The California Court of Appeal recently held that the recording of a lis pendens in connection with a mechanic’s lien foreclosure action is protected by the litigation privilege and cannot support a slander of title claim, even if the underlying lien claim lacked any evidentiary merit. As a practical matter, this holding makes clear that contractors, suppliers and other mechanic’s lien claimants working on private projects should record their mechanic’s liens (and, later, a lis pendens as part of their foreclosure actions) when in doubt about being paid given that their recording of such instruments is an absolutely protected activity that does not give rise to a property owner’s cross-claim for slander of title.
In Alpha & Omega Development, LP v. Whillock Contracting, Inc., 11 C.D.O.S. 13552 (Ct. App., Nov. 2, 2011), a contractor unsuccessfully tried to foreclose on a mechanic’s lien for about $1.5 million owed by the project owner for unpaid work on a condominium project. In connection with its action on the mechanic’s lien, the contractor recorded a lis pendens, which the owner successfully moved to expunge after the trial court determined that the related mechanic’s lien lacked merit.
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