CARMA DEVELOPERS (CALIFORNIA), INC., Plaintiff and Appellant, v. MARATHON DEVELOPMENT CALIFORNIA, INC., Defendant and Appellant., 2 Cal. 4th 342

Summary

Plaintiff lessee and defendant lessor entered into a commercial lease, which included a provision prohibiting lessee from subletting or assigning without consent of lessor and retaining a termination and recapture clause upon notice by lessee of intent to sublet or assign. Plaintiff gave notice of intent to sublease and defendant exercised its right of termination and recapture. Plaintiff vacated the premises and sued defendant for damages for breach of contract and breach of the covenant of good faith and fair dealing. The trial court found that a reasonableness standard must be read into the termination and recapture clause, and found that defendant breached the reasonableness term and the covenant of good faith and fair dealing. A jury awarded plaintiff damages but found for defendant on claims of interference with prospective advantage. Both parties appealed, the appeals court affirmed, and the parties appealed that determination. The court reversed and ordered that judgment be ...