South Bay Building Enterprises v. Riviera Lend-Lease
California Court of Appeal
72 Cal. App. 4th 1111 (1999)
- Written by Daniel Clark, JD
Facts
James Archer took out loans from both South Bay Building Enterprises, Inc. (South Bay) (plaintiff) and Riviera Lend-Lease, Inc. (Riviera) (defendant). Both loans were secured by deeds of trust on Archer’s home, and Riviera’s deed of trust was senior to South Bay’s. Archer defaulted on his loans. Archer and Riviera made several agreements seeking to allow Archer to keep his home. Riviera agreed to postpone and reschedule foreclosure sales until no outside bidders came to make offers. Riviera canceled two foreclosure sales when outsider bidders willing to make offers showed up. Moreover, at a third foreclosure sale, at which Riviera was the only bidder, Riviera made an inflated bid so as to deter any outside bidders from making competing offers. Riviera never actually paid the inflated bid but instead merely took title to the property from Archer, allowing Archer to keep living in his home. Riviera’s foreclosure extinguished South Bay’s lien. South Bay sued Riviera and Archer for fraud. The trial court issued a directed verdict in favor of Archer and Riviera, finding that liability would have required South Bay to detrimentally rely on a false statement of material fact, which it had not. South Bay appealed.
Rule of Law
Issue
Holding and Reasoning (Vogel, J.)
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