Government Code section 53340, subdivision (e) provides that property owners can apply for PACE financing to finance energy-efficient upgrades to their property through a special assessment that is collected in the same manner as ad valorem property taxes. (Gov. Code, § 53340, subd. (e).)) The special assessment is “subject to the same penalties and the same procedure, sale, and lien priority in case of delinquency as provided for ad valorem taxes.” (Ibid.)

Government Code section 53340, subdivision (h) requires that “[a]ll special taxes levied by a community facilities district shall be secured by the lien imposed pursuant to Section 3115.5 of the Streets and Highways Code.” (Gov. Code, §53340, subd. (h).)

Government Code section 53328.3 provides that “the clerk of the legislative body shall . . . record the notice of special tax lien provided for in Section 3114.5 of the Streets and Highways Code, whereupon the lien of the special tax shall attach as provided in Section 3115.5 of the Streets and Highways Code. The notice of special tax lien shall be recorded in the office of the county recorder in each county that any portion of the district is located.” (Gov. Code, § 53328.3.)

“As a cumulative remedy, if debt is outstanding, the legislative body may, not later than four years after the due date of the last installment of principal thereof, order that any delinquent special taxes levied payday loans Eatonton GA in whole or in part for payment of the debt, together with any penalties, interest, and costs, be collected by an action brought in the superior court to foreclose the lien of special tax.” (Gov. Code, § 53356.1, subd. (a).)

Accordingly, the Court finds that Ygrene’s recording of the PACE lien is protected by the litigation privilege because the recording of PACE liens are authorized by validly enacted California statutes, are enforceable by foreclosure, and bear a reasonable relation to litigation

As explained above in the discussion of Winton, homeowners’ assessment liens are permitted by law to achieve the object of litigation because the lien “must be filed as first step in foreclosure actions to remedy defaults, and are thus closely related to judicial proceedings.” (Winton, supra, 18 Cal.App.4th at p. 569.)

Plaintiff has failed to state facts sufficient to constitute a cause of action for slander of title, because the recording of the PACE lien is protected by the litigation privilege.

(Demurrer, p. 17:9-11.) Defendant asserts that because it was never in privity with Plaintiff, Plaintiff would have to plead the existence of a duty under the Biakanja factors, which Plaintiff has not alleged. (Id. at p. -25, citing to Biakanja v. Irving (1958) 49 Cal.2d 647, 650 (Biakanja).)

Plaintiff alleges that “The United States Department of Energy regularly issues Best Practice Guidelines for Residential PACE Financing Programs (the ‘Best Practice Guidelines’)

In Biakanja , the Supreme Court identified the factors that may result in a court’s conclusion a duty exists: “The determination whether in a specific case the defendant will be held liable to a third person not in privity is a matter of policy and involves the balancing of various factors, among which are the extent to which the transaction was intended to affect the plaintiff, the foreseeability of harm to him, the degree of certainty that the plaintiff suffered injury, the closeness of the connection between the defendant’s conduct and the injury suffered, the moral blame attached to the defendant’s conduct, and the policy of preventing future harm.” (Biakanja, supra, 49 Cal.2d at p. 650.)

First, Plaintiff sufficiently alleges that Defendant’s PACE lien was intended to affect Plaintiff. . . [which] provide generally that PACE lenders should take adequate steps to ensure that senior lienholders are notified when PACE loans are taken by a borrower and secured by real property, that contractors hired by the homeowner to complete the energy-efficient improvements are properly vetted, that disbursements should be paid to contractors on an ongoing basis, as opposed to a lump-sum payment, that PACE assessments should not exceed 10% of the property’s estimated value and the PACE lender should implement appropriate quality assurance and antifraud measures (including inspections of property).” (SAC, ¶ 15.) Plaintiff further alleges “that Ygrene, Reerica and PACE Funding did not comply with any of these best practices with respect to the Property.” (Ibid.)