Foreclosure can often have tricky impacts on lease rights... See Eviction After Foreclosure: California Supreme Court Weighs In and When a Lender Forecloses on a Leasehold Interest….
An opinion recently published by...more
10/28/2019
/ Appeals ,
Assignments ,
Breach of Contract ,
Commercial Leases ,
Commercial Tenants ,
Foreclosure ,
Fraud ,
General Partner ,
Joint and Several Liability ,
Judgment Debtors ,
Landlords ,
Limited Liability Partnerships ,
Money Judgment ,
Motion to Amend ,
Parking Lots ,
Reversal ,
Shopping Centers ,
Termination of Rights ,
Third-Party Beneficiaries
One of the hot button issues frequently leading to litigation in “The LLC Jungle” is the removal of an LLC’s manager.
Thoughtfully drafted LLC Operating Agreements contain provisions addressing the criteria and procedures...more
Sister blog The LLC Jungle recently posted about an opinion from California’s Sixth District Court of Appeal — Orozco v. WPV San Jose, LLC — describing the legal difference between an LLC tenant, and the LLC’s owner who...more
9/26/2019
/ Appeals ,
Commercial Leases ,
Commercial Tenants ,
Damages ,
Fraud ,
Fraudulent Inducement ,
Guarantors ,
Landlords ,
Limited Liability Company (LLC) ,
Remedies ,
Rescission ,
Reversal ,
Separate Entity Rule
A limited liability company (LLC) is a popular form of business entity. One of the main reasons for forming any business entity is to limit liability. In general, without a showing of “alter ego” liability, a business owner...more
9/18/2019
/ Appeals ,
Business Ownership ,
Commercial Leases ,
Commercial Tenants ,
Damages ,
Fraud ,
Injury-in-Fact ,
Landlords ,
Limited Liability Company (LLC) ,
Remedies ,
Rescission ,
Reversal ,
Trial Court Orders
A trustee in charge of administering a trust has many duties.
A trustee appointed pursuant to a deed of trust, however, is different. The duties of a deed of trust trustee are exceptionally narrow.
A recent opinion...more
8/25/2019
/ Appeals ,
Assignments ,
Construction Loans ,
Deed of Trust ,
Default ,
Demurrers ,
Dismissals ,
Duties & Responsibilities ,
Fiduciary Duty ,
Foreclosure ,
Land Developers ,
Loans ,
Reaffirmation ,
Trustees ,
Verification Requirements ,
Wrongful Foreclosures
“Piercing the corporate veil” — also referred to as “alter ego” liability — is a familiar concept under California law. Ordinarily, a corporation or other entity (such as an LLC) is considered a legal entity separate and...more
8/13/2019
/ Alter Ego ,
Appeals ,
Business Assets ,
Business Ownership ,
Cal Code of Civil Procedure ,
Corporate Veil ,
Corporations Code ,
Debt Collection ,
Debtors ,
Judgment Creditors ,
Limited Liability Company (LLC) ,
Personal Liability ,
Piercing the Corporate Veil ,
Reversal
In California, lien priority is usually resolved by a straightforward examination of the time of creation or recordation with the County Recorder, which gives “constructive notice” of the lien to the world.
But some liens...more
7/26/2019
/ Actual or Constructive Knowledge ,
Appeals ,
Building Codes ,
City Planning Departments ,
Injunctive Relief ,
Judicial Discretion ,
Lien Priority ,
Liens ,
Mortgage Priority ,
Municipalities ,
Permits ,
Public Nuisance ,
Receivership ,
Recording Statutes ,
Safety Violations ,
Stop Work Orders ,
Super Priority
Under California’s Proposition 60, which became enacted in 1986 as Revenue and Taxation Code section 69.5, any “person” over the age of 55 years may transfer the base year value of his or her residential property to any...more
7/8/2019
/ Appeals ,
Business Formation ,
Construction Loans ,
County Assessors ,
Limited Liability Company (LLC) ,
Primary Residence ,
Property Tax ,
Residential Property Owners ,
Reversal ,
Tax Appeals ,
Tax Basis ,
Transfer Taxes
Goodwill is one of the trickier areas of eminent domain law.
