Fait v. New Faze Development, Inc.
California Court of Appeal
143 Cal. Rptr. 3d 382 (2012)
New Faze Development, Inc. (New Faze) (defendant) borrowed money to buy property with an occupied, well-maintained building on it, giving Donna Fait (plaintiff) a deed of trust securing the loan. New Faze demolished the building to clear the way for a planned mixed-use development, then defaulted on the loan. Fait foreclosed and sued for the damage the demolition caused to the property's value. The trial court granted summary judgment to New Faze, reasoning that New Faze acted in good faith, believing development would increase the property's value, rather than recklessly or with intent to despoil it.
Whether the grantor of a security interest in real property is liable to the grantee for damages caused by the grantor's bad-faith waste of the property.