Plaintiff commercial tenant sued defendant landlord for breach of contract, seeking compensation for losses she allegedly incurred following enforcement of an erroneous initial judgment in the unlawful detainer action. The Superior Court of Orange County, California, granted the landlord's motion for summary judgment. The tenant appealed. The parties were in court with their small business attorney in California.
Summary judgment was granted on the basis that the landlord proceeded in accordance with orderly judicial processes and therefore could not be held liable for the eviction. The court of appeal held that a landlord could breach a lease by evicting a tenant using judicial processes when the unlawful detainer judgment relied on for the writ of possession was later reversed. Contrary case law was decided in the tort context, and the court declined to extend it to the breach of contract action. Therefore, a triable issue of fact existed as to breach in the current case. If the tenant suffered damages as a result of the alleged breach, she could pursue applicable remedies for breach of contract. The court reasoned in part that the entry of an appealable judgment in the underlying unlawful detainer action was not sufficient to extinguish the lease as a matter of law.
Outcome
The court reversed the judgment.
Following a foreclosure, plaintiff borrower sued defendant bank for promissory estoppel, quiet title, slander of title, fraud, and declaratory relief; she also sought to set aside the trustee's sale and to void the trustee's deed upon the sale of the home. The Superior Court of Los Angeles County, California, dismissed the case on demurrer, and the borrower appealed.
The court held that the borrower stated a claim for promissory estoppel. She alleged that, in reliance on a promise by the bank to work with her in reinstating and modifying the loan, she did not attempt to save her home by converting her Chapter 7 bankruptcy case to a Chapter 13 case. Yet the bank then went forward with the foreclosure and did not commence negotiations toward a possible loan solution. As demonstrated in its brief on appeal, the bank failed to appreciate that Chapter 13 could be used legitimately to assist a borrower in reinstating a home loan and avoiding foreclosure. The court found that (1) the borrower could have reasonably relied on the bank's promise to work on a loan reinstatement and modification if she did not seek relief under Chapter 13, (2) the promise was sufficiently concrete to be enforceable, and (3) the decision to forgo Chapter 13 relief was detrimental because it allowed the bank to foreclose on the property. The borrower also adequately alleged a claim for fraud, the elements of which were similar to the elements of promissory estoppel. The borrower's other claims, all based on alleged irregularities in the foreclosure process, lacked merit.
The court reversed the order and judgment of the trial court to the extent they dismissed the claims for promissory estoppel and fraud. The court otherwise affirmed the order and judgment.