Facts

In February 2000, plaintiff Tammy Pui Sun Ho entered into an oral agreement with defendant Melvin Lee. The defendant agreed to act as plaintiff's agent and permit processor and obtain the necessary city permits to convert plaintiff's building in San Francisco from light manufacturing use to office use. Plaintiff agreed to pay defendant a reasonable professional fee for his services totaling $100,000. On May 15, 2000, defendant submitted a building permit application to the city's Department of Building Inspections on plaintiff's behalf. The application was approved by the city planner by mistake. In April 2003, the city discovered that the office conversion was never routed to the city's Planning Department and that over $850,000 in fees had not been paid.

One month later, the Department of Building Inspection also realized that the May 15 conversion approval had been a mistake and suspended all building permits on the conversion project. By this time though the conversion project was almost complete. According to defense counsel, the Building Department clerk approved the application and determined the application did not have to be routed to planning. The plaintiff ended up reducing the size.

PLAINTIFF'S CONTENTIONS:
The plaintiff sued defendant Lee for breach of fiduciary duty, fraud by intentional misrepresentation, fraudulent concealment, negligent misrepresentation, negligence, constructive trust, conversion and breach of contract. The plaintiff claimed that defendant failed in his duties as her permit specialist. She claimed that defendant engaged in fraudulent activity in asking for payment from her. Plaintiff claimed that she paid money to defendant which was supposed to be for taxes and fees assessed by the City and not for professional services.

DEFENDANT'S CONTENTIONS:
Defendant contended defendant did not rely on the City Planning Department. He relied on the City Building Department which is the Department that determines where these applications are to be routed. Since the Building Department did not route it to Planning Department, defendant assumed it was proper.

Defendant also contended that the fact that plaintiff appealed the decision to suspend the permit and sought to have it reinstated indicated that she also believed the error was with the City and not defendant.

Defendant further claimed that the fees plaintiff paid were for professional services and that defendant never told her that the fee was unreasonable.

Settlement Discussions

Plaintiff initially demanded $1 million and then later more than $340,000. There were no offers by defendant.

Damages

The plaintiff sought damages of $94,000 for overpayments to defendant; $30,000 in interest payments on a Market Street loan during a delay period; $30,000 in interest payments on a construction loan during a delay period; $1,875 in scaffolding expenses; $8,550 in civil engineering fees for changing the project to less than 25,000 square feet; $2,710 in fees paid to T.P. Lam Architecture and $37,000 in permit processing fees to get the project back on track. The amended complaint prayed for damages in excess of $1 million.

Injuries

The plaintiff elected to reduce her conversion to less than 25,000 square feet and spent a substantial amount of money to get this done.

Result

The jury found for Ho on the breach of fiduciary duty and professional negligence claims and awarded him $55,000. The jury found in favor of defendant Lee on plaintiff's claims for fraud, intentional misrepresentation, fraud concealment, negligent misrepresentation and breach of contract and declined to award punitive damages.

Deliberation

one day

Length

six days