Downtown Sunnyvale Residential v. Wachovia Bank Nat. Assn.
In 2007, Wachovia Bank, N.A. (Wachovia) provided a loan of approximately $109 million to a limited liability company, Downtown Sunnyvale Mixed Use, LLC (DSMU),[1] which intended to use the funds to develop a combined retail, residential and commercial property in downtown Sunnyvale, California. Two years later, there was a default and the partially-completed project was abandoned. Wachovia filed an action for judicial foreclosure and secured the appointment of a receiver. At one point, Wachovia obtained court approval to have the receiver market and sell the property independent of the foreclosure proceedings. Minority investors in DSMU objected to this turn of events and informed Wachovia that its conduct violated the one form of action and security first rules set forth in Code of Civil Procedure section 726.[2] The minority investors filed a cross-complaint against Wachovia alleging violations of section 726 along with various torts including fraudulent concealment, misrepresentation and interference with contract. Wachovia brought a special motion to strike the cross-complaint pursuant to the provisions of California’s anti-SLAPP[3] statute (§ 425.16). The trial court granted the motion and dismissed the cross-complaint.
We shall affirm.
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