Atascadero Factory Outlets, Inc. v. Augustini & Wheeler LLP

*719 Opinion

Augustini & Wheeler LLP (A&W) appeals from a judgment in interpleader, entered after the trial court found that its lien for attorney fees was subordinate to the claims of two secured creditors. The trial court concluded that the doctrine of unjust enrichment, a recognized exception to the Uniform Commercial Code lien priority system, did not apply. (See Knox v. Phoenix Leasing Inc. (1998) 29 Cal.App.4th 1357 [ 35 Cal.Rptr.2d 141 ].) We affirm.

In 1994, Camino Real Fashion Outlets, Ltd. (Camino) borrowed $400,000 from Santa Lucia National Bank (Bank) to complete a mall project. Thereafter, Camino sold the mall to Atascadero Factory Outlets, Inc. (AFO) and agreed to pay the broker, Wallace Moir Company (Broker), a $250,000 commission. The sale generated no cash. Instead, Camino received a “Contingent Payment Obligation Note Secured By Deed of Trust” (note) estimated to be worth $3.5 million. The note provided that the sales price would be determined after the mall opened based on a formula that took into account construction costs, rents, operating expenses, and other items.

Camino assigned the note to Bank as security on the loan. Camino executed a pledge agreement…