GECCMC 2005-C1 Plummer Street Office Limited Partnership v. NRFC NNN Holdings

—NRFC NNN Holdings, LLC (Northstar), appeals from a judgment holding it liable as a guarantor on a loan in favor of GECCMC 2005-C1 Plummer Street Office Limited Partnership (Plummer) and a post-judgment order awarding Plummer attorney fees and costs. We conclude that as a matter of law the guaranty was not triggered. Therefore we reverse the judgment and the postjudgment order.

*1000 FACTS AND PROCEEDINGS BELOW

Plummer lent $44 million to a borrower. 1 Borrower used the money to purchase two commercial properties in Chatsworth. Borrower leased these properties under two leases to Washington Mutual Savings and Loan as the sole tenant. The loan was a nonrecourse loan, secured by the properties and certain other enumerated items but not by the assets of Borrower in general, subject to exceptions for certain forms of borrower misconduct. In addition, Northstar, an affiliate of Borrower, executed a guaranty that would be triggered by the same forms of borrower misconduct that triggered the exceptions to the nonrecourse character of the loan. The guaranty provided in relevant part that “[t]he Loan shall be fully recourse to Guarantor, and Guarantor hereby unconditionally and…