SCC Acquisitions, Inc. v. Central Pacific Bank
143 Cal. Rptr. 3d 711
Cal. Ct. App.2012Background
- Bank lent Fillmore Sun over $7.3 million for property acquisition and predevelopment costs; loan was one-year with interest-only payments and a maturity extension mechanism, extended five times to April 26, 2008; guarantors SCC Acquisitions, Inc. and Bruce Elieff guaranteed payment; after last extension, bank downgraded Fillmore Sun loan to substandard and set aside reserves; bank contemplated sale of its loans and in July 2008 sold Fillmore Sun loan to Gray 1 CPB, LLC; Gray 1 sued guarantors; appellants cross-claimed for rescission, fraud, and related remedies; jury found against appellants on cross-claims; trial proceeded in two phases with the first phase yielding a $9.1 million judgment against appellants in favor of Gray 1; second phase addressed remaining claims including alleged fraud by the bank regarding loan extensions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the First Instruction misstated law on concealment and duty to disclose | SCC argued the instruction misrepresented duty to disclose | Bank argued instruction correctly stated law | Instruction proper; did not misstate law |
| Whether the Second Instruction correctly limited term sheet as non-binding | Appellants claimed term sheet could be misrepresented as binding | Bank argued term sheet was not a commitment or promise on its face | Instruction proper; term sheet not a binding commitment or misrepresentation on its own |
Key Cases Cited
- Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC, 162 Cal.App.4th 858 (Cal. Ct. App. 2008) (duty to disclose arises from conduct or relationship, not mere policy)
- Thrifty-Tel, Inc. v. Bezenek, 46 Cal.App.4th 1559 (Cal. Ct. App. 1996) (implied misrepresentation may arise from conduct like use of another’s access code)
- Doppes v. Bentley Motors, Inc., 174 Cal.App.4th 967 (Cal. Ct. App. 2009) (attorney conduct and representation issues; appellate posture referenced)
- Cole v. Patricia A. Meyer & Associates, APC, 206 Cal.App.4th 1095 (Cal. Ct. App. 2012) (attorney conduct and procedural posture in appellate review)