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Case Results: Real Estate Law

Below is a list of some of the cases the firm has handled, not a complete list, and is not a guaranty of future results.

Bentley-Wing Property W, LLC v. West Development Inc. & West Partners, LLC
$6 Million Defense Judgment
Klein & Wilson defended a company and its wealthy owner in an action involving a real estate syndicate in San Diego County.

The plaintiff claimed Klein & Wilson‘s clients breached various contractual obligations and fiduciary duties, effectively making the plaintiff’s partnership interest worthless. Plaintiff hoped to take advantage of the “wealth card” to convince the trier of fact he was cheated out of millions of dollars promised to him for years of hard work. Klein & Wilson presented evidence showing the plaintiff was a double dealer who preyed on several former partners. Klein & Wilson proved plaintiff was a sophisticated real estate professional who enticed Klein & Wilson‘s client into investing with him.

The firm showed that if anyone breached a fiduciary duty on the contractual provision, it was plaintiff himself. After almost three weeks of testimony, Klein & Wilson moved for judgment at the close of plaintiff’s case and won, without having to put on any evidence. The court dismissed plaintiff’s $6 million claim and entered judgment in favor of Klein & Wilson‘s client.

Does v. Roes
Arbitration Win

Our clients were limited partners in a real estate partnership. Defendant was the majority owner and general partner. The partnership owned an office building in Rancho Santa Margarita. Defendant caused the partnership to take out $3.2 million of loans secured against the property. Defendant lent that money to his separate company and refused to repay the loan, leaving the partnership with over $3 million in losses. The limited partners sued for breach of fiduciary duty and breach of the partnership agreement. Defendant counterclaimed seeking to recover property and asset management fees exceeding $1 million.

The arbitrator awarded our clients $626,529.71 in pre-hearing relief. After a two-day evidentiary hearing, the arbitrator awarded our clients an additional $2,586,290.80 in damages plus $185,787.01 in costs and attorneys’ fees for a total recovery of $3,398,607.52.

Golf Course v. City
$2.2 Million plus water rights
Klein & Wilson represented a prominent golf club in a dispute with the city and state water agency over water rights. Klein & Wilson proved to the trial court that the golf club’s water rights were superior to those of the city and the state agency. After the trial court’s ruling in Klein & Wilson‘s favor, the defendants agreed to pay the golf course $2.2 million and signed an agreement securing the golf club’s water rights for many years.

Vera Townhomes Homeowners’ Association v. Vera Townhomes
$1.5 Million
Klein & Wilson represented a homeowners’ association in a construction defect case. The developers and contractors denied there were construction defects and refused to pay anything. After conducting a “show-and-tell” presentation of the defects and inviting all the defendants to destructive testing, the defendants recognized they would be found liable and paid Klein & Wilson‘s client approximately $1.5 million .

Does v. Roe Corporation
Klein & Wilson represented tenants who subleased their space to a corporation. Former counsel structured the deal in such a way that Klein & Wilson‘s clients made no money on the sublease, but remained liable to the landlord should the subtenant fail to make lease payments. Klein & Wilson filed an action against the subtenant, seeking a declaration of how to interpret the lease. At the same time, Klein & Wilson indicated there was a possibility its clients would evict the subtenants, under a provision which gave the clients a unilateral right to re-occupy the property. The case settled when the subtenant agreed to pay Klein & Wilson‘s clients $645,000 in exchange for their waiver of their right to re-occupy the property. Accordingly, Klein & Wilson turned an unprofitable transaction into a windfall.

Brutocao v. The Hunt Club Community Association
Klein & Wilson‘s client was forced to sue his homeowners’ association, which refused to allow him to build on plans it had previously approved. Klein & Wilson attempted to settle the case early through mediation, but the homeowners’ association stubbornly refused to budge an inch. At trial, the court found in favor of Klein & Wilson‘s client and awarded not only substantial damages, but also the majority of the client’s legal fees, finding that the quality of representation had been superior.

Sullivan v. Lone Eagle Enterprises, LLC
Klein & Wilson represented a client in a complex real estate partnership dispute. Within a few weeks of being retained and after taking a single deposition, Klein & Wilson recovered a $500,000 settlement for its client.

Business Center Drive Partners v. BioGentec Corporation
BioGentec was a landlord’s worst nightmare. The company was habitually late on rent and repeatedly made commitments it did not keep. The landlord, Klein & Wilson‘s client, refused to renew the lease and, at that point, the landlord’s nightmare got worse. BioGentec held over and took advantage of every procedural opportunity to delay eviction. As a result of Klein & Wilson‘s aggressive litigation tactics, Klein & Wilson successfully evicted BioGentec and then won a substantial monetary judgment against BioGentec for back rent and attorneys’ fees. Klein & Wilson convinced the court to find the principal of BioGentec in contempt of court for failing to turn over assets. Klein & Wilson recovered almost all of the outstanding judgment when the judge threatened to throw the principal in jail.

Doe Corporation v. Roe Corporation

Klein & Wilson filed an action on behalf of its commercial property owner client against the tenant for rent and property damage. The tenant’s pre-trial offer was minuscule. At trial, Klein & Wilson proved the tenant was liable for damages totaling $330,971. Then, the court awarded Klein & Wilson’s client $132,871 in costs and attorneys’ fees, representing every penny Klein & Wilson requested.

