Facts

Makaden Inc. sued D.R. Horton Los Angeles Holding Company Inc. in relation to a contract dispute.

PLAINTIFF'S CONTENTIONS: D.R. Horton, the purchaser/developer of raw land in Temecula, agreed to a profit participation to be paid to plaintiff Makaden Inc. The revenues that were generated from the sale, less the cost of developing 59 lots, was to be divided equally between D.R. Horton and Makaden Inc. after D.R. Horton first took 22 percent off the top as their profit.

Plaintiff contended that D.R. Horton did not permit Makaden Inc. to inspect D.R. Horton's books and records as was required under the agreement. Plaintiff claimed that D.R. Horton made several misrepresentations and defrauded Makaden Inc. and that D.R. Horton did not accurately calculate their costs such that the proposed payment of Makaden Inc.'s share of the profits made by D.R. Horton to Makaden Inc. in the approximate of $44,000 was deficient by well over $1 million.

DEFENDANT'S CONTENTIONS: D.R. Horton executed a contract with the landowner and seller, Cox & Friends, to purchase 20 acres of undeveloped land. As part of the purchase price, the seller was entitled to a percentage of profits if the gross profit margin exceeded 22 percent Cox & Friends assigned a portion of the contract to Makaden. After Makaden paid what was owned under the contract, Makaden filed a verified complaint claiming that Horton owed $4.5 million dollars.

Defendant contended that D.R. Horton accurately calculated Makaden's share of the profits and that Makaden was not entitled to any more money.

The trial was bifurcated, with the first phase addressing contract interpretation issues. According to defense, prior to trial, plaintiff demanded $4 million. The court found in favor of D.R. Horton on all claims in phase 1. Plaintiff then dropped its demand to $1.5 million. In phase 2 of trial, after the close of evidence, the court granted Horton's nonsuit on all tort claims, dismissed the fraud causes of action, and dismissed the punitive damages. The contract causes of action went to the jury.

Result

The jury found in favor of Makaden Inc. and awarded it $850,000 against defendant D. R. Horton for breach of contract and breach of the covenant of good faith and fair dealing.

Other Information

Motions for judgment notwithstanding the verdict and new trial are pending.

Deliberation

three days

Poll

9-3

Length

3.5 weeks