Miscione

*1323 Opinion

Plaintiff John J. Miscione (Miscione), as a successor landlord, filed an action for breach of an office lease and fraud. Defendant Barton Development Company (Barton Development) was the tenant under the lease and defendant James E. Barton (Barton) was alleged to be liable as an alter ego of the tenant. Defendants filed a motion for summary judgment contending the lease was subordinate to a prior trust deed on the property, and the foreclosure of the trust deed had extinguished the lease. The trial court granted summary judgment. Plaintiff appeals and contends that: (1) the general rule that foreclosure of a trust deed extinguishes a subordinate lease does not apply in this case; and (2) the defendants attorned to the new landlord by contractually agreeing to be bound by the lease. We agree and reverse.

Factual and Procedural Background

Defendant Barton, as general partner, formed Rancho Cucamonga Business Park Equities I (Equities I) to develop real property. Equities I constructed an office building known as Barton Plaza and thereafter borrowed $7.6 million from Coast Federal Savings (Coast). Equities I gave, as security for the loan, a trust deed to Coast. The…

I dissent.

I agree with the majority that (1) the nonjudicial foreclosure of a trust deed extinguishes a subordinate lease and (2) the lender did not exercise an option to obtain a subordination agreement that would change this result by making the lease senior to the deed of trust.

I disagree with the majority’s conclusion that there was nevertheless a subordination agreement here because (1) the lease contained an attornment clause and (2) the lender requested payment of rent to it after the foreclosure.

I agree with the trial court that the lease, including the attornment clause, was extinguished by the foreclosure sale by operation of law, leaving the tenant on a month-to-month tenancy.

*1333 1. The General Rule Is That a Junior Lease Is Automatically Extinguished by a Nonjudicial Foreclosure.

In my view, the trial court properly relied on Dover Mobile Estates v. Fiber Form Products, Inc. (1990) 220 Cal.App.3d 1494 [ 270 Cal.Rptr. 183 ]. That case succinctly states the applicable general principles: “Title conveyed by a trustee’s deed relates back to the date when the deed of trust was executed. [Citation.] The trustee’s deed therefore passes the title held by the trustor…

Plaintiff John J. Miscione (Miscione), as a successor landlord, filed an action for breach of an office lease and fraud. Defendant Barton Development Company (Barton Development) was the tenant under the lease and defendant James E. Barton (Barton) was alleged to be liable as an alter ego of the tenant. Defendants filed a motion for summary judgment contending the lease was subordinate to a prior trust deed on the property, and the foreclosure of the trust deed had extinguished the lease. The trial court granted summary judgment. Plaintiff appeals and contends that: (1) the general rule that foreclosure of a trust deed extinguishes a subordinate lease does not apply in this case; and (2) the defendants attorned to the new landlord by contractually agreeing to be bound by the lease. We agree and reverse.

Defendant Barton, as general partner, formed Rancho Cucamonga Business Park Equities I (Equities I) to develop real property. Equities I constructed an office building known as Barton Plaza and thereafter borrowed $7.6 million from Coast Federal Savings (Coast). Equities I gave, as security for the loan, a trust deed to Coast. The trust deed was recorded January…