When a governmental agency takes private property through the exercise of eminent domain powers, the agency generally must pay the property owner the fair market...more
6/24/2019
/ Appeals ,
Cal Code of Civil Procedure ,
Calculation of Damages ,
Duty to Mitigate ,
Eminent Domain ,
Fifth Amendment ,
Goodwill ,
Jury Trial ,
Loss of Goodwill ,
Relocation ,
Reversal ,
Takings Clause ,
Transportation Authorities
The trend in most real estate-related LLCs is to have a single appointed manager. Under the LLC’s operating agreement, the manager typically has authority to make the day to day business decisions on behalf of the LLC, while...more
6/10/2019
/ Appeals ,
Attorney Representation Agreements ,
Co-Management ,
Conflict Resolution ,
Disqualification ,
Lack of Authority ,
Limited Liability Company (LLC) ,
Limited Partnerships ,
Managing Members ,
Operating Agreements ,
Partnership Agreements ,
Petition for Partition ,
Real Estate Investments
Almost two years ago, Money and Dirt covered a Fourth District California Court of Appeal opinion addressing an apparent split of authority regarding how a lender can enforce senior and junior deeds of trust on the same...more
5/20/2019
/ Appeals ,
Assignments ,
CA Supreme Court ,
Cal Code of Civil Procedure ,
Commercial Property Owners ,
Deed of Trust ,
Default ,
Deficiency Judgments ,
Junior Liens ,
Lenders ,
Mortgage Lenders ,
Section 580d ,
Senior Lenders ,
Split of Authority ,
Trustee Sales
Under California’s Revised Limited Liability Company Act (“RULLCA”), LLC participants have substantial freedom to structure their relationship in a customized manner under their governing operating agreement. But one of the...more
5/16/2019
/ Attorney's Fees ,
Books & Records ,
Breach of Duty ,
Fiduciary Duty ,
Good Cause ,
Inspection Rights ,
Limited Liability Company (LLC) ,
Managing Members ,
Members ,
Operating Agreements ,
Prevailing Party ,
RULLCA
About one year ago, Money and Dirt covered the evolution — and demise — of the “transit-rich” housing bill proposed by State Senator Scott Wiener.
After that defeat a year ago, a new effort is underway. Senator Wiener’s...more
Many California-based LLC managers and members are lured by the potential benefits of forming the LLC under the laws of a jurisdiction outside of California. Delaware can be an enticing option. Delaware is known for its...more
4/25/2019
/ Breach of Duty ,
Business Formation ,
Business Property ,
Choice of Entity ,
Civil Liability ,
Corporate Dissolution ,
Fiduciary Duty ,
Forum State ,
Jurisdiction ,
Limited Liability Company (LLC) ,
Litigation Fees & Costs ,
Managing Members ,
Members ,
Multidistrict Litigation ,
Multistate Corporations ,
Out-of-State Companies ,
State of Incorporation
In California, a holdover tenant (a tenant who remains in possession after the expiration of the written lease) has fewer rights than a tenant operating under a lease....more
3/27/2019
/ Appeals ,
Commercial Leases ,
Commercial Tenants ,
Contract Terms ,
Demurrers ,
Dismissals ,
Expiration Date ,
Holdover Occupants ,
Landlords ,
Reaffirmation ,
Right of First Refusal ,
Third-Party ,
Unenforceable Contract Terms
Most LLC Operating Agreements contain a provision describing the “purpose” of the business.
These “purpose statements” can be extremely broad and open-ended, parroting the boilerplate language required to be present in the...more
In California, priority between competing liens on the same real property is usually determined by the “first in time, first in right” rule.
