Burlington Coat Factory of Cal. v. Bella Terra Associates, LLC (Nov. 26, 2008, G039699) 2008 WL 5058624 [nonpublished opinion]

GMSR obtained a reversal of a judgment against a commercial tenant in a dispute over the interpretation of a real estate tax provision in the tenant’s lease. The trial court had found the provision unambiguous in requiring the tenant to pay a multiple of future tax increases.

GMSR successfully argued that the language was reasonably susceptible to a more limited interpretation and that the implied covenant of good faith and fair dealing imposed a duty on the landlord not to unreasonably allow taxes to be increased where, under the landlord’s reading of the lease, such an increase would increase the landlord’s profit. The Court of Appeal also reversed summary judgment against the tenant on the landlord’s claim that it was a bona fide purchaser from the tenant’s original landlord and therefore not bound by the parties’ prior course of dealing that was different than the landlord’s lease construction would have yielded.

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