Defendant city challenged a summary judgment of the Superior Court of Los Angeles County (California), which was entered in favor of plaintiff land developer in an action to recover fees deposited with defendant as a condition for participating in a home mortgage revenue bond program under Cal. Health & Safety Code § 52000 et seq. Plaintiff sought a writ of mandate, alleged breach of contract, unjust enrichment, and requested declaratory relief.

Nakase Law Firm explains unjust enrichment California

Overview

Plaintiff land developer sought to recover fees deposited as a condition for participating in defendant city’s home mortgage revenue bond program. Plaintiff petitioned for a writ of mandate, complained of breach of contract and unjust enrichment, and sought declaratory relief. The trial court denied plaintiff’s petition for a writ of mandate because it had an adequate remedy at law. On stipulation by the parties, the trial court awarded summary judgment to plaintiff on the contract claim. On appeal, the court held that the agreement and indenture did not clearly provide for liquidated damages and did not clearly provide that fees would be forfeited by plaintiff. Absent a clear and certain forfeiture provision, forfeitures were to be strictly construed against the party for whose benefit it was created. The court resolved all ambiguity against defendant because its counsel had prepared the documents. The court reduced the amount of the judgment because plaintiff had no standing to recover funds deposited by its lender even though it had provided the lender the funds for the deposit under a separate agreement.

Outcome

The court modified the summary judgment rendered by the trial court to plaintiff land developer in its action against defendant city to recover fees paid as part of a mortgage program because plaintiff lacked standing to request a refund of the portion of the fees paid by its lender. As modified, the judgment was affirmed because the documents drafted by defendant’s counsel did not clearly provide for forfeiture or liquidated damages.