Gramercy Investment Trust v. Lakemont Homes Nevada, Inc.

Following a foreclosure proceeding which resulted in a deficiency, plaintiff Gramercy Investment Trust (Gramercy) sued to recover the unpaid balance of a real estate mortgage loan, naming as defendants Lakemont Homes Nevada, Inc., and Lakemont Communities Nevada, LLC (collectively referred to as Lakemont), who were the guarantors of the loan. Gramercy made a motion for summary judgment for the full balance of the unpaid loan, approximately $31 million, without adjusting for the fair market value of the property following the collapse of the real estate market. The trial court granted the motion for summary judgment and Lakemont appeals.

On appeal, Lakemont argues that the trial court failed to adhere to the choice of law provision contained in the guaranty agreement in applying California law. We affirm.

BACKGROUND

Fiesta de Vida, LLC, owned real property located in Riverside County which was to be developed by FDV Investment LLC. In order to obtain financing for the project, title to the property was transferred to FDV Investment LLC (the borrower). The borrower was an entity managed by Lakemont Homes, Inc., a California corporation. On March 30, 2007, Gramercy lent…