Glendale Federal Bank v. Hadden
California Court of Appeal
73 Cal. App. 4th 1150 (1999)
- Written by Daniel Clark, JD
Facts
Phillip and Julie Richardson leased two pieces of real property from the properties’ titleholders (landlords) (defendants). Glendale Federal Bank (bank) (plaintiff) granted the Richardsons a loan in exchange for a promissory note secured by the Richardsons’ leasehold interest in the property. Contrary to customary industry practice, the bank did not make any contract with the landlords concerning the bank’s rights to protect its interest in the property were the Richardsons to violate their lease agreement with the landlords. The Richardsons stopped paying their rent, and the landlords initiated an unlawful-detainer action in municipal court to recover possession of the property. The landlords did not apprise the bank of the action, nor did they join the bank as a party. The municipal court ruled in favor of the landlords and terminated the lease. The bank then sued the landlords, seeking a judgment permitting the bank to cure the Richardsons’ missed payments itself. The court granted summary judgment to the landlords, and the bank appealed.
Rule of Law
Issue
Holding and Reasoning (Rylaarsdam, J.)
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