Wins

Court of Appeal Reverses Judgment And Injunction Order, Holding That Lease Triggers GMSR Clients’ Property Purchase Rights

GMSR’s clients, the Claremont Colleges, sought enforcement of the buy-back terms in a 1957 land sale agreement with the Claremont School of Theology (CST). In the 1957 agreement, CST promised that the land would be used for educational purposes only, and if CST ever wanted to “sell or transfer” it, the Colleges could buy it back for the original sale price plus some limited adjustments. After CST sued to cancel the repurchase right, the trial court rewrote the agreement and entered a judgment directing that if CST found an educational institution willing to buy at fair market value, the Colleges could only buy the land by meeting that price.

While the Colleges’ appeal of that ruling was pending (see first appeal), CST executed a 21-year lease with an alleged real estate developer tenant and granted the tenant conditional rights to purchase the land. The Colleges filed a new lawsuit, claiming that the lease triggered their purchase rights under either the 1957 agreement or the rewritten buy-back terms in the judgment. The Colleges also moved for a preliminary injunction cancelling the lease and preventing the tenant from taking possession of the property or altering it.

The trial court denied the injunction and sustained CST’s demurrer without leave to amend, ruling that the lease was not a “transfer” triggering any purchase rights. The Court of Appeal unanimously reversed both rulings, holding that the trial court erroneously construed the 1957 agreement and the lease “is a transfer that triggers” the Colleges’ purchase rights.

This is GMSR’s third appeal, and third successful reversal, in this matter. (See first appeal and second appeal.)

Court of Appeal Opinion – View Document