BACC

This case presents the question of whether a tenant who takes an assignment of a mortgaged ground lease, expressly assuming its obligations, remains liable to the lessor after foreclosure of the mortgage. Vallely Investments, L.P. (Vallely), the lessor, sued for a declaration that BancAmerica Commercial Corporation (BACC), the assignee, was bound by the lease. Vallely argues the trial court erred in granting summary judgment in favor of BACC, and it should have granted Vallely’s own motion for summary judgment. We agree, and reverse with directions that judgment be entered in favor of Vallely.

The material facts are not in dispute. Vallely owns a parcel of property in Newport Beach. In 1978, Vallely entered into a long-term ground lease with a developer. Following a series of assignments, the lease ended up in the hands of Balboa Landing, L.P. (Balboa). In 1986, Vallely and Balboa amended and restated the lease, providing, among other things, that its term would expire in 2051.

The lease permitted the lessee to transfer or assign its interest freely, or to encumber it with a mortgage. Any assignment had to be in writing, with notice to the lessor. The assignee was…