Wins

GMSR’s client agreed to buy a warehouse, but closing was extended due to the seller’s repeated delays in recording a subdivision map.  Patiently waiting, the buyer agreed to lease the property pending recordation and invested millions of dollars in improvements.

During the ensuing two-year delay, the state tightened environmental regulations and the property’s market value increased.  When the seller advised that the map was recorded, the buyer replied that under the new regulations, its purchase lender required a minor soil test.  The seller refused to permit the test.  The buyer asked for some reasonable additional time to obtain alternative financing or cash.  The seller refused.

The buyer sued for breach of the implied covenant of good faith, demanding specific performance of the sale agreement and conveyance of title.  The trial court granted summary judgment to the seller and awarded $800,000 in attorney’s fees.  The buyer appealed.

Soon, the seller terminated the lease and sued to evict GMSR’s client.  But GMSR obtained a writ of supersedeas staying eviction under Code of Civil Procedure section 916, successfully arguing that the automatic appellate stay barred any eviction while the implied-covenant claim, and title to the property, were disputed on appeal.

Months later, the Court of Appeal unanimously reversed.  Adopting GMSR’s arguments, the court held that the buyer was not prohibited from conducting the test and a jury could find the seller “operated in bad faith and attempted to take advantage of” the buyer.  The court reversed the $800,000 fee award and ordered trial on the implied‑covenant claim.

Click here to read the Court of Appeal’s opinion:  DRAKK Holdings, LLC, v. PSIP SN Vermont LLC (June 23, 2026, No. B343318) 2026 WL 1802089 [Second District, Division Two].