Cooper

Appellants Ronald I. Cooper and Ellen M. Cooper challenge summary judgment in favor of respondent WRI Opportunity Loans II, LLC (WRIO), in its action for payment of a loan guaranteed by appellants. We reverse.

FACTUAL AND PROCEDURAL BACKGROUND

There are no material disputes about the following facts: In 1999, the Coopers were the sole principals in Cooper Commons, LLC (CC), which planned to build residential townhouses and condominiums on a property in West Hollywood. According to the budget for the project, the property was purchased for $5,979,066, and CC expected that the units, when completed, would sell for a total of $25,762,005. The senior and junior secured lenders on the project were, respectively, Comerica Bank—California (Comerica) and WRIO.

In November 1999, WRIO loaned $2,490,000 to CC. Under the loan documents, the loan matured in March 2002, and interest on the principal balance accrued at a rate equal to 2.0 percent above a reference rate set by the Bank of America (reference rate). The loan documents also contained provisions that accorded WRIO “additional interest.” These provisions entitled WRIO to 4.0 percent of the gross sales price of each unit…