Procedural Posture

Appellant computer lessor sought relief from decisions of the Superior Court of Los Angeles County (California), granting summary adjudication and nonsuit to appellee computer user in its action for breach of contract, conversion, and unjust enrichment relating to the sale of equipment to appellee by a third party lessee.

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Overview

Appellant computer lessor leased a system to a lessee which, in turn, sold it to appellee computer user under an asset purchase contract that neglected to assign the underlying lease. Appellant sought damages for breach of lease, conversion, and unjust enrichment. The trial court granted appellee’s motion for summary adjudication on the breach of lease, and granted appellee’s motion for nonsuit on the remaining issues after opening arguments. The court held on appeal that as appellee presented no evidence showing that it did not intend to assume the lease obligation, the evidence failed to support the summary adjudication and deprived appellant of a viable theory of its case as presented in its opposition. The court also held that nonsuit for conversion was unwarranted as the opening statement presented facts that appellant was entitled to possession at the time of conversion; it was irrelevant that appellant later regained possession. The nonsuit for unjust enrichment was likewise unwarranted as the evidence established that appellee was enriched by the value of the usage exceeding its lease payments and that the enrichment was unjust as appellant lacked knowledge of the benefit.

Outcome

The judgment was reversed and the trial court orders were vacated, because the evidence presented triable issues of fact relating to appellee computer user’s assumption of the lease and appellant computer lessor’s opening statement established that it was entitled to possession at the time of conversion and that appellee received financial benefits without appellant’s knowledge or consent.