Grosvenor Clift Assoc. v. Apollo Real Estate Inv. Fund

Filed 7/14/06 Grosvenor Clift Assoc. v. Apollo Real Estate Inv. Fund CA1/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION THREE

Grosvenor Clift Associates (Grosvenor) timely appeals from a judgment entered in favor of Apollo Real Estate Investment Fund (Apollo), after the trial court granted Apollo's motion for summary judgment.[1] This appeal is about contractual provisions contained in a series of written agreements, entered into between 1995 and 1999, which transferred ownership and other interests in the Clift Hotel in San Francisco. We conclude the trial court misinterpreted these provisions and incorrectly found that Grosvenor had assigned its rights to certain payments with respect to Apollo. We further conclude that Grosvenor's filing of a claim in a related bankruptcy proceeding does not preclude this action. We thus reverse.

BACKGROUND[2]

A. Grosvenor's Complaint.

Grosvenor owned the Clift Hotel in San Francisco. In this action for breach of contract, Grosvenor sued Apollo for its failure to honor a written guaranty of the obligations of a third entity, AP Clift Hotel Associates, L.P. (AP Clift). Grosvenor alleges in its complaint filed November 24, 2003 that AP Clift breached a contract by failing to pay Grosvenor certain fees in connection with Grosvenor's sale of the Clift Hotel to AP Clift. Grosvenor also alleges Apollo guaranteed AP Clift's payment of these fees to Grosvenor, and that Apollo refused to pay the sums it guaranteed in breach of the applicable contract. Grosvenor alleges damages of $675,000, and also seeks attorneys' fees and costs from Apollo.

B. The February 16, 1995 Extension Agreement.

In 1995, Grosvenor and AP Clift entered into an Amended and Restated Extension Agreement dated February 16, 1995 (Extension Agreement). Pursuant to section 6(d) of the Extension Agreement, in consideration for Grosvenor's services as a consultant to AP Clift, AP Clift promised to pay Grosvenor $25,658 per quarter from May 1, 1995 through August 2, 2004 (Consulting Payments).[3]

C. The November 20, 1998 Exchange Agreement.

In 1998, Grosvenor, AP Clift and Apollo entered into the Exchange Agreement dated November 20, 1998 (Exchange Agreement). The purpose of the Exchange Agreement was to allow Grosvenor to sell the Clift Hotel to AP Clift â€