Facts

In 2007, plaintiff J.D. Packaging, Inc. entered into a lease for a large commercial building. The lease generally described the premises as 22,000 square feet of industrial space. In 2014, defendant TREF3 Anaheim LLC, which is a single asset entity of Turner Real Estate Investments, acquired the lessor's interest in the premises from the other named defendants. Upon its purchase, Turner performed an ALTA survey, and the premises was measured at approximately 19,500 square feet, or roughly 12 percent less than described in the lease.

PLAINTIFF'S CONTENTIONS:
Plaintiff claimed Turner and others committed fraud and concealment in misrepresenting and concealing the actual square footage of the building. Plaintiff also claimed Turner had breached its contract.

DEFENDANT'S CONTENTIONS:
Turner claimed it did not commit fraud or concealment, as it had no involvement with the property in 2007 when plaintiff leased the premises from Turner's predecessors in interest. Defense contended that the lease provided that the rent was based on a reasonable square footage approximation and would not be adjusted if the parties later discovered the actual square footage was different than that described in the lease.

Settlement Discussions

After filing the complaint, plaintiff refused Turner's walk-away settlement proposal. Plaintiff also rejected subsequent offers that it pay $50,000 and $100,000 to Turner to reimburse it for attorney fees incurred in defending the action.

Result

Judgment in favor of defendants TREF3 Anaheim and Turner Real Estate Investments for $7,530 in costs and $105,555 in attorney fees.

Other Information

According to defense, Joseph DiBenedetto testified that J.D. Packaging had never once conducted any square footage survey of the premises in seven years, that he understood the rent under the lease would not change even if the actual square footage differed, and that he concealed his own intentions to challenge the lease if it turned out the square footage was less, but not if it were more. After defeating all of J.D. Packaging's fraud claims via four separate demurrers, this testimony was relied on in Turner's attorney fee motion to demonstrate the reasonableness of the sought fees based on the skill employed and success obtained. According to plaintiff, there was never any determination by the trial court regarding Joseph DiBenedetto's deposition testimony. Turner's demurrers to plaintiff's tort claims were sustained without leave to amend. Plaintiff settled the case with the other defendants and thereafter voluntarily dismissed its remaining breach of contract claims against Turner. FILING DATE: Aug. 17, 2015.