Friday, July 19, 2019

FYI: 8th Cir Affirms Cancellation of Lis Pendens Due to Imprecise Property Description and Prayer for Relief

The U.S. Court of Appeals for the Eighth Circuit recently affirmed a trial court's order canceling a lis pendens, finding that the description of the property at issue in the lis pendens was imprecise and did not connect to any particular request for equitable relief as required under Missouri law. 


A copy of the opinion is available at:  Link to Opinion


The plaintiff lender ("Plaintiff") extended a $1.9 million loan ("Loan") to an entity that then made alleged fraudulent transfers of the loan proceeds to the defendant company ("Defendant"). Defendant used the fraudulently transferred Loan proceeds to purchase approximately 23.82 acres of real estate in Missouri (the "Property").


Plaintiff filed the instant action, and separately recorded a lis pendens against "Lot 2" of the Property (the "Lis Pendens"). 


Defendant filed a motion to cancel the Lis Pendens (the "Motion") arguing it was invalid under Missouri law. The trial court granted Defendant's Motion finding that the complaint "did not specifically request equitable relief, and instead seeks 'actual and exemplary damages' and 'any other relief the court deems appropriate.'"


Plaintiff appealed the trial court's order canceling the Lis Pendens.


As you may recall, "[f]or a lis pendens to have prospective effect, the judgment contemplated must adjudicate an equitable right, claim or lien, affecting or designed to affect [the] real estate in question."  Space Planners Architects, Inc. v. Frontier Town-Mo., Inc., 107 S.W.3d 398, 407 (Mo. Ct. App. 2003); see also, Mo. Rev. Stat. § 527.260. 


On appeal, Plaintiff argued the Lis Pendens was proper because the complaint sought equitable remedies such as "attachment of [D]efendants' assets and [the] appointment of a receiver."  The Eighth Circuit disagreed, finding that Plaintiff's complaint failed to "identify any specific property…as to which equitable relief is sought."  See e.g., Space Planners Architects, Inc. v. Frontier Town-Mo., Inc., 107 S.W.3d 398, 407 (Mo. Ct. App. 2003).


The Eighth Circuit noted that the complaint's description of the Property failed to: (1) specify whether it encompassed "Lot 2" as mentioned in the Lis Pendens; and (2) "connect the Property to any particular request for equitable relief." 


In light of the above, the Eighth Circuit held that the trial court acted within its discretion in canceling the Lis Pendens. 


Accordingly, the Eighth Circuit affirmed the trial court's order canceling the Lis Pendens.   





Ralph T. Wutscher
Maurice Wutscher LLP
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