SAN DIEGO WATERCRAFTS, INC. v. Wells Fargo Bank

In reversing a summary judgment against the assignee of a lease, we hold that the court erred in considering evidence in support of the motion which was first submitted with the moving party's reply. Additionally, there are triable issues of material fact as to whether a "right of first refusal" was satisfied.

Defendant and respondent Wells Fargo Bank, N.A., as trustee of the Corinne Franklin trust (landlord), leased property to Brittain, Inc. (tenant), which is not a party to these proceedings. Later, tenant assigned the lease to plaintiff and appellant San Diego Watercrafts, Inc. (assignee). The lease contained a right of first refusal in favor of tenant. Assignee complains of landlord's failure to honor this right before selling the property to another entity. The trial court determined that landlord's duty to offer the property to tenant (and hence to assignee) was satisfied and thus ceased to exist when, before the assignment of the lease, tenant declined to purchase the property.

The relevant portion of the lease is entitled "Right of Negotiation to Purchase Project" and requires that before offering to sell to or accepting an offer to buy from a third…