Elder

When a trial court conditions the expungement of a notice of lis pendens (hereafter lis pendens) upon the defendant giving the plaintiff an undertaking (Code Civ. Proc., § 409.1) and the plaintiff prevails in the underlying lawsuit solely on one or more causes of action that would not support the recordation of a lis pendens, may the plaintiff satisfy the judgment out of the proceeds of the undertaking? We conclude that a plaintiff may not do so and therefore reverse the trial court’s judgment enforcing liability on the bond (§ 996.440).

Background

In July 1979, Charles Hill and Paul Elder entered into a written option agreement (hereafter the Hill-Elder option) whereby Elder obtained the exclusive right to purchase certain real property (hereafter the Agoura property) owned by Hill. Charles Hill’s wife, Dorothy, became a party to the Hill-Elder option on December 9, 1980.

On January 8, 1981, Agoura Investment Company (hereafter Agoura), a general partnership consisting of Elder and Jack Barnes, and Larwin Construction Company (hereafter Larwin) entered into a written option agreement whereby Larwin obtained the right to purchase the property rights held by Elder under…