Bevis v. Terrace View Partners, LP, 244 Cal. Rptr. 3d 797 (2019)

Citation: Bevis v. Terrace View Partners, LP, 244 Cal. Rptr. 3d 797 (2019)
Parent Document: Bevis v. Terrace View Partners, LP, 244 Cal. Rptr. 3d 797 (2019)
Jurisdiction: California (state)
Effective Date: 2019-02-28
Original Source: https://www.courtlistener.com/opinion/6240337/bevis-v-terrace-view-partners-lp/ ↗

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Plaintiffs additionally argue that as to the plaintiffs who rented under written long-term lease agreements, defendants breached the implied covenant of good faith and fair dealing by failing to exercise their sole discretion under paragraph 11.3 of the leases in an objectively reasonable manner. As noted, paragraph 11.3 provides that if the buyer of a mobilehome in the park intends to leave the home in the park, the seller must assign and the buyer must assume the written lease agreement, subject to the park's approval. However, the park has the right to terminate the lease (and offer a new lease with lower rent) or refuse to allow an assignment of the lease. Plaintiffs argue that defendants breached the implied covenant of good faith and fair dealing by offering buyers of park-owned homes new leases with lower, affordable rent while requiring buyers of resident-owned homes to assume the seller's lease *819with unaffordable high rent, which resulted in residents' being unable to sell their homes. In plaintiffs' words, defendants "exploited their absolute discretion under the rental agreements and leases to give themselves an unfair competitive advantage at [plaintiffs'] expense."12 Thus, plaintiffs argue that because defendants had unilateral discretion under paragraph 11.3 of the written leases to offer buyers of plaintiffs' homes lower rent that would enable plaintiffs to sell the homes but refused to do so, they were in breach of the implied covenant of good faith and fair dealing under the reasoning of Automatic Vending.

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