California National Bank v. Woodbridge Plaza LLC

This appeal involves interpretation of a provision dealing with calculation of rent for the extended term of plaintiff California National Bank’s lease of premises owned by defendant Woodbridge Plaza LLC. The language in question provides plaintiff’s new rent, to “be at the then prevailing rate,” is not to exceed rent paid by a competitor bank or “successor” in the same shopping center. At the time of plaintiff’s extension, however, the competitor was defunct and its space had been divided and leased to six smaller, nonbank tenants. The court found “successor” meant successor in interest and since there was none, ruled that plaintiff was required to pay the prevailing rate paid by nearby financial institutions as calculated by defendant’s expert witness.

Plaintiff contends the provision in question was not ambiguous and required no interpretation but that instead “successor” plainly meant successor to the space, not a successor bank. On that basis, then, rent should have been limited to a blended rate of the rent paid by all six “successor” tenants. It also maintains that if the judgment is reversed, the award of attorney fees to defendant should be reversed as well and…