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CONFIDENTIAL

Dec. 21, 2004

Real Property
Negligent Misrepresentation
Lease Agreement

Confidential

Settlement –  $60,000

Judge

Michael B. Orfield

Court

San Diego Superior


Attorneys

Plaintiff

Richard R. Leuthold


Defendant

Gregory D. Stephan

Jeffrey N. Garland

Neal P. Panish


Experts

Plaintiff

Patrick F. Kennedy
(technical)

Lee R. Hess
(technical)

Defendant

Robert S. Griswold CPM
(technical)

Paul Zimmer
(technical)

Brian Mulvaney
(technical)

Facts

In September 2001, the plaintiffs entered into a written lease agreement regarding 12,000 square feet at the Palomar Oaks Technical Center in Carlsbad. The lease agreement was triple net for five years with an option to extend for an additional five years. Prior to entering into the lease, the plaintiff contended that its real estate agent, Stephanie Schaefer, represented triple net charges at 0.10 cents to 0.15 cents per square foot. Subsequent to taking occupancy, the plaintiff was informed by the lessor that triple net charges were 0.33 cents per square foot. Prior to the scheduled trial date, the triple net charges had increased to 0.43 cents per square foot.

Settlement Discussions

After various but undisclosed discussions, the case settled at $60,000 and the future triple nets were capped at 0.39 cents per square foot.


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