Yashouafar
U.S. Bank National Ass'n v. Yashouafar
Opinion
Opinion
Mosk, J.
INTRODUCTION
Plaintiff and respondent U.S. Bank National Association brought an action to enforce a guaranty and indemnity agreement (Guaranty) that defendants and appellants Massoud Yashouafar and Solyman Yashouafar signed in favor of plaintiff’s predecessor in interest for the outstanding obligations owed by the borrowers on a promissory note (Note). The trial court granted plaintiff’s motion for summary judgment. On appeal, defendants contend that the trial court used the wrong date in calculating a prepayment fee (or yield maintenance amount) for borrowers’ prepayment of the Note’s indebtedness. Alternatively, defendants argue that if the trial court used the correct date in calculating the prepayment fee, then the prepayment fee was an unenforceable penalty.
We hold that even though the legal issue was not raised before the trial court, the documents should be interpreted so that the prepayment obligation only accrues upon payment and not upon acceleration of the Note. Accordingly, we reverse and remand the matter to the trial court for a recalculation of the prepayment fee, if any.