Freedom Financial Thrift & Loan v. Golden Pacific Bank

Plaintiff and appellant, Freedom Financial Thrift & Loan (Freedom), appeals from a judgment of dismissal following the sustaining of a demurrer to its original complaint filed by defendant and respondent, Golden Pacific Bank (Golden). This case presents the issue whether a second lending institution, not a party to the original loan, can be responsible for a deficiency in the payoff of the original loan when the first lender’s payoff statement inadvertently understated the amount required to retire the loan. The trial court held under Civil Code section 2943 the borrower was exclusively responsible for the balance due. We affirm.

Facts and Proceedings Below

On October 29, 1992, Freedom filed an action against Golden and the debtors on the loan, Quality Striping, a general partnership, and its individual partners. The complaint alleged causes of action for breach of contract, breach of written guarantee, account stated, open book account, conversion, declaratory relief, reformation, specific performance, and cancellation of a written instrument. Because this case is before the court after the sustaining of a demurrer without leave to amend, the following facts are taken…