Motion to Expunge Lis Pendens in Texas

Background

“A lis pendens is a notice of litigation, placed in the real property records, asserting an interest in the property, and notifying third parties that ownership of the property is disputed.” (In re Miller (2014) 433 S.W.3d 82, 84.) “A properly filed lis pendens operates as constructive notice that a specific piece of real property is subject to a pending lawsuit and that any interest acquired by a prospective buyer is subject to the outcome of the pending litigation.” (In re Rescue Concepts, Inc. (2016) 498 S.W.3d 190, 192 citing Tex. Prop. Code Ann. § 13.004(a).) The doctrine is codified in Property Code section 12.007(a):

[D]uring the pendency of an action involving title to real property, the establishment of an interest in real property, or the enforcement of an encumbrance against real property, a party to the action who is seeking affirmative relief may file for record with the county clerk of each county where a part of the property is located a notice that the action is pending.

(Tex. Prop. Code Ann. § 12.007(a) [West 2014[]; see In re Miller, supra, 433 S.W.3d at 84.)

Recourse to Remove Lis Pendens

“In 2009, the Texas Legislature ... amended section 12.0071 of the Texas Property Code to require a trial court to ‘order the notice of lis pendens expunged if the court determines that . . . the claimant fails to establish by a preponderance of the evidence the probable validity of the real property claim.’” (Cohen v. Sandcastle Homes, Inc. (2015) No. 01-13-00267-CV, at *18.)

How to Structure the Motion

A notice of lis pendens may be expunged ... if certain procedures are followed and the trial court determines that the party filing the notice either has not pleaded a real-property claim or has not demonstrated the probable validity of the claim.

The movant must apply to the court to expunge the notice and file evidence, including declarations, with the motion to expunge the notice.

The Court’s Decision

Following the filing, the court may:

1. permit evidence on the motion to be received in the form of oral testimony; and
2. make any orders the court considers just to provide for discovery by a party affected by the motion.

(In re Rescue Concepts, Inc., supra, 498 S.W.3d at 194.)

The court shall order the notice of lis pendens expunged if the court determines that:

1. the pleading on which the notice is based does not contain a real property claim;
2. the claimant fails to establish by a preponderance of the evidence the probable validity of the real property claim; or
3. the person who filed the notice for record did not serve a copy of the notice on each party entitled to a copy under Section 12.007(d)....

(Tex. Prop. Code Ann. § 12.0071(a)–(c).)

Where movant “argues that the prematurely filed notice of lis pendens prevented them from selling the property ... the doctrine of lis pendens does not void a conveyance of the property during pendency of the suit; the interest of the grantor merely passes subject to it.” House of Praise Ministries, Inc. v. City of Red Oak (2020) No. 10-19-00195-CV, at *7 citing Cherokee Water Co. v. Advance Oil & Gas Co. (1992) 843 S.W.2d 132, 135.) Thus, “a prematurely filed notice of lis pendens violates substantive due process rights.” (House of Praise Ministries, Id.)

Hearing on the Motion

“During the hearing on the motion, the trial court may permit evidence in the form of oral testimony, and the trial court must then “rule on the motion for expunction based on the affidavits and counter-affidavits on file and on any other proof the court allows.” (In re Rescue Concepts, Inc., supra, 498 S.W.3d at 194 citing § 12.0071(b)(1), (e).) After considering the evidence, the trial court must grant the motion for expunction of a lis pendens notice if the claimant failed “to establish by a preponderance of the evidence the probable validity of the real property claim[.]” (Id., citing § 12.0071(c)(2); see also, Nat'l City Bank of Ind. v. Ortiz (2013) 401 S.W.3d 867, 887.)

Mandamus as Relief for Denial of Motion to Expunge

“Mandamus has been recognized as the appropriate remedy when issues have arisen concerning the issuance of notices of lis pendens.” (In re Cohen (2011) 340 S.W.3d 889, 900.) Thus, there is no need for a relator to show that it lacks an adequate appellate remedy in the context of a dispute involving a lis pendens. (See Flores v. Haberman (1995) 915 S.W.2d 477, 478.)

Where, “[i]n response to the motion to expunge, the real party did not present any evidence and argued only that it had alleged a real property claim... [t]he trial court denied the motion.” (In re I-10 Poorman Invs., Inc. (2017) 549 S.W.3d 614, 617 citing to In re Rescue Concepts, Inc. (2016) 498 S.W.3d at 192-194.) “[T]he Court granted mandamus relief because the real party had presented no evidence in its response to the motion to expunge and therefore, failed to meet its evidentiary burden of establishing by a preponderance of the evidence the probable validity of its real property claim.” (Id.)

Relief from Denial After Final Judgment

Where final judgment has been entered and a notice of appeal has been filed, and the trial court's plenary power has expired by the time movant files its mandamus petition ...all of the trial court's interlocutory rulings, including its denials of the motions to expunge the lis pendens, merge into the final judgment and become appealable. (In re Moody National Kirby Houston S, LLC (2013) 412 S.W.3d 570, 571 citing e.g., Roccaforte v. Jefferson Cnty. (2011) 341 S.W.3d 919, 924; Webb v. Jorns (1972) 488 S.W.2d 407, 408–09 [holding that interlocutory judgment merged into final judgment, which was then appealable]; see also CenterPoint Energy Hous. Elec. LLC v. Bluebonnet Drive, Ltd. (2008) 264 S.W.3d 381, 387 n. 4.)