GECCMC 2005-C1 Plummer Street v. JP Morgan Chase Bank

A landlord is not an intended third-party beneficiary to a Purchase & Assumption Agreement (P&A), which otherwise, would allow them to sue for breach of contract on an agreement between the Federal Deposit Insurance Corporations (FDIC) and a new mortgage purchaser.

After Washington Mutual Bank (WaMu) failed in 2008, their assets and obligations passed to the FDIC. Under an P&A those obligations were purchased by JP Morgan Chase Bank (Chase).Originally WaMu was a tenant under a leas of two properties, Plummer and Oakdale in Los Angeles. Through a nonjudicial foreclosure sale, GECCMC (GE) became the landlord of those leases. Upon assuming these obligations Chase notified GE's predessor in interest that it would not be assuming the Plummer and Oakdale leases. GE filed an administrative claim with FDIC for the repudiation of its leases. The FDIC within its statutory power to manage a failed banks assets, denied those claims. GE brought suite in the California District Court for enforcement of its lease agreements. The Disrict Court dismissed GE's claims as they were not a party nor intended third party beneficiary to the P&A agreement between the FDIC and Chase. On appeal the Ninth Circuit affirmed the decision. The landlord is neither a party nor intended third party beneficiary of the P&A contract and has no standing to sue for breach.