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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 in Enterprise Financial Group, Inc. v. Podhorn is available at:  Link to Opinion.

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

The plaintiff filed the instant action, and separately recorded a lis pendens against “Lot 2” of the property.

The defendant filed a motion to cancel the lis pendens arguing it was invalid under Missouri law. The trial court granted the 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.’”

The 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, the plaintiff argued the lis pendens was proper because the complaint sought equitable remedies such as “attachment of the defendants’ assets and appointment of a receiver.”  The Eighth Circuit disagreed, finding that the 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.

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Patrick Kane practices in Maurice Wutscher’s commercial litigation, consumer credit litigation, insurance recovery and advisory, intellectual property litigation, and equine law practice groups. Patrick has substantial experience in a variety of civil matters including business litigation, insurance recovery, foreclosure litigation, wrongful death, product liability, general tort litigation and general liability defense. Among other achievements, he has served as first chair in a five-day jury trial and as second chair during a weeklong arbitration. In 2012, the San Diego Daily Transcript named him a “Young Attorney of the Year.” Patrick's equine practice focuses on the representation of industry participants at administrative hearing and appeals, purchase and sale agreements, partnership and limited liability creation, gaming law, regulatory matters, and equine related negligence actions. In 2015, he was appointed to serve the California Horse Racing Board as a hearing officer. Patrick graduated from the University of San Diego School of Law. He obtained his undergraduate degree from the University of Arizona where he majored in Animal Science and was a graduate of the Race Track Industry Program; there he received the Mildred Vessels Scholarship Award and the Race Track Industry Program’s Scholarship Award.

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