Wins

Jan 21, 2020 Meehan Rasch, Edward L. Xanders (Ted) Real Property
Court of Appeal reverses judgment against GMSR’s client, and holds good faith purchasers are not bound by irrevocable licenses

In a published opinion, the Court of Appeal reversed a judgment against GMSR’s client and directed the trial court to enter judgment in its favor.  GMSR’s client purchased a commercial warehouse property in 1994 without actual or constructive notice of an unrecorded 1950 agreement that allowed the neighboring property owner to use eight parking spaces.  In 2013, the current neighboring property owner learned of the 1950 agreement for the first time from the municipal Building and Safety office, when seeking to construct a warehouse expansion.  The neighboring owner sued GMSR’s client on the theory that an “irrevocable license” created in 1950 between the original property owners was binding on all successors, even those purchasing without actual or constructive notice.  The trial court relied on language in Noronha v. Stewart (1988) 199 Cal.App.3d 485 (Noronha) that notice is not required for an irrevocable license to bind successors in interest.  The Court of Appeal reversed, agreeing with GMSR’s explanation that the “[t]he analysis in Noronha is flawed” and that Supreme Court precedent and longstanding real property principles confirm that an irrevocable license is only binding on successors who purchase with actual or constructive notice of the license.

California Court of Appeal Opinion – View Document