Kaufman & Broad Building Co. v. City & Suburban Mortgage Co.

This is an appeal from a judgment entered pursuant to a directed verdict in favor of defendant. Plaintiff sought declaratory relief and damages for breach of a contract to provide loans for the purchase of homes constructed and marketed by plaintiff.

Plaintiff and appellant, Kaufman and Broad Building Company (hereinafter referred to as “K and B”), is one of the largest subdividers and builders of low and medium priced houses in California.

Defendant and respondent, City & Suburban Mortgage Company, is a mortgage banker and correspondent for various large institutional investors.

In early 1966, K and B was developing a “model complex” in Huntington Beach given the advertising name “Shorecrest.” In order to market the several hundred homes in Shorecrest, K and B sought forward loan commitments from institutional investors. Once K and B obtained these commitments it would in turn offer full home financing to its customers. It was contemplated by K and B that a substantial number of these home-buyer loans would be FHA or VA guaranteed.

On May 24, 1966, Eli Broad and Eugene S. Rosenfeld, representatives of K and B, met with James A. Edmonds, Jr., president of City &…