Facts

In 2007, plaintiff Bank of America NA's predecessor-in-interest First Republic Bank extended a $14.3 million loan to defendant Alexander Sandel to purchase three industrial buildings in Las Vegas, Nev. The loan was made to a newly formed company, Pama LV OMR LLC, of which Sandel was the sole member, and Sandel was contractually required to guarantee Pama's loan obligations. However, Sandel defaulted on the loan in 2010. Bank of America foreclosed on Sandel's Las Vegas properties and filed suit, seeking recovery of the outstanding deficiency on the loan. Bank of America also filed a second action against him and his wife, Lisa Rudes Sandel.

PLAINTIFF'S CONTENTIONS:
Bank of America claimed Sandel and his wife deliberately schemed to shield his assets from them and other creditors by transferring ownership of the family residence in Beverly Hills to Lisa Sandel in 2007, and recorded a lis pendens against the residence.

DEFENDANTS' CONTENTIONS:
Sandel claimed the "great recession" that started in 2008 prevented him from leasing his newly purchased property and, despite his best efforts to stay current, led to his default on the loan in 2010, three years after purchase.

The Sandels claimed that their transfer of the Beverly Hills residence was not intended to defraud Bank of America, including that the transfer occurred only a month after the loan closed and was done pursuant to a valid and binding postnuptial agreement after the birth of the Sandels' son in October 2007. The Sandels argued that Bank of America's civil actions violated California's strict anti-deficiency laws because the lender always viewed Sandel, and not the corporate borrower, Pama, as the primary obligor on the loan.

The Sandels moved for an order expunging the lis pendens. In a tentative ruling the court indicated it was to grant the Sandels' motion to expunge and took the matter under submission.

Damages

Bank of America sought to recover the outstanding deficiency on the loan, which it calculated to be in excess of $12 million, against Sandel as a guarantor.

Result

Bank of America dismissed both civil actions and voluntarily withdrew the lis pendens. The Sandels moved for attorney fees under the lis pendens statute, CCP 405.38. After taking the matter under submission, the court awarded them $103,262 in attorney fees.

Other Information

FILING DATE: Sept. 24, 2010.