Facts

This action arises out of an alleged attempt to convert an apartment building into condominiums.

PLAINTIFF'S CONTENTIONS:
Plaintiffs contended that defendants engaged in an unlawful business plan to "pre-sell shabby apartments as condominiums without previously obtaining or complying with all applicable laws, statutes or ordinances." Plaintiffs alleged that defendant George Yao, his companies, and agents, took an old apartment building and attempted to convert it into condominiums. They further alleged that Yao and defendant 4528 Colbath LLC implemented an unlawful scheme to pressure tenants to "buy now or get out in 30 days," and pressured the mostly elderly and disabled foreign tenants at the property to buy or leave. Plaintiffs contended that, on July 27, 2007, Yao's newly appointed resident manager and real estate agent organized a tenant meeting to tell all the tenants that they had to buy their units or get out in less than 30 days. Plaintiffs further alleged that tenants that resisted and stayed fell prey to mistreatment, which included reduction in services (such as inadequate garbage pick up, rodents and insects, and limited or lack of repairs). Plaintiffs claim that defendants' tactics even included filing and serving an unfounded unlawful detainer action against Ms. Simino-Kamjoo (a blind woman), just before Christmas Eve, which was shortly after dismissed. Plaintiffs are current and former tenants of the subject property from six units. At least eight of the 15 plaintiffs suffer from some form of severe disability or extreme age, as well as most are foreign born.

Plaintiffs contended that Yao relied upon his own understanding of the laws and practices as he personally saw they might apply and did not rely on any real estate expert or attorneys in formulating his decisions. They further contended that Yao believed that he was 100 percent correct about all his opinions and did not provide for any margin of error in undertaking his plan to convert the subject property to condominiums.

DEFENDANT'S CONTENTIONS:
Defendants contended that Yao did not convert the property at 5135 Zelzah Avenue into condominiums and that his actions did not constitute a "condominium conversion" as alleged. Defendants asserted that the preceding property owner obtained a final tract map in 1983 for 22 units and that the City of Los Angeles had approved an increase in the maximum allowed number of units to 23 in June 2004, which applied retroactively to cure any present day defect in the public report or necessary approvals. Yao argued that the recordation of the 1983 tract map was binding, exempted all modern day notice requirements to tenants, and complied with applicable statutes/ordinances.

Defendants also contended that the property was in excellent condition which was supported by the plaintiffs continued occupation of the units in the building and fight to stay and continue to live there. Defendants had upgraded the building, painted the exterior, tiled the hallway floors, upgraded all common area lighting and upgraded the elevator upon purchase. Defendants also upgraded the individual units by changing out carpet to wood floors and tile, upgrading the countertops and painting the units occupied by all Plaintiffs who remained immediately after his purchase of the building.

Yao contended that he relied on many experts in his business dealings including highly respected title companies, in this case Stewart Title, real estate agents, attorneys, highly respected brokers such as Marcus & Millichap in this case, and Vigen Onany a well known accountant in budgeting for HOA funding.

Settlement Discussions

Plaintiff's final demand for settlement was policy limit through trial, which was reduced to $975,000 prior to final judgment being entered and fees being awarded to plaintiffs. On March 10, 2009, defendants served CCP 998 offers in the total amount of $57,000. On April 17, 2009, plaintiffs demanded a total of $1.4 million to settle the case plus a moratorium on eviction for all tenants and all attorneys' fees and costs incurred to date. On October 30, 2009, at mediation, plaintiffs' demand was $3.2 million. Defendants offered $100,000, plus attorneys' fees to be determined by the court. Plaintiffs then dropped their demand to policy limits, which was again made on November 9, 2009. Defendants countered with a second offer of $195,000, plus a waiver of costs.

Damages

According to defense counsel, plaintiffs sought to recover $1,394,880 in compensatory damages and punitive damages.

Result

The jury found that Yao and 4528 Colbath LLC were liable for negligence (as to all plaintiffs) and for wrongful eviction (as to 10 plaintiffs). The jury awarded general and special damages and the court (in the second phase of the trial) awarded civil penalty damages, under the Unlawful Business Practices Act (Business & Professions Code Sec. 17200), and restitution, in the total amount of $204,570. Punitive damages were not awarded. Plaintiffs were awarded the following damages: $39,170 to Grace Ahn; $36,000 to Susan Ahn; $17,000 to Zareh Baghossian; $9,000 to Estate of Eli Farkas; $10,000 to Marian Farkas; $10,000 to Pourdakit (Helen) Bibiyan; $12,000 to Khalil Sayani; $7,000 to Flora Shadan-Sayani; $6,500 to Natasha Sayan; $11,700 to Faraydoon Kamjoo; $12,200 to Sima Simino; $6,500 to Sami Kamjoo; $10,500 to Aghahan Taban; and, $10,500 to Maryam Taban. After trial, on Jan. 6, 2010, the trial court issued a permanent injunction requiring Yao and 4528 Colbath LLC to comply with Business & Professions Code sec. 11018.2 and Civil Code sec. 1940.2 . The trial court also granted plaintiffs' counsel's motion for fees and costs in the total amount of $865,821 on March 26, 2010. The court found sufficient basis to grant the motion and enhance the fees by a multiplier factor of 1.25.

Other Information

Plaintiffs filed a motion for a new trial asking for an additur on additional statutory penalty damages and statutory rights. Defendants' subsequent motions for a new trial, for judgment notwithstanding the verdict, and to be deemed the prevailing parties were denied. Plaintiffs' motion to strike defendants' cost memorandum was granted. Defendants have appealed the entire award including fees and costs. FILING DATE: Nov. 16, 2006.

Deliberation

five days

Length

22 days