Doe Corporation v. Roe

Klein & Wilson represented an owner of property in Big Bear Lake, California. The client’s neighbor illegally dumped hundreds of tons of dirt on property adjacent to the client’s valuable shopping center. The illegal dump altered the federally determined flood plain, putting a substantial portion of the shopping center into that flood plain. When it became obvious the city would not take action to abate this public nuisance, Klein & Wilson brought an action against the neighbor. On the eve of trial, the neighbor capitulated and signed a settlement agreement to abate the nuisance. Klein & Wilson then filed a motion to recover attorneys’ fees under the Private Attorney General Act because the client had benefited the community when the city refused to act. The court agreed with Klein & Wilson and awarded every penny of legal fees Klein & Wilson requested.

Unfortunately, the neighbor did not get any work done within the three-year period it was allowed under the settlement agreement. Klein & Wilson, therefore, had to file a lawsuit for breach of contract and seek an injunction compelling enforcement of the agreement. After winning summary judgment, the neighbor agreed to pay all Klein & Wilson’s attorneys’ fees and the neighbor’s successor in interest agreed to remove the dirt promptly.

Cohen-Nazar v. Friendly Adult Day Healthcare Center, Inc.
Klein & Wilson‘s client purchased commercial property and soon thereafter, a lis pendens was recorded against the property by claimants who alleged they had an interest in it based on a dispute they had with the previous owner. Klein & Wilson filed a complaint-in-intervention and then won a motion to expunge the lis pendens, clearing title to the property.

Doe v. Roe
(Defense Verdict)
Klein & Wilson represented the “money partner” in a $25 million real estate development project. The promoter promised to entitle the property within two years. He failed to do so and was removed as the managing partner. Klein & Wilson’s client then did everything possible to entitle the property, but also was unsuccessful. Inexplicably, the promoter sued Klein & Wilson’s client seeking damages. Klein & Wilson prevailed at trial on all issues, but the court of appeal reversed as to one narrow issue for a retrial. Through discovery and early law and motion, Klein & Wilson was able to gut the case to the point where the promoter voluntarily dismissed his lawsuit for a waiver of costs after claiming millions of dollars in damages.

Greenfield Monterey Park, LLC v. The Ezralow Company, LLC
Greenfield Monterey Park, LLC v. The City of Monterey Park
Klein & Wilson represented several defendants in related State Court cases involving the proposed development of one of the largest Environmental Protection Agency (“EPA”) Superfund sites in the United States. Plaintiffs sought tens of millions of dollars in damages from Klein & Wilson‘s clients and various public entities. The parties and the EPA Superfund site were subject to a convoluted Federal consent decree; accordingly, Klein & Wilson successfully stayed the State Court cases, requiring plaintiffs to seek redress from the EPA. After the parties completed the Federal dispute resolution process, the State Court cases resumed, and Klein & Wilson settled the claims against its clients for only $700,000, with $275,000 of that amount being paid by the clients’ insurers. Klein & Wilson obtained orders finding the settlement to be in good faith, prompting other parties to file writs to challenge the trial court’s orders. Klein & Wilson responded with motions for summary judgment against the challenging parties. The parties withdrew their writs, finally ending these cases after more than five years of litigation.

JAG Industries v. Brutoco Development
(Defense Verdict)
Mr. Klein represented a land developer accused of breaching an option to buy property. Mr. Klein moved for a defense verdict at the conclusion of plaintiff’s presentation of evidence. The court granted the motion, resulting in a judgment for Klein & Wilson‘s client.

Plaza Freeway Limited Partnership v. First Mountain Bank
(Plaintiff Verdict)
Klein & Wilson represented a shopping center attempting to evict a bank tenant, based upon expiration of the bank’s lease. Both sides agreed the lease had not yet expired, but the bank executed an estoppel certificate indicating an erroneous lease expiration date. The question presented at trial was whether the bank was bound by its estoppel certificate or whether the actual lease expiration date controlled. The trial court concluded the bank was not bound by the estoppel certificate. Klein & Wilson appealed, and the appellate court reversed, finding the estoppel certificate enforceable. The appellate court ordered the trial court to enter judgment in favor of Klein & Wilson‘s client. The case was a published decision and was one of the ten most important appellate decisions involving real estate.

Siegel v. Dyer
Plaintiff sued Klein & Wilson‘s client, alleging she failed to disclose fungus when she sold her property to plaintiff. The case was troubling because the parties signed an agreement in which the client specifically disclosed the fungus, plaintiff agreed to take responsibility for it, and plaintiff received a credit for the condition. Due to this fact, Klein & Wilson filed a cross-complaint alleging plaintiff was breaching the contract. On the eve of the hearing on a motion for summary judgment Klein & Wilson filed, plaintiff agreed to pay Klein & Wilson‘s client $60,000 for having to defend a frivolous lawsuit.

State of California v. Diess, et al. (El Morro Village Mobile Home Park)
Klein & Wilson represented most of the residents of the El Morro Village Mobile Home Park in their effort to avoid eviction by the State of California. The matter was an extremely high profile case involving some of the leading citizens of Orange County, the California legislature, and the Governor of California. The residents of El Morro Village lived at the mobile home park for many years, and the site had been a mobile home park for approximately 75 years. The State of California and very powerful forces within the State wanted the mobile home park closed and took every step possible to force the residents to leave. Klein & Wilson sought to delay eviction as long as possible to allow the residents’ lobbyist to seek a lease extension. Klein & Wilson was successful at avoiding immediate eviction of the residents. When the legislative option failed, Klein & Wilson was able to negotiate a deal with the State allowing hundreds of residents to remain for 14 months and leave their mobile homes in place without paying for the costs of removal. Klein & Wilson understands it ultimately cost the State millions of dollars in lost revenue and removal costs to return the site to its original condition. While Klein & Wilson was unable to stop the inevitable eviction, Klein & Wilson received a standing ovation from residents who came to hear a losing motion for a preliminary injunction against the State. Klein & Wilson received thank you notes from many of the residents, who are cherished to this day.