Plaintiffs sought review of an order of the Superior Court of Los Angeles County (California) dismissing their complaint and sustaining defendants’ demurrers.
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Overview
Defendants entered into a master lease agreement with the county for publicly owned buildings. The master lease agreement provided that defendants would lease the apartments and charge rents that were “fair and reasonable.” Plaintiffs sued claiming that they were intended third-party beneficiaries under the master lease agreement and arguing that they were paying rents that were higher than what was fair and reasonable. Plaintiffs sought damages equal to the amount of any excess rents actually paid. The trial court sustained defendants’ demurrers and dismissed the complaint. The court affirmed. Even assuming that plaintiffs were intended third-party beneficiaries under the master lease, plaintiffs could not assert rights greater than those of the promisee (the county) under the lease. Part of the lease agreement provided that the county would approve all rental rates. For plaintiffs to seek retrospective relief and claim the right of reviewing all rental rates, notwithstanding a prior determination by the county that the rents were fair and reasonable, was to arrogate a right that had no basis in the master lease.
Outcome
The order dismissing plaintiffs’ complaint and sustaining defendants’ demurrers was affirmed because, even if plaintiffs were intended third-party beneficiaries, they could not assert rights greater than those of the promisee under the contract.
