Confidential
Settlement – $100,000Court
Santa Clara Superior
Attorneys
Plaintiff
Defendant
Christian B. Nielsen
(Office of the San Jose City Attorney)
Facts
In 1992, a golf course company (golf company) operated a municipal golf course constructed over a closed landfill (garbage dump) on the shores of San Francisco Bay. The defendant city retained plaintiff/cross-defendant law firm to handle a dispute with the golf company in which the city sought to recover back rent and other monies owed by the golf company. In the same action, the golf company sought damages against the city for, among other things, negligent construction and inadequate maintenance and repair of the landfill. The underlying case went to trial in February 1994 before bankruptcy Judge James Grube and resulted in a net judgment against the city of over $2.9 million. The judge ruled that the golf company owned the city $1.2 million in unpaid rent, water bills, loan payments and other charges. However, he also found that the city was responsible for the poor condition of the course and this affected the golf company's ability to generate revenue. He awarded the golf company approximately $4.1 million in lost profits from 1986 to 1993 and left open the possibility of subsequent suits for later damages. After Judge Grube issued his decision, the golf company immediately filed suit for an additional $2 million in lost profits allegedly suffered in 1994. Meanwhile, the city brought an unsuccessful motion for new trial. The city and the golf company ultimately reached a $5 million settlement which resolved all pending disputes and allowed the city to purchase the golf company's interest in the remaining years of the lease. The plaintiff law firm generated over $700,000 in legal fees and costs during the 1+ years of ligitation of which the city refused to pay approximately $365,000. The plaintiff brought this action against defendant based on a breach of contract theory of recovery. The defendant filed a cross-complaint for legal malpractice.
Settlement Discussions
Settlement discussions were not disclosed.
Damages
The plaintiff claimed $365,000 in damages. According to plaintiff, defendant/cross-complainant claimed damages in excess of $5,000,000.
Other Information
The settlement was reached approximately two years after the case was filed. A settlement conference was held in August 1997, before Walter Capaccioli of JAMS/Endispute, resulting in the reported settlement. Per plaintiff, the amount paid to defendant was provided by the law firm's insurance carrier.
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