Landbank Development v. 26 Tierra Subida CA2/1

BACKGROUND

A. Landbank’s purchase of the property Landbank is engaged in the business of landbanking, which involves investing in undeveloped real property in areas of anticipated development and later selling the real property for profit. On August 28, 2007, Landbank, as the buyer, and Tierra and Foothills as the sellers, entered into a written purchase and sale agreement (Purchase Agreement) for the purchase of approximately 153 acres of raw land divided among four parcels located ―at the intersection of 110th Street West and Avenue ‗J‘‖ in Palmdale, California (Property).

2 Article III, section 9.7 of the Purchase Agreement (Disclosure Provision) provided: ―Litigation. Except as otherwise disclosed in the Due Diligence Items or any other information delivered to Buyer, there is no litigation, arbitration, or other legal or administrative suit, action, proceeding or investigation of any kind pending or threatened in writing against or involving Sellers relating to the Property or any part thereof, including, but not limited to, any condemnation action relating to the Property or any part thereof.‖ (Underscoring omitted.) The purchase price for the Property was $3.2 million.…