Facts

Plaintiff Meritage Homes of California Inc.’s plan to construct residential homes on two units of property located in the Peppertree Park development in Fallbrook. In September 2013, Meritage purchased units 7 and 8 of the Peppertree Park development from defendant Peppertree Village - VII LLC. Peppertree Park Villages 9 & 10 LLC, an affiliate of Peppertree Village - VII LLC, retained ownership of adjacent units 9 and 10 in the development.

Both LLCs were managed, and in part owned, by defendants Northern Capital Inc. and Peppertree Land Co.

PLAINTIFF'S CONTENTIONS: Units 7-10 are collectively subject to Conditions of Approval issued by the County of San Diego, such that the owners of the units must comply with the Conditions of Approval prior to commencing development on the units. Meritage contended that defendants refused to comply with the Conditions of Approval, precluding Meritage’s efforts to develop units 7 and 8, because defendant believed that Meritage’s grading plan for unit 7 would adversely affect the development. Meritage claimed that defendants’ efforts to preclude Meritage from proceeding with development were improper and unlawful. On that basis, plaintiff asserted claims for breach of contract, breach of the implied covenant of good faith and fair dealing, intentional interference with contract, promissory estoppel, fraud, and failure of consideration. Meritage still has been unable to move forward with the development of its property.

Plaintiff contended that defendants breached a land sale/development contract by unreasonably, and unlawfully, refusing to comply with mandatory conditions of approval that would have allowed Meritage to begin development on its property. Plaintiff also contended that certain of the defendants unreasonably interfered with plaintiff’s contract with the seller and breached the implied covenant of good faith and fair dealing.

DEFENDANT'S CONTENTIONS: Defendants disputed all allegations and asserted a cross complaint for, among other things, indemnity and declaratory relief.

Damages

According to plaintiff, Meritage asserted damages based on its development costs, property taxes, costs associated with re-entitlement of the property, and damage to value of the property due to delay in development. According to defense, Meritage sought rescission and asserted damages in excess of 9 million dollars based on its development costs, property taxes, and costs associated with re-entitlement of the property.

Result

The court awarded Meritage damages of $4,610,911.40. Including prejudgment interest plaintiff's total award amounted to $6,139,077.90, with a right to recover prevailing party attorney fees and costs, against defendants Peppertree Village - Vll LLC, Peppertree Park Villages 9 A 10 LLC, Northern Capital, Peppertree Land Co., and Duane Urquhart, jointly and severally. Defendants’ were awarded nothing on his cross complaint.

Other Information

According to defense, no rescission was granted by the court.

Length

9 days