Obligations reduced to a promissory note are often accompanied by a written guaranty. The law treats the guaranty as an independent obligation.
A case recently decided by California’s First District Court of Appeal —...more
12/28/2023
/ Appeals ,
Cal Code of Civil Procedure ,
Deed of Trust ,
Foreclosure ,
Guarantors ,
Guaranty Claims ,
Investors ,
Lenders ,
Liability ,
Loan Servicing ,
Promissory Notes ,
Reversal ,
Settlement
In May 2021, Money and Dirt covered a case published by California’s Second Appellate District — Tsasu LLC v. U.S. Bank Trust, N.A. — holding that under Code of Civil Procedure section 764.060 (part of California’s Quiet...more
Alter ego liability is a frequent topic covered in The LLC Jungle — see here for a list of all prior “alter ego” related posts.
The alter ego doctrine allows a court to disregard a corporate entity (including LLCs) and...more
5/23/2023
/ Alter Ego ,
Appeals ,
Arbitration ,
Arbitration Awards ,
Breach of Contract ,
Business Ownership ,
California ,
Corporate Entities ,
Liability ,
Limited Liability Company (LLC) ,
Loans ,
Marketing ,
Reversal
“Standing” is the legal term used to describe the requirement that a lawsuit be brought by the person(s) or entity(ies) having a right to bring the claim, generally referred to as the “real party in interest.” Lawsuits fail,...more
It is not uncommon for loan agreements to provide for fees, penalties, and default interest in the event of the borrower’s late payment. However, a case recently published by California’s First Appellate District — Honchariw...more
12/29/2022
/ Appeals ,
Arbitration ,
California ,
Civil Code ,
Default ,
Fees ,
Interest Rates ,
Late Payments ,
Liquidated Damages ,
Loan Agreements ,
Penalties ,
Reversal ,
Unenforceable Contract Terms
California’s anti-SLAPP statute (Code of Civil Procedure section 425.16) aims to protect defendants from meritless lawsuits designed to chill “protected activity” — i.e., the exercise of rights of petition or free speech on...more
10/17/2022
/ Anti-SLAPP ,
Appeals ,
Breach of Duty ,
Cal Code of Civil Procedure ,
California ,
Cross-Complaints ,
Fiduciary Duty ,
Limited Liability Company (LLC) ,
Motion To Strike ,
Operating Agreements ,
Protected Activity ,
Real Estate Investments ,
Reversal
After a foreclosure sale by a senior creditor, California’s Civil Code section 2924k governs how the sale proceeds are applied in the following order of priority...more
Flashback: Five years ago, Money and Dirt covered the Salazar v. Thomas opinion from California’s Fifth District Court of Appeal holding that a Notice of Default does not “disturb possession” sufficiently to start the...more
6/29/2020
/ Action to Quiet Title ,
Appeals ,
Borrowers ,
Deed of Trust ,
Foreclosure ,
Foreclosure Sales ,
Home Equity Line of Credit ,
Lenders ,
Notice of Default ,
Notice Requirements ,
Property Owners ,
Real Estate Transactions ,
Reversal ,
Statute of Limitations ,
Time-Barred Claims ,
Trustee Sales ,
Trustees
A landowner grants a license by allowing someone else to use the land. A license can be created by express permission, or by acquiescence (allowing the use with full knowledge and without objecting). Normally, a license is...more
4/27/2020
/ Appeals ,
Commercial Real Estate Contracts ,
Covenants that Run With the Land ,
Easements ,
Irrevocable License Agreements ,
Land Owners ,
License Agreements ,
Notice Requirements ,
Parking Lots ,
Property Ownership ,
Purchasers ,
Recording Acts ,
Reversal ,
Subsequent Purchasers ,
Warehouses
Under California law, receivers can be appointed for many purposes.
Sometimes a “general equity” receiver is appointed to take control of a business entity and its assets where the decision-makers are deadlocked in...more
2/27/2020
/ Abatement ,
Appeals ,
Building Codes ,
City Councils ,
Court-Appointed Receivers ,
Dismissals ,
Distressed Properties ,
Failure to Cure ,
Hotels ,
Notice Requirements ,
Nuisance ,
Pre-Trial Motions ,
Property Valuation ,
Public Nuisance ,
Rehabilitation and Restoration Plans ,
Reversal ,
Reversible Error ,
Right To Cure ,
Safety Violations
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
“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
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
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
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
As detailed in prior posts, to establish a claim for adverse possession, a plaintiff must prove the following elements: For adverse possession of an easement, the plaintiff must pay the taxes as long as the easement has been...more
10/12/2018
/ Action to Quiet Title ,
Adverse Possession ,
Appeals ,
Color of Title ,
Constructive Notice ,
Easements ,
Failure-to-File ,
Lump Sum Payments ,
Prompt Payment ,
Property Tax ,
Reversal ,
Tax Debt
In reviewing notable guaranty cases from 2017 while preparing this year’s updates and edits for CEB’s top-notch treatise, California Mortgages, Deeds of Trust, and Foreclosure Litigation, we came across an opinion that...more
9/7/2018
/ Appeals ,
Board of Directors ,
Commercial Leases ,
Contribution Claims ,
Conversion ,
Corporate Misconduct ,
Dismissals ,
Guarantors ,
Joint and Several Liability ,
Landlords ,
Levy ,
Proportionality ,
Release of Liability ,
Reversal ,
Shareholders ,
Sheriffs Sale
Under California’s State Housing Law (Health and Safety Code sections 17910-17998.3), if an apartment building owner fails to comply with a notice to repair or abate building standard violations issued by an enforcement...more
8/17/2018
/ Abatement ,
Apartments ,
Appeals ,
Attorney's Fees ,
Building Codes ,
Duty To Repair ,
Equitable Lien ,
Intervenors ,
Lenders ,
Public Housing Authorities ,
Receivership ,
Residential Property Owners ,
Reversal ,
Safety Violations ,
State Agencies ,
State Law Claims ,
Written Notice