IN BRIEF:
Case Name:
Bridge Financial Corp. v. Bird, et al.
Court:
California Court of Appeal, Fourth Appellate District
Client:
Paul A. Brennan
Main Issue:
Should the judgment be reversed because the plaintiff suffered no damages, given that the amount the plaintiff bid at the trustee's sale exceeded the amount of indebtedness on the outstanding loan? |
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About Paul A. Brennan
Paul A. Brennan is an experienced practitioner in San Juan Capistrano, California. His practice includes general civil litigation, estate planning, and real estate disputes. |
March 2006
Paul Brennan Works With Lawfinders to Reverse a Judgment
Case Details:
Hammond and Bridge loaned money to Cornerstone Homes so that Cornerstone could build a housing development. Bridge’s loan was secured by a deed of trust junior to Hammond’s. Bird and Armstrong signed completion agreements with Hammond under which they guaranteed completion of the project. When Hammond instituted nonjudicial foreclosure proceedings, Bridge acquired Hammond’s loan and obtained an assignment of the completion agreements. Bridge then purchased the property at a trustee’s sale with a bid of $3.1 million, consisting of a credit bid in the amount of the Hammond loan and $90,000 in cash. Bridge then sued Bird and Armstrong under the completion agreements to recover the amounts Bridge spent improving the property with finished lots ready for home construction. The trial court awarded Bridge $300,000 based on the difference between the purported value of the property with full performance and the value of the property after the improvements were made by Cornerstone.
Paul A. Brennan and Lawfinders persuaded the California Court of Appeal, Fourth Appellate District, that the trial court’s judgment should be reversed and judgment should be entered in favor of Bird and Armstrong. The Court agreed with Brennan and Lawfinders that in reality, Bridge had not suffered any damages because the amount of its bid at the trustee’s sale exceeded the amount of the indebtedness on the Hammond loan, which was approximately $3 million. In its decision, the Court indicated that the trial court erred by combining the indebtedness on the Hammond loan with the indebtedness on the Bridge loan, noting that the completion agreements on which Bridge’s claims were based only applied to the Hammond loan. As assignee, Bridge could not receive any more rights than Hammond had, and Hammond did not have a right to enforce the completion agreements in connection with Bridge’s loan. The Court also rejected Bridge’s claim that the two deeds of trust merged.
