Peram

Peram, a California limited partnership, appeals the trial court’s judgment in favor of Chumash Hill Properties, Inc. (Chumash) on Chumash’s complaint against Peram, as well as appealing the court’s dismissal of Peram’s cross-complaint against Chumash. We conclude the trial court properly determined Chumash’s subleasehold survived its sublessor’s rejection of the primary lease in bankruptcy, preventing the landlord Peram from regaining possession of the subleased property.

Peram owns the subject real property consisting of approximately 26 acres in San Luis Obispo County. Five acres of the property is improved with a bar and restaurant and paved parking. The remaining 21 acres are substantially unimproved.

Peram originally leased the property to Climate One, Inc., which assigned its interest in the lease to Daphne’s, Ltd. Daphne’s subleased the property to Chumash in 1984 pursuant to a written sublease. Prior to this, Daphne’s had executed a note in favor of Carson Wayne Newton secured by a deed of trust against the improvements Daphne’s had made on Peram’s property. In 1987, Newton obtained a judgment of foreclosure on the deed of trust which allowed him to take over…