Niko’s Gourmet Inc. rented commercial space from Pacific Security Financial Inc. The owners of Niko’s Gourmet Inc. personally guaranteed the lease obligations.
Pacific Security Financial Inc. sold the building to Peyton Building, LLC. Pacific Security Financial Inc. and Peyton Building, LLC. did not, however, execute an assignment of the lease.
Niko’s fell behind on rent. Peyton sued Niko’s Gourmet Inc. and – per the guarantee – the owners in their individual capacity. The trial court granted summary judgment totaling $104,558.08 plus costs against both Niko’s and the individual owners. Niko’s and the owners appealed.
One of the issues on appeal was whether – in the absence of an assignment of the lease – the personal guarantee runs with the land. The Court of Appeals ruled that it did not, and reversed as to the judgment entered against the owners of Niko’s. 1
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1 Peyton Building, LLC v. Niko’s Gourmet, Inc., ____ Wn.App ____ (No. 30840-5-III April 24, 2014).
