Lenders Should Contract for the Right to Recover Lost Goodwill Proceeds when Commercial Property is taken in Eminent Domain

By: Anthony J. Carucci

Business Goodwill Generally

In California, the “goodwill” of a business “consists of the benefits that accrue to a business as a result of its location, reputation for dependability, skill or quality, and any other circumstances resulting in probable retention of old or acquisition of new patronage.” Cal. Code Civ. Proc. § 1263.510(b). Put another way: “Goodwill is the amount by which a business’s overall value exceeds the value of its constituent assets, often due to a recognizable brand name, a sterling reputation, or an ideal location. Regardless of the cause, however, goodwill almost always translates into a business’s profitability.” People ex rel.Read More »

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Transfer of Property Title to a Holding Company Did Not Divest Landowner of Owner-Occupant Status Under A.R.S. § 33-1002(B)

By:  Richard G. Erickson

Recently, in Marco Crane & Rigging Co. v. Masaryk, 703 Ariz. Adv. Rep. 29 (Dec. 30, 2014), the Arizona Court of Appeals established that a subcontractor on a residential project has no lien rights against an owner-occupant, even though the homeowner transferred the property’s title to a holding company (an Arizona limited liability company) after the subcontractor commenced work.

In other words, the lien protections afforded to owner-occupants are determined, at the latest, when a contractor records its lien.  After the contractor commences work and records its lien, the homeowner’s actions in negating owner-occupant status do not divest the homeowner of statutory protections against lienholders. … Read More »

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General Contractor’s Prospective Waiver Of Its Lien Rights Is Enforceable In California

By: Lyndsey Torp

http://www.swlaw.com/attorneys/lyndsey_torp

In another decision favoring lenders (See http://www.swlaw.com/blog/real-estate-litigation/2014/08/29/arizona-supreme-court-to-contractor-sorry-but-equitable-subrogation-of-a-banks-later-deed-of-trust-trumps-earlier-mechanics-lien-rights/), the California Court of Appeal, in an opinion published in September 2014, entitled Moorefield Construction, Inc. v. Intervest Mortgage Investment Company, et al., D065464, held an original contractor can contractually waive or impair its own lien rights, even before it gets paid or performs work, as long as it does not waive or impair the lien rights of its subcontractors. In Moorefield, the court of appeal reversed a trial court’s decision awarding a general contractor $2.2 million on its mechanic’s lien.  In doing so, the court of appeal upheld a subordination agreement that the general contractor, Moorefield Construction, Inc., signed with the lender, Intervest Mortgage, “subordinating” the general contractor’s mechanic’s lien claim to the lender’s deed of trust, which was security for the construction loan.… Read More »

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Arizona Supreme Court to Contractor: Sorry But Equitable Subrogation of a Bank’s Later Deed of Trust Trumps Earlier Mechanics’ Lien Rights

By Rick Erickson

http://www.swlaw.com/attorneys/rick_erickson

The smoke has finally cleared in a hard and long-fought battle between a bank and contractor both claiming priority to foreclose millions of dollars on a Phoenix condominium project. The project, well-known as Summit at Copper Square in central Phoenix (“Summit”), went broke in 2007. The foreclosure case began in 2008, and the construction and real estate industries have been keeping a close eye on the outcome. In the end, the Arizona Supreme Court weighed in for its “first opportunity to address the interplay between equitable subrogation and the priority granted to mechanics’ liens by [Arizona Revised Statutes] § 33-992(A).”

The Arizona Supreme Court issued its decision in The Weitz Company L.L.C.… Read More »

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