San Leandro Land v. Nicholas K. Corp. CA1/2

BACKGROUND

This litigation is about a side agreement to a stock purchase agreement. The stock purchase agreement effected a sale of a Ford dealership from one individual owner to another, and the side agreement, between business entities, effectively added to the amount of rent called for under a ground lease. The stock purchase agreement was not sued upon in this litigation, but provides context for the side agreement. Tim Paulus and Robert Knezevich executed the stock purchase agreement on February 7, 2008, in their individual capacities, effectuating a sale of all of Paulus’s shares of stock in The Ford Store to Knezevich, as new owner, who also owned and operated another Ford dealership, Hayward Ford. Paulus Enterprises held a 25-year lease of The Ford Store premises and, in 2002, had secured a dealership sublease of the premises from primary tenant Ford Leasing Development Company (Ford Leasing). The stock purchase agreement referenced exhibits that included, as Exhibit I, the side agreement. One of many seller’s conditions precedent to closing was that “Buyer shall have executed that certain Side Agreement between Corporation [i.e., San Leandro Ford] and San Leandro Land,…