Second District, Division 6 So Holds In Suit Against Mortgage Lender.
The Second District, Division 6, in Smith v. Home Loan Funding, Inc., Case No. B219372 (2d Dist., Div. 6 Feb. 24, 2011) (certified for publication), has held that a breach of the implied covenant of good faith and fair dealing claim is contract-based, upholding the basis for a fee award against a losing mortgage lender to the tune of $26,342.50. Civil Code section 1717 so allowed and there was case authority supporting use of the implied covenant theory as a fee predicate where the implied covenant was in an agreement that was part and parcel of the parties’ overall bargain. (Sawyer v. Bank of America, 83 Cal.App.3d 135, 140 (1978).)