D & M Financial Corp. v. City of Long Beach

In D & M Financial Corp. v. City of Long Beach (2006) 136 Cal.App.4th 165 the lender held a deed of trust with an assignment of miscellaneous proceeds nearly identical to the assignments at issue in this appeal. (Id. at p. 177.) The court described the provision as assigning "a right to recover an inverse condemnation judgment" and thereby giving the lender "a sufficient ownership interest" in the real property to bring an inverse condemnation action. (Ibid.) The determination the lender's interest was sufficient to bring the inverse condemnation action does not establish the borrower no longer owned any right to pursue litigation. In D & M Financial, the sufficiency of the lender's interest was bolstered by the fact the lender had acquired the property through foreclosure before the appeal was filed. (Id. at p. 175, fn. 1.) Thus, the court did not consider whether the borrower could have pursued the inverse condemnation suit before the foreclosure, and the court's holding the lender had a sufficient interest to pursue the suit does not imply the borrower had no right to pursue litigation.