Cases

Prometheus, a real estate developer, entered into an agreement with GMSR’s property-owner client that contemplated a residential development in Mountain View on the client’s property. Prometheus sued the property owner for breach of the implied covenant of good faith and fair dealing after the property owner elected not to help Prometheus remove a reciprocal parking easement attached to the property that would, if it remained in place, prevent the project from proceeding as planned. The property owner prevailed in a bench trial.

The Court of Appeal affirmed, holding that where a contract grants a party an express right to engage in specific conduct—as the court found this one did—courts cannot limit that right by way of the implied covenant. The court also held that because the agreement as a whole was supported by adequate consideration, the property owner’s right to choose between helping and not helping remove title exceptions did not render the agreement illusory.

Case Briefs

• California Court of Appeal Opinion - View Document