SHERWOOD PARTNERS, INC., Plaintiff and Appellant, v. EOP-MARINA BUSINESS CENTER, L.L.C., Defendant and Respondent., 153 Cal. App. 4th 977

Summary

The lease contained an attorney fee provision. The assignor defaulted under the lease by failing to pay rent and other charges. Shortly thereafter, the assignor made a general assignment for the benefit of creditors, and the assignee surrendered possession of the leased property. The landlord withdrew almost all of the security deposit to pay rent and other charges. The court held that the assignee was not personally liable for the award of costs and attorney fees because it did not assume its assignor's liabilities under the lease agreement. Although the assignee initially sought to recover attorney fees pursuant to the fee provision in the lease, the record showed that the assignee sought to recover attorney fees for the benefit of the assignor's creditors, not in its own right. An assignee for the benefit of creditors had a duty to marshal and protect the assets of its assignor, which could include filing and defending lawsuits. The court noted that imposing underlying contractual ...