Swinerton & Walberg Co. v. Union Bank
California Court of Appeal
25 Cal. App. 3d 259, 101 Cal. Rptr. 665 (1972)
- Written by Whitney Kamerzel , JD
Facts
James and Audrey Casey and Union Bank (defendants) contracted for Union Bank to provide a $892,000 loan to fund an apartment-construction project. The loan was dispersed into a construction-loan disbursement account at Union Bank, and $74,000 was saved until the project’s end to make sure there were no outstanding mechanic’s liens. The Caseys hired Swinerton & Walberg Co. (Swinerton) (plaintiff) to be the project’s general contractor and told Swinerton that there was a construction-loan disbursement account that Swinerton would be paid from. Swinerton therefore contracted with the Caseys and not Union Bank. The Caseys stopped paying Swinerton and Union Bank, and Swinerton recorded a mechanic’s lien on the Caseys’ property for $150,932.93 for materials and labor. Although Swinerton offered to release the lien in exchange for the $74,000 reserved in the loan account, Union Bank refused, foreclosed on the property, and purchased the property to wipe out Swinerton’s mechanic’s lien. Because $104,472.68 remained in the Caseys’ loan account, Swinerton sued Union Bank and the Caseys for breach of contract and for an equitable lien on the account’s balance. The trial court imposed an equitable lien on the account’s balance. Union Bank appealed.
Rule of Law
Issue
Holding and Reasoning (Fleming, J.)
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