Notice of Lis Pendens Arizona Extraterritorial Action
According to A.R.S. section 12-1191(A) (1994), litigants "may file in the office of the recorder of the county in which the property is situated" a statutory notice of lis pendens in actions "affecting title to real property." Use of lis pendens is not limited to traditional in rem proceedings.
In personam actions may also affect property in a manner that justifies the filing of a notice of lis pendens. Indeed, one action that qualifies for the protection of a lis pendens in Arizona is a claim for specific performance to convey realty.
See Evergreen West, Inc. v. Boyd, 167 Ariz. 614, 619, 810 P.2d 612, 617 (App. 1991)(holding that a developer's complaint "seeking specific performance of an option agreement is clearly an action affecting title to real property").
An in personam proceeding, brought in equity to determine the rights of individuals, may be filed in any court that has personal jurisdiction over the parties, even if the proceeding involves realty located in another state. As the United States Supreme Court has explained:
A court of equity, acting upon the person of the defendant may decree a conveyance of land situated in another jurisdiction, and even in a foreign country, and enforce the execution of the decree by process against the defendant; . . . .
By means of its power over the person of a party, a court of equity may in a proper case compel him to act in relation to property not within the jurisdiction, its decree does not operate directly upon the property nor affect the title, but it is made effectual through the coercion of the defendant; . . . .
Fall v. Eastin, 215 U.S. 1, 9-10, 54 L. Ed. 65, 30 S. Ct. 3 (1909)(emphasis added); accord Kennedy v. Morrow, 77 Ariz. 152, 161-62, 268 P.2d 326, 333(1954)(explaining that "when equity has jurisdiction of the parties it may adjudicate their interests in real property lying outside the territorial jurisdiction, and acting in personam, it will make such orders as the disposition of the case warrants" while using its contempt powers to enforce those orders); see generally Restatement (Second) of Conflict of Laws 53, 55 (1971) (decrees affecting acts or things in other jurisdictions).
Therefore, a court with personal jurisdiction over a Nevada party can compel that party "to act in relation to Arizona property," even though it cannot directly affect title to property lying outside its jurisdiction. See Fall, 215 U.S. at 10. Accordingly, the Nevada district court had subject matter jurisdiction over the claim for specific performance to compel Eversole to sell the Property to Haight and Franzeo.
Furthermore, the filing of a notice of lis pendens in an extraterritorial court does not infringe upon Arizona's jurisdiction over real property within its territorial borders. Unlike a writ of attachment, a notice of lis pendens does not entail a clear assertion of the court's control over property either during or after the litigation.
In some circumstances, an attachment of property can establish jurisdiction over an action. See A.R.S. 12-2402 (A)(3)(1994)(a trial court may issue a provisional remedy before judgment and without prior notice when "required to obtain jurisdiction").
A lis pendens, however, can never affect jurisdiction. See Kelly v. Perry, 111 Ariz. 382, 384, 531 P.2d 139, 141 (1975) ("The lis pendens statute was adopted to provide an effective means of giving notice to parties interested in land and is not a restriction on the jurisdiction of the Superior Court.").
The objective of Arizona's lis pendens doctrine is to prevent the frustration of judgments and decrees by pendente lite transfers of property interests.
The extraterritorial use of lis pendens furthers this goal. Without the use of a lis pendens, the interests of property owners and prospective purchasers would be protected to the detriment of claimants in non-situs actions.
The availability of an extraterritorial lis pendens restores the balance of interests among these parties by protecting claimants while affording more complete information to prospective purchasers. See Winters v. Schulman, 1999 UT App 119, 977 P.2d 1218, 1222-23 (Utah Ct. App. 1999) (holding that a lis pendens could be filed against Utah property in connection with out-of-state proceedings and stating that this approach affords greater protection to purchasers by informing them of all actions pending, not just those in Utah);
see generally Gail M. Hashimoto, Note, the Protection of Land Decrees: the Use of Lis Pendens in Interstate Litigation Affecting California Real Property, 36 Hastings L.J. 255, 267-68 (Nov. 1984). Although this approach may slightly diminish property owners' interests by increasing the risk of groundless lis pendens filings, owners will still be able to obtain redress in Arizona courts through A.R.S. section 33-420 when such filings are proven to be groundless.
2. the Notices of Lis Pendens Were Not Groundless and Contained No Material Misstatements of Fact Within the Meaning of A.R.S. 12-1191 and 33-420.
In Evergreen West, Inc. v. Boyd, a claimant argued that a lis pendens was groundless because there was no meeting of the minds or writing sufficient to form a binding modification of the relevant option agreements. 167 Ariz. 614, 619, 810 P.2d 612, 617.
This court reasoned that A.R.S. section 12-1191(A) authorizes a lis pendens filing in any action "affecting title to real property." Therefore, courts must examine whether there is some basis for concluding that the action meets this definition, and need not - indeed, should not - determine the merits unless such a determination is necessary to the decision. Id. at 620, 810 P.2d at 618.
In Evergreen West, the real estate developer who recorded the lis pendens was the optionee under an agreement executed by the former owner of the parcel, and was seeking specific performance of the option agreement. Id. at 621, 810 P.2d at 619. In light of the arguable basis for the claim, the court concluded that the lis pendens claim was not groundless. Id. at 621-23, 810 P.2d at 619-21.