South Bay Building Enterprises, Inc. v. Riviera Lend-Lease, Inc.

Introduction

Appellant South Bay Building Enterprises, Inc. (South Bay) and respondent Riviera Lend-Lease, Inc. (Riviera) are lending institutions. Each made loans to James Archer (Archer). Through deeds of trust, Archer gave each lender a security interest in his home in Palos Verdes Estates. Riviera recorded its security interest before South Bay. Riviera’s security interest was approximately $127,000 and South Bay’s was approximately $116,000.

Archer defaulted upon his obligations. Riviera exercised its rights as a secured lender and directed the holding of a nonjudicial foreclosure sale. At a sale held on February 4, 1992, Riviera was the only bidder. South Bay received no proceeds from that sale and its junior lien was extinguished. Riviera later sold the property.

South Bay brought suit against Archer, Riviera, the two owners of Riviera, and one of Riviera’s managers. South Bay alleged defendants had engineered a fraudulent scheme to acquire Archer’s property without having to pay South Bay.

At trial, South Bay’s evidence established that defendants postponed the foreclosure sale several times in order to preclude others from bidding against Riviera; that at the…