When real estate is part of a trust dispute, beneficiaries often worry that a trustee might sell, mortgage or otherwise encumber the property before the case is resolved.
California law offers a potential safeguard in these situations: the lis pendens, a recorded notice alerting the public that the property is the subject of pending litigation.
Case Background: Newell v. Superior Court
A recent Court of Appeal decision, Newell v. Superior Court (2024) 107 Cal.App.5th 728 confirms that a lis pendens can be used in one of the most common types of probate disputes — a petition to remove a trustee — so long as the trustee holds legal title to the subject real estate.
This case clarifies the meaning of a “real property claim” under California Code of Civil Procedure section 405.4 and strengthens the ability of beneficiaries to protect trust property during litigation.
Why Was a Lis Pendens Filed in a Trust Dispute?
The petitioner, Lucy Mancini Newell, was a formerly named trustee and beneficiary of a family trust. After amendments were made to the trust — allegedly through fraud and undue influence — the respondent, Neneth D. Rollins, was named as both the trustee and sole trust beneficiary.
Litigation over the validity of those amendments, as well as a claim for trustee removal, was ongoing when Rollins purchased residential property in the Los Angeles neighborhood of Van Nuys using trust funds and took title as trustee.
Concerned that the property might be sold, refinanced or otherwise encumbered before the court determined who should serve as trustee (and who was the proper beneficiary of the Trust), Newell recorded a lis pendens on title to the purchased property. This notice served as a public warning that the property was involved in a pending lawsuit and that any buyer or lender would take it subject to the outcome of that case.
Rollins, however, moved to expunge the lis pendens, arguing that the petition did not meet the statutory definition of a “real property claim” because it sought only to change who managed the trust, not who owned the property, which would remain beneficially owned by the trust beneficiaries. The probate court agreed, ordered the lis pendens removed and awarded the respondent attorney’s fees. The petitioner then sought review in the California Court of Appeal.
What Is a Lis Pendens and What Are Its Requirements?
A lis pendens — Latin for “suit pending” — is essentially a public red flag planted on a piece of property. By recording it in the county land records, a litigant gives notice to the world that the property is tied up in a legal dispute. Anyone who tries to buy, sell or take a loan against the property does so with the risk that the lawsuit could affect that person’s claim to ownership or possession.
Today, California law formalizes the lis pendens process through a series of statutes (Code Civ. Proc., §§ 405.20–405.61). These statutes limit its use to cases where the lawsuit includes a “real property claim” — meaning the relief sought, if granted, would “affect (a) title to, or the right to possession of, specific real property.” (Cal. Civ. Proc. Code § 405.4)
This requirement was central to the dispute in Newell. In California, a trust itself is not a legal entity capable of holding title to property. Instead, the trustee holds legal title. As a result, replacing a trustee necessarily changes the name of the legal titleholder reflected in the public property records.
The question in Newell was whether that change alone is enough to qualify as “affecting title” under section 405.4 — and therefore justify recording a lis pendens.
Does Changing a Trustee Affect Legal Title to Property?
Newell argued that her petition did assert a valid real property claim. In California, a trustee is the legal titleholder to trust real estate. Removing Rollins and appointing a successor trustee would necessarily require changing the name of the person listed on the deed, thereby directly affecting title.
Rollins countered that the dispute was really about who managed the trust rather than who owned the property. The beneficial interest in the property held by the trust beneficiaries, Rollins argued, would remain the same regardless of who served as trustee, meaning that replacing the trustee would not truly affect title.
Rollins also warned that allowing lis pendens notices in trustee removal cases would encourage overuse, potentially leading to a flood of such filings in routine trust disputes.
Lis Pendens Expunged: Probate Court Says Changing Trustees Doesn’t Affect Title
The probate court agreed with Rollins and ordered the lis pendens expunged. It concluded that removing the trustee would not meaningfully affect the ownership of the property because the beneficial interest held by the trust beneficiaries would remain intact regardless of who served as trustee. Based on these findings, the court concluded that the lis pendens was unjustified.
Appellate Court Reversal: Changing Trustees Means Changing Titleholder
The Court of Appeal disagreed and reversed the probate court’s ruling. The appellate court emphasized that a trust itself cannot hold title to real property; only the trustee can. Therefore, replacing the trustee necessarily changes the legal titleholder identified in the official property records. This change, the court held, is enough to satisfy Section 405.4’s requirement that the litigation “affect title” to the property.
The court also rejected the idea that a change in trustee was too minor to qualify as affecting title because the property would remain in the trust. Even if the beneficial ownership stayed the same, the person with legal title — and the legal authority to control, sell or mortgage the property — would change. The court concluded this change has a direct and substantial impact on title.
Appellate Court Reversal: Changing Trustees Means Changing Titleholder
Addressing concerns about potential abuse, the Court of Appeal pointed to existing statutory safeguards. Under Code of Civil Procedure section 405.32, a party can move to expunge a lis pendens if it is not supported by a claim with probable validity.
Section 405.33 allows courts to require a bond, and Section 405.38 permits an award of attorney’s fees against a party who records an unjustified lis pendens. These mechanisms, the court reasoned, are sufficient to prevent misuse without narrowing the statutory definition of a real property claim.
Because the court found the petition to remove the trustee itself sufficient to support the lis pendens, it ordered the probate court to vacate its order expunging the lis pendens.
Why Newell v. Superior Court Matters
Petitions to remove a trustee are among the most common matters in probate litigation. When those petitions involve real estate held in trust, the Newell decision makes clear that beneficiaries have a powerful tool to protect the property during litigation.
By recording a lis pendens, a beneficiary can ensure that the trustee cannot sell or encumber the property unless potential buyers or lenders are willing to do so notwithstanding the pending litigation.
For trustees, the decision is a reminder that a removal petition may restrict their ability to deal with trust real estate while litigation is pending. It also underscores the importance of understanding when a lis pendens is justified — and how to challenge one that is not.
Key Takeaways
- Trustee removal can be a real property claim: Changing a trustee changes the legal titleholder to trust real estate, satisfying Code of Civil Procedure section 405.4.
- Lis pendens provides critical protection: Recording one warns the public of pending litigation and deters unauthorized transfers or encumbrances.
- Safeguards prevent misuse: Sections 405.32, 405.33, and 405.38 allow challenges to a lis pendens, require bonds and permit fee awards to deter improper lis pendens from being filed.
- Plead with precision: Clearly allege how the relief sought will affect legal title to ensure the lis pendens can withstand a motion to expunge.
Involved in a trust dispute?
If you are involved in a trust dispute and need to protect real estate from being sold or encumbered before the court rules, the Newell decision confirms that a lis pendens may be available — if you can connect your claim to who holds legal title.
The probate attorneys at Keystone Law Group can help assess whether this strategy is appropriate in your case. Call our skilled legal team today to learn more.
