Ron Sommers, as Chapter 7 Trustee for Alabama and Dunlavy, Ltd., Flat Stone II, Ltd., and Flat Stone, Ltd., and as Successor in Interest to Jay Cohen, Individually and as Trustee of the Jhc Trusts I and Ii v. Sandcastle Homes, Inc.
521 S.W.3d 749 | Texas Supreme Court | 2017
What This Case Means for Subcontractors
A property dispute arose when Matthew Dilick transferred property and later defaulted on a loan, triggering a lawsuit by the trust that owned the property. The defendants got a lis pendens notice (a legal notice of the pending lawsuit) expunged from the property records. The Texas Supreme Court ruled that expunging a lis pendens only removes the notice from the public record—it doesn't erase the defendants' actual knowledge of the underlying dispute if they learned about it through other means. This matters to subcontractors because it means removing a notice from records doesn't eliminate a property owner's legal liability for knowing about claims against the property.
Key Takeaways
- •Expunging a lis pendens from public records doesn't protect a buyer or lender who already knows about the underlying dispute through other sources
- •If you have actual notice of a property claim (through conversations, documents, or prior dealings), a property owner can't use record expungement to claim ignorance
- •Always investigate property title thoroughly and document any disputes or claims you discover, even if notices later get removed from public records
Expunction does not eradicate notice arising independently of the recorded instrument expunged.
Frequently Asked Question
If a lis pendens notice gets removed from property records, does that protect the property owner from liability?
No. Expunging a lis pendens only removes it from the public record. If the property owner already knew about the underlying dispute through other means—like direct communication or prior dealings—they remain liable. The expungement doesn't erase their actual knowledge of the claim.
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