Under that rule, different liens on the same property have priority according to...more
3/2/2019
/ Appeals ,
Assessment ,
CC&Rs ,
Conditions of Participation (CoP) ,
Constructive Notice ,
Covenants that Run With the Land ,
First in Time Laws ,
Foreclosure Sales ,
Golf Courses ,
Land Use Restrictions ,
Lenders ,
Lien Priority ,
Recording Statutes ,
Residential Property Owners ,
Subordination
One of the recurring issues I see in my litigation practice is LLC managers engaging in “questionable conduct” with third parties — outsiders to the LLC.
By “questionable conduct,” I generally mean binding the LLC to...more
2/25/2019
/ Actual or Constructive Knowledge ,
Agents ,
Appeals ,
Indemnity Agreements ,
Lack of Authority ,
Limited Liability Company (LLC) ,
Managing Members ,
Operating Agreements ,
RULLCA ,
Third-Party Relationships ,
Unauthorized Transactions
General liability insurance policies normally cover “property damage.” Physical injury to, or outright destruction of, property almost always fits within policy coverage.
But what about situations when the property is not...more
2/11/2019
/ Appeals ,
Breach of Contract ,
Commercial Insurance Policies ,
Commercial Leases ,
Commercial Tenants ,
Conditional Use Permit ,
Default Judgment ,
Denial of Insurance Coverage ,
Diminution in Value ,
Insurance Litigation ,
Landlords ,
Loss of Use ,
Negligence ,
Nightclubs ,
Property Damage ,
Reversal ,
Revocation ,
Security Guards ,
Shootings ,
Summary Judgment ,
Zoning Laws
A recent LLC Jungle blog post covered the impact of “conversion” from a different form of entity to an LLC — generally, the entity’s rights and liabilities remain the same.
But what about a more sophisticated transaction...more
Under California’s “tender rule,” a borrower suing to halt or unwind a wrongful foreclosure sale generally must allege that it tendered the amounts due on the loan before the sale. The rationale underlying the tender rule is...more
1/21/2019
/ Accelerated Payments ,
Appeals ,
Borrowers ,
Default ,
Delinquent Borrowers ,
Foreclosure ,
Lenders ,
Mortgage Lenders ,
Mortgages ,
Redemption Agreement ,
Reinstatement ,
Reversal ,
Statutory Rights ,
Tender Rules ,
Wrongful Foreclosures
It is no secret that LLC managers enjoy a lot of discretion regarding how they operate the LLC. Members of the LLC often find it difficult to challenge the manager’s decisions on key transactions, investments, and other...more
1/14/2019
/ Appeals ,
Contract Terms ,
Covenant of Good Faith and Fair Dealing ,
DE Supreme Court ,
Discretionary Functions ,
Fiduciary Duty ,
Inherent Authority ,
Limited Liability Company (LLC) ,
Managers ,
Members ,
Operating Agreements ,
Selling a Business
This week, the California Supreme Court issued its opinion in Dr. Leevil, LLC v. Westlake Health Care Center. The case reviewed the decision of the California Court of Appeal from March 2017...more
12/22/2018
/ Appeals ,
CA Supreme Court ,
Cal Code of Civil Procedure ,
Condition Precedent ,
Deed of Trust ,
Eviction ,
Foreclosure ,
Notice Requirements ,
Notice to Quit ,
Perfection of Title ,
Popular ,
Recording Statutes ,
Tenants ,
Transfer of Title ,
Trustee Sales
Not much, really. While the entity’s form and structure morph to an LLC, the rights and liabilities of the entity are generally unaffected.
Under California’s statutes governing the conversion of an entity to an LLC...more
Lenders who prevail on claims arising from a deed of trust can always recover their attorney fees from the losing party as long as the deed of trust says something about fee recovery, right?
It’s not that simple....more
11/30/2018
/ American Rule ,
Anti-Deficiency Provisions ,
Appeals ,
Attorney's Fees ,
Borrowers ,
Contract Terms ,
Debt ,
Deed of Trust ,
Demurrers ,
Fee Agreements ,
Foreclosure ,
Lenders ,
Mortgage Lenders ,
Mortgages ,
Non-Signatories ,
Prevailing Party ,
Summary Judgment