Pico Rivera First Mortgage Investors v. Aguila CA2/6

FACTS

TAI owned real property in Pico Rivera, California (the Property). Aguila is the sole owner of TAI. The Property had been leased for use as a nightclub and restaurant. In 2015, the Drug Enforcement Agency seized the liquor license because the tenant was using the Property to launder money for a Mexican drug cartel. The business’s conditional use permit (CUP) was revoked, and the business was shut down. The Department of Alcoholic Beverage Control (ABC) refused to issue a new liquor license until the city issued a new CUP. Aguila began work to obtain a new CUP. Loan and Foreclosure In July 2015, TAI obtained a loan of $5.7 million from Pico Rivera First Mortgage Investors, LP (First Mortgage). The loan was secured by a trust deed that encumbered the Property. Aguila personally guaranteed the loan in writing. TAI failed to make payments on the loan, and First Mortgage began foreclosure proceedings in August 2017. On

2 December 6, 2017, a non-judicial foreclosure sale was conducted, and First Mortgage became the Property’s owner. Underlying Litigation In October 2018, First Mortgage filed an action against Aguila for breach of his personal guarantee of the loan. Aguila, a…