kine and Stonecrest alleging breach of a September 2009 agreement to jointly purchase property from Umpqua Bank.
- Agreement provided 50/50 funding and profits, with a new LLC to be formed to purchase the property and a confidentiality clause.
- At the time of the agreement neither plaintiff nor Kine held an interest in the property, and there was no binding land-sale contract.
- Plaintiff sought damages or specific/performance, and on the same day filed the lis pendens claiming the action would compel conveyance of a 50% interest in the property.
- Stonecrest moved to strike the lis pendens under ORS 205.460, arguing the notice was an invalid encumbrance; the trial court agreed and released the encumbrance.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the lis pendens constitutes a claim of encumbrance under ORS 205.450–470. | Plaintiff contends the lis pendens is a valid encumbrance authorized by ORS 93.740. | Stonecrest argues the notice is an invalid encumbrance because it is based on a speculative future interest. | The lis pendens is a claim of encumbrance. |
| Whether the lis pendens was a valid encumbrance under ORS 205.450(8). | Plaintiff argues it was authorized by statute (ORS 93.740) and thus valid. | Stonecrest contends the underlying suit does not involve a real property interest and thus is not a valid encumbrance. | The claim was invalid because the underlying suit did not involve an interest in real property. |
Key Cases Cited
- Doughty v. Birkholtz, 156 Or App 89 (1998) (lis pendens requires an actual real-property interest)
- Hoyt v. American Traders, Inc., 301 Or 599 (1986) (notice gives priority over later liens but requires real-property interest)
- Pedro v. Kipp, 85 Or App 44 (1987) (notice binds subsequent interests once filed)
- Miller v. C. C. Meisel Co., Inc., 183 Or App 148 (2002) (lis pendens does not create slander of title absent falsehood)
- Kazlauskas v. Emmert, 248 Or App 555 (2012) (specific performance available when monetary damages inadequate)