Pacific City Bank v. Los Caballeros Racquet & Sports Club, Ltd.

Pacific City Bank appeals denial of their petition for relief from forfeiture. (Code Civ. Proc., § 1179.)

In October 1978, Los Caballeros Racquet & Sports Club, Ltd. (Los Cab) as lessor and American National Volleyball Association (ANVA) as lessee entered into a written 20-year lease. All improvements became the property of Los Cab, subject only to the lease. No assignment could be made without prior written consent of Los Cab and no lien or claim was to attach to the premises.

In late 1979 and early 1980, Pacific loaned ANVA $190,000 and in March of 1980, Pacific recorded a deed of trust on ANVA’s leasehold interest. No written consent was requested of or given by Los Cab.

In the fall of 1980 Pacific became aware of ANVA’s financial difficulties. In an attempt to preserve its security interest in the leasehold, Pacific discussed the matter with Los Cab, offering to bring ANVA’s delinquencies current. Los Cab invoiced Pacific for the amounts due and owing from ANVA. Although a check in that amount was drawn, Pacific then received notice of filing of a voluntary petition in bankruptcy (chapter 7) by ANVA on January 13, 1981, and did not remit the check to Los Cab.…