Demurrer to First Amended Complaint and Motion to Strike
(20) Tentative Ruling
Re: NNN Capital Fund I, LLC v. Bmark 2018-B7 East Street, LLC Superior Court Case No. 25CECG05615
Hearing Date: June 23, 2026 (Dept. 501)
Motion: Demurrer to First Amended Complaint and Motion to Strike
Tentative Ruling:
To sustain the demurrer without leave to amend. (Code Civ. Proc., § 430.10, subd. (e).) To take the motion to strike off calendar as moot in light of the ruling on the demurrer. Within seven days of service of the order by the clerk, moving party shall submit to this court a proposed judgment dismissing the action. To grant moving party’s requests for judicial notice, and overrule all objections thereto.
Explanation:
In this action plaintiffs NNN Capital Fund I, LLC and CAP Fund E Street Investors LLC (collectively, “Capital Fund”) assert various claims against Bmark 2018-B7 East Street, LLC (“Bmark”). Capital Fund allege standing in the First Amended Complaint (“FAC”) as junior lienholders in relation to the property and loan at issue. They obtained junior lienholder status as holders of an over $20,000 judgment, with recorded abstracts, against Key Island LLC and its members Todd Mikles (“Mikles”) and Kingfisher Island Inc.
Bmark’s moving papers establish, and plaintiffs in the opposition do not substantively dispute, that the judgment upon which their lienholder status was based has been vacated. Plaintiffs’ basis for standing is its status as a junior lienholder on the subject property, arising from the judgment plaintiffs obtained from the Orange County Superior Court in NNN Capital Fund I, LLC v. Mikles, Case No. G064487 (Super. Ct. No. 30- 2017-00910991) (“Orange County Case”) which confirmed an arbitration award against Mikles. After being unable to collect on the Judgment against Mikles, Capital Fund obtained an order in the Orange County Case to add Key Island as a judgment debtor, and it then recorded a judgment lien against the subject property on or about September 18, 2025.
Mikles appealed the confirmation of the arbitration award and resulting judgment. The Fourth District Court of Appeals in a published opinion vacated the arbitration award and remanded for factual findings regarding whether the individuals purporting to act on behalf of plaintiffs had standing to sue and enforce an arbitration award against Mikles. Finding that standing was not established before the trial court, the appellate court vacated Capital Fund’s arbitration award and judgment, and remanded the case to the trial court to determine whether the liquidating trustees had standing to assert Capital Fund’s claims against Mikles. (
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Capital Fund’s status as lienholder pursuant to this judgment lien is the entire basis for their standing to pursue claims against Bmakr in this action. (FAC ¶ 1, 7.) Plaintiffs argue 3
in their opposition, “the FAC specifically alleges Plaintiffs have direct Claims against Defendant as subordinate junior lienholders as judgment creditors as well as derivative Claims on behalf of Key Island ...” (Oppo. pp. 3-4.) Thus, plaintiffs concede that their standing is dependent on their status as junior lienholder based on their judgment against Mikles. They do not dispute that the appellate decision eviscerates their standing in this action.
A lien therefore cannot exist apart from the judgment upon which it is based. Thus, in the ordinary course of events when the judgment is vacated by court order the lien will also cease to exist, because the effect of a vacating order is to eliminate the judgment. (Lantz v. Vai (1926) 199 Cal. 190, 193 [248 P. 665].) Once vacated, the status of the parties that existed prior to the judgment is restored and the situation then prevailing is the same as though the order or judgment had never been made. (Sherwin v. Southern Pacific Co. (1914) 168 Cal. 722, 724 [145 P. 92].) (Bulmash v. Davis (1979) 24 Cal.3d 691, 697.)
Capital Fund’s only response in the opposition is to point out that remittitur has not yet issued – “Until remittitur issues, the lower court cannot act upon the reviewing court's decision; remittitur ensures in part that only one court has jurisdiction over the case at any one time." (Gallenkamp v. Superior Court (1990) 221 Cal.App.3d 1, 12.)
While it is correct that the Orange County Superior Court cannot act upon the appellate decision until remittitur issues, this principle does not resurrect Capital Fund’s alleged basis for legal standing. Whichever court has jurisdiction over the Orange County Case at this moment, it is clear that plaintiffs have no judgment giving them status as junior lienholder.
“Standing is a threshold issue, because without it no justiciable controversy exists.” (Iglesia Evangelica Latina, Inc. v. Southern Pacific Latin American Dist. of the Assemblies of God (2009) 173 Cal.App.4th 420, 445.) “[L]ack of standing may be raised by demurrer or at any time in the proceeding, including at trial or in an appeal.’” (Troyk v. Farmers Group, Inc. (2009) 171 Cal.App.4th 1305, 1345, quoting Buckland v. Threshold Enterprises, Ltd. (2007) 155 Cal.App.4th 798, 813.)
As plaintiffs have lost their standing, the demurrer must be sustained. No leave to amend is granted because plaintiffs have suggested no way in which they might assert any claim against Bmark without junior lienholder status.
Pursuant to California Rules of Court, rule 3.1312(a), and Code of Civil Procedure section 1019.5, subdivision (a), no further written order is necessary. The minute order adopting this tentative ruling will serve as the order of the court and service by the clerk will constitute notice of the order.
Tentative Ruling
Issued By: KCK on 06/22/26. (Judge’s initials) (Date)
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