Motion to Discharge/Cancel Lis Pendens in Delaware

Background

“The doctrine of lis pendens, which in Latin literally translates to ‘a pending lawsuit,’ is an equitable principle that puts potential buyers of real property on constructive notice that a dispute before the court may affect title to the property.” (See Hindin v. Eaglebank, Corp., C.A. No. 9272-ML, at *8 (Del. Ch. Mar. 23, 2015).)

“The doctrine of lis pendens refers to the power or control which a court acquires over property which is involved in a suit or proceeding during the pendency of the action and until final judgment.” (See Cannelongo v. Fidelity Am. Small Bus (1988) 540 A.2d 435, 438.)

“The essential features of the doctrine are the imparting of constructive notice and the consequent effect of such notice upon persons who acquire an interest in property that is the subject of judicial consideration.” (See Wilgus v. Salt Pond Inv. Co. (1985) Del. Ch., 498 A.2d 151, 158 (1985); Cannelongo v. Fidelity Am. Small Bus (1988) 540 A.2d 435, 438.)

“The doctrine does not establish an actual lien on the affected property but merely serves as notice to third parties that any interest acquired during the pendency of the underlying action may be subordinate to the claim in litigation.” (See McCahill v. Roberts (1966) Pa.Supr., 421 Pa. 233, 219 A.2d 306; Cannelongo v. Fidelity Am. Small Bus (1988) 540 A.2d 435, 438.)

General Information for Complaints and Motions

“The law of lis pendens establishes a method by which a party asserting a claim on title to real property in a pending civil action may give constructive notice of that claim to persons acquiring an interest in the property.” (See Bathla v. 913 Mkt., LLC (2018) 200 A.3d 754, 764.)

“A cancellation of lis pendens is governed by 25 Del. C. subsection 1608, which permits the court to direct the Recorder of Deeds to cancel a notice of pendency if the court determines that there is not a probability that final judgment will be entered in favor of the party recording the notice of pendency.” (See River Enterprises v. Tamari Properties, C.A. No. 655-S, at *1 (Del. Ch. Feb. 15, 2005).)

“The party recording the notice of pendency shall bear the burden of establishing such probability.” (See id.)

“The filing of the action is itself sufficient constructive notice of the claimed interest in the subject real property and a separate recording of the notice of litigation is superfluous.” (See Cannelongo v. Fidelity Am. Small Bus (1988) 540 A.2d 435, 438.)

“It is a fundamental requirement of the application of lis pendens that the underlying litigation concern a specific property interest which will be affected by the outcome of the suit.” (See id.)

“While its application is not limited to questions of title, there must be at issue a claim of equitable estate, interest or right or the enforcement of a lien, charge or encumbrance in the specific property sought to be charged.” (See General Elec. Credit Corp. v. Winnebago of N.J., Inc. (1977) 149 N.J.Super. 81, 373 A.2d 402, 404; Cannelongo v. Fidelity Am. Small Bus (1988) 540 A.2d 435, 438-39.)

Standard of Review and Burdens of Proof

“Under 25 Del. C. subsection 1608, the Court may cancel a notice of pendency at its discretion if it determines that there is not a probability that a final judgment will be entered in favor of the party recording the notice of pendency.” (See Hindin v. Eaglebank, Corp., C.A. No. 9272-ML, at *8 (Del. Ch. Mar. 23, 2015).)

“The application of the doctrine of lis pendens is controlled by common law principles unless enlarged by statute.” (See Cannelongo v. Fidelity Am. Small Bus (1988) 540 A.2d 435, 439.)

“In Delaware, the only statutory reference to lis pendens relates to the authority of the Court of Chancery to enjoin certain ‘social vices’ as nuisances." (See id.)

“Since the doctrine is most often applied in disputes over interests in real property it has evolved as a tool of equity jurisprudence and is wholly subject to equitable principles.” (See Dorsch v. Jenkins (1976) Pa.Super., 243 Pa. Super. 300, 365 A.2d 861; Cannelongo v. Fidelity Am. Small Bus (1988) 540 A.2d 435, 439.)

“As noted, lis pendens is a doctrine or principle of equitable notice, not a separate proceeding activated through a writ.” (See Cannelongo v. Fidelity Am. Small Bus (1988) 540 A.2d 435, 439.)

“The remedy of specific performance of contracts for the sale of land is a matter squarely within this court's discretion.” (See Kowal v. Clark, C.A. No. 18001, at *1 (Del. Ch. June 2, 2000).)

The Court’s Decisions

It is well settled that Superior Court Civil Rule 64(a) provides that “at the commencement of and during the course of an action, all remedies providing for seizure of person or property for the purpose of compelling appearance or securing satisfaction of a judgment ultimately to be entered in the action are available under the circumstances and in the manner provided by the statute.” (See Cannelongo v. Fidelity Am. Small Bus (1988) 540 A.2d 435, 439 n.2.)

It is also well settled that pursuant to 10 Del. C. subsection 3512, “the Superior Court may make all necessary rules respecting the form of the process, the manner of issuance and return thereof, modes of proof, manner of seizure of property, sale of perishable property, appointment and duties of auditors, the release of property from attachment and sale of property so seized, and all other matters relating to attachment proceeding.” (See id.)