The California Court of Appeal, Second Appellate District, upheld the validity of a trial court’s finding that Early Sullivan client Sun West Mortgage Company, Inc. prevailed on claims of breach of contract and indemnity against First Alliance Home Mortgage, LLC (First Alliance). The matter was handled at trial and on appeal by Early Sullivan attorneys Scott Gizer and Diane Myint Luczon.
First Alliance had issued a loan to a borrower to refinance an investment property. First Alliance then sold the loan to Sun West, which in turn sold the loan to Fannie Mae. When it was determined that the borrower lacked sufficient cash reserves to satisfy Fannie Mae’s guidelines, Fannie Mae demanded that Sun West repurchase the loan. Pursuant to an agreement that governed Sun West’s initial purchase of the loan from First Alliance, Sun West demanded that First Alliance repurchase the loan from Sun West. First Alliance refused.
On appeal, First Alliance argued that the trial court erred in: (1) ordering specific performance of the parties’ agreement by requiring First Alliance to repurchase the loan instead of awarding ordinary contract damages to Sun West; (2) awarding excessive attorney fees and costs (3) selecting a prejudgment interest rate of 10 percent instead of the 4.5 percent rate applicable to the underlying loan; and (4) applying that 10 percent interest rate to the repurchase price rather than what First Alliance contends are Sun West’s actual damages.
On the facts and procedural background pertinent to the appeal, the Court of Appeal affirmed the trial court’s order finding the relief granted to Sun West was properly prayed for in the Complaint, the amount of fees awarded were appropriate based on the relief obtained, and that the prejudgment interest awarded was correct.